tv Squawk Box Europe CNBC November 1, 2016 4:00am-5:01am EDT
a brands new trading month. can it do anything to arrest the decline we've seen in europe, equities down in six straight sessions. some of the oil majors shell and bp reporting early on. we're chasing that sector in particular and some data to digest out of china. better numbers coming through on the manufacturing sector expanding at a faster pace than expected in the month of october. the overall index is up .4 of a
percent here in europe as stocks start to open up for trade. let's delve into the sectors. we saw on wall street the hand over has been where the markets closed a little bit weaker on the dow over what we've had. but in term of the sectors it's about rotation. that's what's been happening in the underlying trade on trade. not buying index but rotating on sectors which is why this picture is so important. oil and gas right at the top. health care at the bottom. but all stocks are moving higher this morning. health care, the sector a tenth of a percent north. "travel and leisure" getting a bit of a bump up. there are some decent percentage increases this morning but banks .4, most stocks in the basket trading. retail .4 higher. pandora the pop of the basket on the back of its numbers.
stocks are racing ahead. three top performers, media stocks, bp and gas is .9 higher. china macro data has been positive for the overall sector .9 on its trade. let's look at individual indices. 20 points off the 7,000 handle so far for the ftse. oscillating above and below that level. this morning we start a little below 7,000. it was down fairly significantly yesterday. almost .9 of a percent so we're scooping up some of that territory today. energy shares which tracked the weaker crude price. financial stocks are busy yesterday. we did see a bit push higher. look through for that improvement, three quarters of
1%. the general market is trading higher by .6 out of the gate. if you look at the two day picture about a third of a percent yesterday. gains today early on eclipse the losses you saw yesterday. i want to talk you through the oil trade. we had the oil trade below 50 on brent and below 47 on wti. the exception has been bp which is falling on the back of its earnings. i want to take you to shell. 3.1% hire. the stock was called up about 2% to 3%. so it's matching up to the higher end of expectation. the oil giant post a forecast beating net income for third quarter. oil producer was able to boost output. weak oil prices remain a challenge. keep in mind performance we're showing is up 37%. so the extra 3% today adding to
those double digit gains. let's just do a compare and contrast. bp hitting the tape this morning and shares moving lower by 1.3%. bright numbers from the company has been the line as profit on weak oil prices but beat analysts expectations. it trimmed its 2016 spending by $1 billion as it grapples with weak crude price. the picture very similar from shell. it is over these months from august on wards where you're seeing a real gain in the share price. linked to the opec conversation about cutting production. >> they are not standing idly by. we have the conversation about opec and where the oil price goes and see oscillation of the pound. this is why they've had a decent month. as you see from the out performance of bp over the last
six months there's hopes that deepwater can be put behind it which it finally is. performance of bp has been extraordinary. 31% higher as the oil prices rallied, the pound has fallen. it's not been the same story for royal dutch shell which has been absorbing the huge financial ramifications of its massive deal, the shares down 1.16%. in terms what the brokers think. very similar. brokers of six strong buys. ten hold. no sellers. there's one strong certainly. by and large very positive on the story. so very similar story over at bp. few more holders. 15 holders, two sellers, eight buyers and three strong buyers. the performance in bp up from a low three handle up to 541 pence. what is the story now? as we mentioned, it's about
having lower cap x, defending the dividend, getting to free cash flow positive so they can cover the dividends with cash flow. the other point is about growing their production as well and shell had some good news on that as well. 5,000 barrels a day equivalent. a big figure. talking about growth going forward as well. bp upstream earnings were down $224 million. lots of projects going forward which will grow that production. so lots to play for. the dividend i suppose i should update you on what the current yield is on these two. shell 7.45% dividend yield and bp it is 6.13. we should bring in charles newsome on this. he's a divisional director there. it's ironic that boston these
companies are reporting a reduction in cap x running into 2017 and yet shell this morning is benefiting from that news play. or is it something else that's driving the share price higher? >> i think in shell's case there's been a loss of, a concern about the very high level of dividend pay outs and that they were not covered and people have been worrying about that for some time. i'm always deeply suspicious about companies paying uncovered dividends and effectively paying today and not investing for tomorrow which appears to what is going on here. you know, you need have oil exposure in portfolios, focus on the bigger ones in my opinion. there's not much between them. clearly shell has had some good numbers. bp has had a very good run. shell has too. probably, you know, you also
need to bear in mind what's gone on with sterling. >> given your point about the cover, suggest to me you wouldn't chase at these prices then? >> i think that's probably broadly speaking would be my conclusion once i have a close are look at the numbers today. >> you need the underlying capital growth because you have the 7.5 dividend. you trust the dividend will thereabout. the commitment has been from the company is forthright. >> but, steve, we invest for the long term. that's what we look at. long term quality businesses paying sustainable dividends. royal dutch isn't here. maybe less so bp. but over paying dividends is dangerous. >> bp is the one that has increased pitts 3-- its 32.4 billion.
>> clearly dividend is coming out of the debt. you know, shareholders pay tax on that. that's not good really. >> if you look at the share price performance through this year, across the energy stocks and even those in the services space, the market has clearly rerated. but on what basis? because at this stage the question as toe with whether any opec halt in production levels will stick at this point remains an open one. what do you think the market has decided as regards this rerating. why are these companies benefiting from that because i don't hear positivity from you? >> well they were deeply over sold with oil prices locking like they could fall but they didn't but they did fall a long way. once oil prices started recovering people came back and looked at, actually a decent
yield there. and i think it comes down to the fact, really, ultimately they were over sold. >> the broader question is one about the recovery for cyclicals that we've seen, retailers have done better. so, my question really is one about delivery coming into the early part of 2017. the earning season has been a bit damp is there a possibility we might start to see this rerating justified through higher profitability into 2017? >> conceivably, yes. in the figures they are talking about challenges of the oil price. and i think they really need oil above 50 and we're not there on a consistent basis to be profitable over the longer term and that's the important point. >> i know you were commenting on this, but if i may i would like
to bring in jason. the reason why i'm very keen to bring you in is because my guest charles is concerned about the longer term viability of the dividend, concerned about cash flow and cover over at shell. it's something you've mentioned in your previous note but it's something which you're willing to not ignore but be less concerned about. you're a buyer of shell, aren't you? i'm not sure jason can hear us. jason, good morning. you like shell. our guest in the studio is concerned about the cover for the dividend, concerned about the cash flow. you're less concerned? >> we're concerned about it. we're seeing some fairly dramatic improvement in cap generation as well. this morning it illustrates shell has more potential than what we saw at the beginning part of the year. the capital expenditures are coming down significantly. that provides a lot more
potential for cover on the dividend. >> very simple, though in many ways about the dividends. if we get to $55, $60 we can breathe a sigh of relief if we're holders of these companies. if we don't and we stay in the 40s we have a longer term problem. >> mid-40s is an issue. we think shell can cover their dividend assuming they maintain the script component down to $45 brent. we believe oil will move about 50 next year. but low 40s is problematic, no question. >> the majors say to me where gas and oil companies in many ways, they are very keen, these three gentlemen are keen to emphasize that their gas and oil companies. are we pricing off the wrong
measure in many ways but continuing to concentrate on the oil price rather than the gas price? >> it's a fair point. these companies are moving to a mix of roughly 50-50 between oil and natural gas. a large component of their natural gas sales is via the l and g market and l and g for the most part is pegged off of oil prices. so they do still maintain an oil price linkage in the majority of their revenue stream but certainly with gas providing clearly a greener alternative to oil and i think that's the reason why they want to emphasize that. >> on the sector, because clearly what we've seen in the last days the measures of a lot of new players in the oil market. do you expect consolidation to keep on happening because that's an easy way to keep the capacity in check.
>> yeah. it's a fair point. certainly the emergence of shell oil in the u.s. has been transformative. now we haven't seen too much consolidation amongst those names. that's something that could play out over at that longer period of time. but thus far we are still seeing that space not only very active in drilling but very active in the capital markets and raising their ability to continue drilling. >> jason, we're looking at a picture at bp stock trading. the takeaway message is more. you had a number on the underlying replacement cost basis that beat expectations. cap x has been trimmed. it will sell assets this year around $3 to $5 billion this year. why is the stock trading weaker? >> i think bp numbers is fine. shell's numbers look good.
you have a differential in performance. there could be shifting out of bp into shell on the back of the results. there's nothing in the bp numbers on an underlying basis that were concerning to me. >> cap x needs to come down very dramatically over the next few years to justify the kind of dividends that are being paid currently. what is your expectation where we might see cap x go? >> well, we think cap x is largely where it's going to be on a move forward basis. we're projecting we'll see a 5% decline in capital spending in 2017 relative to 2016. this follows a 42% reduction in capital spending. i would almost argue these companies are underspending if they want to replace their production because this is a declining asset base. the point is well taken the
dividend is not well covered without further cap x cuts. in mid-50 type price environment there's room for cap x expansion. >> bp today was detailing where it sees cap x what key projects have been side lined. what are we learning about the overall theme? >> i think the overall theme is that companies are trying to get more into short cycle spending, which is not only shell but near field development and been moving away from the multi-billion dollar longer cycle time construction projects. bp has been one of the leaders in trying to work down cost structures in deepwater and we'll see bp sanctioned the mad dog project in the deepwater project in gulf gulf. that area is being deferred. >> just a quick one on peck. one is hoping for too much in terms of specific details about
what individual members or non-opec members will do. are we hoping for too snch. >> the devil is in the details on these opec plans. our expectation is that there's going to be very little physical effect on the market from the part of opec. but that their central banker hats on and talking about trying to rebalance the market does have some important psychologically for the floor. the market is coming back into balance and that it moves into balance this quarter or in the first half of next year. so the need for specific cuts is not necessarily as acute as it would have been helpful a year ago. >> jason, thank you very much. great speaking with you. gentleman charles, dew point to chip in on peck as well? i read an interesting piece
the other day that was making the point that shell can be turned on and off quite quickly. so any agreement we've seen in opec may be neutralized fairly quickly by these shell producers. i'm skeptical about some of these discussions. okay. it puts a psychological floor on the market in some ways. >> absolutely. they've learned some very good lessons from what we saw a few months ago when oil prices were collapsing. >> i think they are going to -- i think it's a traditional approach. >> who makes the swing comment, though? because it's been interesting how we've heard and we remarked on this earlier in the program the russians and russia
corporates in this space do a lot of the running. >> it's funny. i was asked yesterday on "worldwide exchange," if you can get the iranians to talk the talk regardless of whether there's a production cut, that will keep verbal support for the markets. if the iranians talk the talk, it sounds good. but if the iranians have a verbal line which is different from the saudis then i think the oil price is in trouble. >> very difficult to say. i would say that if anything going to be the saudis. here we are, two different opinions. back to you. i want to take you through more stock moves. weir group is down 4%.
the guidance reduced after a continued weak conditions in the middle east and quote little improvement in the pricing environment. outlook for minerals and flow controllers is unchanged. $160 million cost reduction program remains on track. the stock is 62% higher. 4% may not touch if you bought in at the right. >> i'm. danish jewelry maker, pandora they rose 18%. stock sliding 1.7%. pandora raised its guidance for the year by 1%. they stepped up plans to open up more stores in 2017. you want more stores or online strategy would be useful for the company at this point. in the meantime, virgin money
redid their guidance. i think this is the term we use also grew up 33% to 3.5 billion pounds. the stock slightly stopped in the middle part of the session. after dozens of candidates a designated committee and two different recruitmen compat com pimco is welcoming its new ceo. he's the third man to take the helm since bill gross left in 2014. manny roman has had a remarkable career. many would say he's been incredible fortunate to make the career changes that he's made. has he met his match this time given that as we know pimco is a bond house and we're at the end of what 30 odd year bull run for
the bond market. >> there are many challenges facing pimco. one as you mentioned october is a very difficult month for bonds. that may continue. secondly we have the rise of passive and pimco is very much an active house. less pronounced on the fixed income side but actually coming more and more. if you look at this year, u.s. funds for instance u.s. active equities lost a lot of money, a lot coming on the passive equity side. on the fixed income side although there has been inflows net into passive, interactive fixed income they have been absolutely dwarfed by the inflows into passive income. you're seeing more momentum which will be a big challenge for pimco going forward. pimco has always relied having high faith which becomes very egregious when you have yields
so low. >> what do you think about this current spike in yields we have been seeing for the last three or four weeks? are we in the final innings for the bond market or as so many times happened in the past year actually things will settle down again as central banks show no desire to lift interest rates. >> the short answer is i don't know. i think it was clearly overdone the bond yields and we've seen a bounce back and people are saying is this bottom. many people calling the bottoms in bond yields for a while now. it's going to be sit back and watch. can i go back to the manny roman piece. i was a bit disappointed when he left mangrove because being a uk company i met manny many times. i was impressed by him. i felt he left with more work to do. maybe much bigger job at pimco. >> his departure and his
appointments at other companies based on the strategy i can basis of the company. is that what you're saying? >> that hasn't crossed my mind. >> man group had a clear strategy in place. ooh so he worked with him set to take the range. pimco had this big void which they needed to fill by a year long equipment process, special committee formed justifying in finding somebody. even if manny is out the door at man there's a continuing process from what he set out the implement. >> you came on the talk about one of the big mergers in the asset management space as well. i can't help this is part of the same part of the same story. they are trying to face down the
passive threat. can it to be done? is this an immovable structural change in the industry rather than something sillical? >> it depends on the product. you see that's why somebody like man group trying to expand into the longer term. that makes a lot more sense. >> do you pick a house that you like or where you trust the star name because everyone is building up businesses whether you're in emerging markets whether you're man group or pimco. is that why it works to have a star name attached to a business? >> star names are always very dangerous because if you're a long term investor, investing on 20 year basis will the star be there in five years time. i guess going back to the point that you are make about consolidation in the industry, the main problem is that we're
leaving where there's not many assets. an inactive fund is expensive. if you don't have that performance the normal switch will be towards passive and the other normal switch will be towards consolidation because the asset management team needs to be more competitive. >> charles how does it affect? >> in the terms of pimco we don't have much exposure to those funds. one two we like there. bonds, we have been suspicious of, have some exposure particularly with gilts for insurance purposes reduceed a while ago at those low yields and we'll review again in due course, i think. >> are you worried that there's an event in the bond market which will create an event in the equity market? >> sure. i mean inevitably something will
happen there. once you start moving the cost equity prices will have to move as well, i would believe. >> and yet as one of our guests pointed out last week even if you were to cut from 80 billion euros from the central bank to 60 billion a month still have holland or the netherlands being added every year to the financial markets. vast amount of money. very long process. >> sure. but, of course, you know, with the valuations we've seen in equity markets here it wouldn't take much for people to get, suddenly get concerned and to have a big correction. >> this is where i would disagree with you. the main problems we faced today when you look at companies, companies are not able to grow their revenues. the moment you get a major sell off in the bond market, central banks are going to -- the cost
>> tested a> shell shares jumpi profits big expectation but offer a smaller dividends and warns low oil prices offer a significant challenge. bp cutting its investment plan on $1 billion. profit warning shares weir shares lower. top trading conditions in the middle east and north africa. and we have headlines hitting. we'll bring you those straightaway.
a profit forecast in $458 million here. the bank already saying income and profit levels not yet acceptable. third quarter impairment charge, $596 million. the company giving us operating income of 3.5 billion. they say that continues the recent stable trend. comments here one equity ratio, 13% at the top end of the 12% to 13% range, clearly these days everybody in the financial services area is very keen to tell you just how robust they feel their balance sheet is. the company says the group remains on track to deliver in excess of a billion dollars in gross cost efficiencies by end
of 2016. again, that just reiterates the trend that we see in the financial services sector to continue to cut costs rather than focus on spending for growth. and long may continue one suspects. >> absolutely. one of the main points is when you look at profitability of banks, basically driven by two factors. one is your leverage, your financial leverage, which we all know is what central banks are saying. profit margin is second thing and third is provisions. provisions have been taken care of. but the margin it can only go, can only widen so much. and the main problem is that bank will keep on delivering. this is a big problem for any sustainable economic recovery. >> this looks like a big miss as far as the bank is concerned this morning, the analysts as i understand it were looking for
something around $601 million pre-tax. we have to keep an eye on this one and see where it goes. >> we've had a stunning rally. march 2013 they were -- they started their decline aggressively. their low was a huge decline there, down about 70% and now down 48%. last year actually coming off their 24th of february low. they were down 42% over one year basis at that point and now 5% for the year. >> let's talk you through some of the market action. stocks here are trading higher. bouncing about .4 of a percent. decent performance for the ftse. dax superabout half a percent. stocks here in terms of sector. you're seeing strength pretty much across the board.
couple of weak patches. health care in particular down about a tenth of a percent. moving on the norwegian crona is gaining strength over the euro. thanks in part to a pick up in oil prices. the bank kept rates at hold. despite concerns about rising house prices. we're proud to have the governor of the central bank of norway. just on the last interest rate decision here do you think you have now bottomed on rates because the rest of the world is incredibly sensitive to the concept of negative rates. we've seen other central banks be more aggressive. you have the advantage of a large wealth fund and a government-prepared to spend. are we done now at 0.5? >> i'm not going to answer that explicitly. i would like to go back to our
september report we have. every quarter we have full monetary policy report with forecasts including scenario for the interest rates, target rates. the most likely forward path and in september that's the message was that most likely the rate was going to be unchanged for the near future. now in october, which you referred to the meeting in october, we kept the rate unchanged. based on information that overall the picture looking forward was more or less as we saw it in september. so we follow the plan from the monetary report. >> here we are 1st of november, several days away from a u.s. election result. as we look at or as you look at, shall i say, issues that could cause some disturbance in the
force if you like around interest rate policy making, is the election issue in the united states, is there something else running into early part of next year, maybe the referendum in italy or the german or french elections that trouble you >> norway as you know a small economy. norway is an open economy based on trade. not only of export of oil and gas but generally speaking capitals are moving around. so as a central bank, of course, we're looking internationally. yes every event, major event which could happen, whether it's brexit or whatever, could affect at least marginally our interest rate setting. >> but are you planning for worst outcome if donald trump gets elected? i mean everybody models within
the central bank world so how are you models for the various election outcomes? >> that issue regarding the u.s. presidential election is not -- we follow it, of course, but we don't think in the way you indicate. we have to wait and see. it remains to be seen what will be the impacts on it colin kaepernickally of a given result of an election. we follow the u.s. economy of course. we have food reason to believe that will continue looking forward. >> you reference this open economy. shipping loans have had a big impact over the banking sector. let me ask you directly about credit quality. these loans have been deteriorating are you concerned
about the quality of loans across norway? >> quality of -- >> quality of loans by the banks? >> yeah. as a central bank we're the central bank of the banks. with special responsibilities for mortgage banks. we have responsibilities in that area given by the central bank law. we follow the situation in banks closely. norwegian banks are in a relatively good position. they have improved their capital ratios over the years. and generally in a good position to face the challenges that meet us including impacts of market in oil prices with significant impacts for the norwegian oil industry. yes, we're prepared to see some loss there's. the banks already has some loss could increase. but even in a scenario which is
closer to worst case scenario, in an overall perspective, analysis shows that they are in good shape all together. >> another question, to u.s. central bankers are in the best position to answer my question which is over the last 40 years we've seen monetary has been the primary view adopted by central banks. every time there's a crisis you put more money to the system. this has been working very well. at the moment it's almost like questions, whether this is as effective as it's been in the last 30 years and whether we're moving towards a different approach going forward. what's your opinion on that. >> that's a key question. it's a broad topic. i think on behalf of central bankers internationally i think central bankers realize that there are challenges around
interest rates are low. rates could be negative or have been negative in some areas. and still there are challenges in the international economy. but our analysis and also based on experience of other central banks which have moved into this territory show that there are mechanisms for monetary policy so far functioned well. i'm not going to be too pessimistic about the future here but, of course, given the position the banks are in now are not the same as in a more normal situation. >> does it mean it's time for fiscal policy, the governor can spend its way out of a down. is it time to hand it back to
the government. >> that's the general recommendation by the imf. norway is a special case as you indicate. we have sovereign bond fund and we have a poinl norw-- policy i norway that's expansive. we're in a better situation than other countries where monetary policy is the only player in town as they say. norway is different. >> i think you made your point very clear. norway in many ways is very similar tousi similar to uk. you follow your own route. but apart from the swf we're very similar. are the brits going about this the wrong way because there are a lot of people within the uk government that want a hard
brexit, a hard negotiation. what is your warning, what is your advice to the british who are looking at being hard on the brexit negotiations and foregoing access to the single market? >> is that up to the british to decide. i'm not going to give any advice on that. as a result of brerkt there are new challenges for britain. i'm sure politically but in the economic area, new trade agreements had to be established. there are question marks around that. but looking forward, i choose to be optimistic on behalf of the british economy, but there are a number of matters that has to be arranged.
>> let me come at this from a different point of view. do you feel political considerations will outweigh economic reality in terms of how the europeans, the other europeans, because we're still europeans, the british will have these negotiation. political necessity are keeping the rest of the eu together will out weigh economic considerations, do you fear that >> i'm sure that's a very relevant question. it's more a question of political science i think than -- >> you will pick up the pieces. >> we have to pick up the pieces or respond to whatever happens. in the economic scene. but there are so many issues here and it remains to be seen what will be the effects. i have to add when i took my summer holiday usually in july, that was just after the brexit. . we saw the monetary report and the result and i was aware that perhaps i would be called back
to office during my summer holiday. it didn't happen. there was some major turbulence in the out set but markets seemed to calmed down. so there are many challenges here. let's choose to be questions, one is obviously given the norwegian banks independence do you think it's unfortunate mark carney's role and the bank got into a row about independence after brexit? >> i'm not going to comment on that either, of course we follow what's happening. general answer is i think as central bankers we expect and we value the independence of central banks. in our case i think there are not many questions in the political scene around what's happening in the banks, so independence perspective. then i realize that in major
countries, in much bigger countries like the uk, the traditions are somewhat different. institutions will have to live with discussions here in the uk, that's my observations which are different than the ones we have with smaller countries. >> the decline of krone has fueled inflation in your context and it peak around 3.5% in july. or thereabouts. you can imagine looking at your inflation rate and thinking about how do we get to that. coming back to tuck example here, does the example of norway suggest that actually we could get inflation pressure in the uk much faster than anybody is expecting because of the weakness in the pound? >> well, as an isolated effect,
the effects will thereabout or weaker pound, of course. but then in relevant terms trade, exports and import and also imported inflation has a much larger weight in our case than tuck because the uk is a much larger economy. but going back to your questions on the norwegian inflation figures, inflation has come up. now it's slightly below. since cost inflation, seem to be at the moderate level when we look forward and that's what we do when we look at interest rates, inflation will come down so the effects of a weaker krone, the effects are temporary. so we're not worried. >> every central bank is taking
the view that inflation is such a temporary phenomenon than what's different than what happened in the late 1960s and then you find massive inflation. in keeping your interest rates below inflation there's intrinsically this danger. >> globally i think it's a challenge for central banks, there are trends globally bringing inflation rates down. not only speak about energy prices, we have competition from emerging economies. so there are trends bringing inflation down every where. then in a single country domestic inflation is to buy currency moments but that will even out if you take another group. so, yes, i think this is a challenge for central banks
is pulling a lot of strings in the economic recovery plan? >> reporter: i think you're right. at the end of the day the buck stops with the deputy minister. we're expecting at some points there would be a replacement. it's not unexpected. with the deputy conference not just being made minister of defense, it appears that he want as younger generation, a young generation of technocrats to come on board. while the policies were unquestioned during the 20 years of his ten new year, during this oil boom time people were questioning some things that happened over the last year particularly when it comes to receiveables, when we talk about saudi arabia. their top down society do exist off the back of the oil industry and in particular the private-sector has been feeling a pinch here because what you have is the fact that tons of
contracts whether large or small haven't been getting paid. at the end of the day this has had a knock on confidence particularly in the private-sector. a lot of expectations about how those receiveables, how quickly people will get paid and how we'll see this trickle down to folks on the ground. >> we'll leave it there. could be worst problems if they can raise 30 year money at 3.5% and ten year money at 3.2% things could be worse for the kingdom. excellent work. thank you for that. some reaction? >> i think you got the direction right on this one. the stock fell sharply this morning off the back of a third quarter underlying pretax profit of 458 million. that was an improvement on the 139 million loss a year ago. but some way off the 600 plus million that the analysts were looking for.
i think the sting in the tale here is the bank is suggesting there may be appreciate compliance and regulator challenges. they confirmed the financial regulation in hong kong is planning to take action against the bank in relation to its role as a joint sponsor of an initial public offering in 2009 but that's the best that can be offered. we have stronger balance sheet and clearly the tier one capital ratio number was okay but income and profit levels clearly struggling at this stage. >> second worst performer on the stock 600. what do you if you're a rival. you put out some good news. hsbc announced that the bank here, the retail of the business. the bank has been trying to but equality bumping up another
female appointment. seen as a diversity issue. >> usa. >> we look at each other. clara furse not everybody thinks did a great job at the london stock exchange. >> managed to let it slip out of her fingers. this is collar gentleman furse who got a big deal for the london stock exchange. i don't care about diversity on this whether it's a man or woman. the fact is about performance as well and the fact is did a terrific job. there are question marks about the effective longer term strategy. >> she takes over the retail
banking operation. we'll all watch with great interest, i think, to see how that fares. let's go back to you, i want to ask you to comment on that story particularly, but maybe just on the share price movement that we've had here. everybody knows the banks are in a difficult space at the moment but actually the euro stocks 600 banks has done quite well over the last three months. do you think we can put a line on that and say no still rubbish, don't buy them. >> it's difficult to say but could clearly see a situation where, you know, in europe, maybe the worst is over economically. there are question marks about italy but in spain we're seeing how the lack of government has very little impact on economic growth. maybe we could actually see that the worst is over. if that's the case no doubt the assets of european banks have changed.
so you're taking a view again like you did with the energy sector that you can buy and hold and the main challenge you have is also one that interest rates are not going down any more and there's questions about it. actually could it be positive. >> we got wrap it up. thanks so much for being our guest host. ppen all by itself. ppen all by itself. it needs to be earned every day. using wellness to keep away illness. and believing a single life can be made better by millions of others. as a health services and innovation company optum powers modern healthcare by connecting every part of it. so while the world keeps searching for healthier we're here to make healthier happen.
zbroorng. one week to go until election day and new details are emerging about another fbi investigation this time into trump's information campaign manager and his potential ties to russia. global market a lot. stocks start the month higher as investors await fed minutes and more corporate report. earnings alert. sony's profit plunges. it's tuesday, november 1st, 2016. "worldwide exchange" begins right now. ♪