welcome to "countdown." i am guy johnson. friday, a little bit of a disappointment. we saw the payroll number come through significantly lower than the market was anticipating. the credibility of the fed beginning to be called into question. it was an interesting question in terms of the equity market positioning. to backes the fed have off of a rate rise this year? story withe stock the s&p 500 up by 1.43%. the nasdaq was up 1.74%. you may be thinking this is farming today. there is a certain agricultural theme running through our big stories. you heard what is happening with glencore. glencore is on a roll this morning. if you're looking for a stock with volatility, this is it. it was up at one point over 40%.
bunch ofn for that, a companies that could potentially be interested in taking a stake in the agricultural unit. we will hear more from ryan in just a moment. storyo have the cayenne s . something of an agricultural theme running through that story. the glencore story is absolutely sensational. is happeningt what with the asia markets as they price and what is happening friday with the payroll. shery ahn is standing by with details. shery: a great start of the week for asian stocks today. all markets rising for a fourth consecutive session. the regional benchmark headed for its longest winning streak since last july.
data we so weak payroll and factory data fueling momentum. the u.s. rising all across the board, helping stocks here and in asia. gaining, thei highest level in two weeks. we are also seeing hong kong gaining 1.7%. mainland china still closed on golden week. we are seeing the hang seng getting 1.7%. you mentioned glencore, that is surging due to the rally in metals we have seen overnight .nd that is fueling the asx and we aren gaining, seeing sectors across australia rising across the board. maintained it's extended gains at about $45 a barrel. crest miningnew
gaining after that, and gold rallying 2%. losing a little momentum today but let's take you through asian currencies. has again toan the highest level in two weeks. may thought that the fed not be raising rates anytime soon. analysts saying it is only because they have ample reserves. strengthening 0.7%. we are seeing the kiwi dollar and the australian dollar gaining after that data. back to you. guy: shery ahn mentioning what is happening with the story surrounding glencore. the stock is on a tear this morning in hong kong. the surge comes amongst other things to -- amongst other
things. they're talking to potential buyers for taking a stake in the agricultural business. ryan chilcote is here. the stock is up 40% in hong kong. what is going on? ryan: trading volume is out of control. 7.5 times the daily average over the last 20 days. let's not forget that over the last 10 days, glencore has been a pretty actively traded stock. two things happening. interest in the agricultural glencore's part of debt restructuring program. from 30 billion to 20 billion. they wanted to sell a stake in the agricultural unit and to citibank is one of the sellers. they said friday they think they might get a decent price, not even limiting that it could be possible they sell the entire unit. since then we have learned,
singapore's wealth fund interested on friday. we learned that saudi arabia might also be interested. you have japanese trading houses and at least one canadian pension fund. it looks like there is robust interest in that agricultural trading unit. that means you get a higher price the more bidders you have. the second thing is there is a fundamental to this story. copper went up again today. it counts for about one third of glencore's earnings. guy: for this to work, copper needs to go up again. ryan: all of last week we saw copper, zinc and lead all rising. that is part of the glencore story in general. that is helpful to the company, and we will just see where this goes. it or, you take a look at glencore stock in general, even
up as much as it is today, it is still only recovering its losses over the last two weeks. it has been quite a roller coaster, and rough here in general. guy: there is the copper chart. i can show you on the terminal what is happening these of the the rally with glencore -- these vis the rally with glencore. we are not back there yet. it is a good recovery. ryan: it just tells you that people think the china's commodities demand disruption story is a little bit overdone. guy: interesting to see the world bank downgrading chinese growth. ryan will be back with more on the story. let's get more corporate news. let's go to caroline hyde. caroline: we are talking telecoms and an asset being disposed of by telling all --
telonal. they could be disposing of one third of their holdings in vimplecom. they have had a bit of a torrid ride and they say because of the erosion of the market value of vimplecom, they look to dispose of the minority position that they have. buy never had the option to the company whole. theretemple, assets -- vimpelcom assets have been challenging. a third of that is what they will be potential he earning by selling off these -- potentially selling off these chairs. billione received 20 norwegian krone in dividends. the current valuation and
ownership stake is it about that amount. we need to talk about this lack of transaction taking place with cayenne s. let's turn to politics now. the busy weekend for politics. the u.k.'s ruling conservative party gathered this weekend for the annual conference, seem to protest outside the convention center against austerity to strike rules in the u.k.. the subject of europe that looks once again to divide this party. anna edwards is in manchester. it is possible that brexit is once again coming back to dominate the conservative party, a subject that cannot get away. anna: it looks as if the tories,
if they wanted to come back and celebrate a victory in may, will be faced with divisions within the party surrounding the subject of europe. it is not on the official agenda, but there are more than 20 fringe events on the subject of europe this week. we have been promised a referendum by david cameron i the end of 2017. -- by the end of 2017. we don't have any details with the timing. top is semp a set launch its campaign this week to keep that story and people's mines. david cameron said he is really nothing out, suggesting that could he even lead a campaign to leave the european union? hard to know if that is really has stance or whether that is part of his renegotiation tactics with brussels and others. we have clues from philip hand who said he hammond
was confident that renegotiation should deliver. he used only 161 words to talk about the renegotiations with europe. public, 45% want to stay and 38% want to leave. we have seen polls that said the opposite of that. unlike rugby ambitions, it seems on the subject of europe it could all still be to play for. guy: we are not talking about rugby at all in this program. in fact, we are not talking about rugby ever again, adam. -- again, anna. this that isout not on the agenda but creating tension. anna: you might remember back in may, just before the election, david cameron gave an interview to the bbc where he let slip he would not want to be private us or for more than 10 years. that raised questions about who
would take over after him or we might hand over to. this newspaper over the weekend reporting that 18 members of the party could consider standing against david cameron when the time comes. the website for the tory faithful puts judge -- george osborne right out in front. conservative home put the business secretary in second place. he ruled himself out over the weekend. boris johnson is set to speak your tomorrow. he is seen as the heineken candidate. perhaps able to reach the electorate. he looks set to make another move. he could deliver a real coup for the conservative party. he looks likely to name lord adonis, and your adonis -- andrew adonis. it looks as if he will give up the labour whip, become a
cross-party peer and take on an infrastructure role. look for that announcement later. a really big figure under the new labour government. been such aways good thing going into these leadership races in the past. i will be here speaking to john lonwigwith a little bit later on. guy: looking forward to it. at the conservative party conference up in manchester a very big week. lots of central banks taking the limelight. watch out for the big part of the u.s. economy. we will be paying a lot of attention to that. tuesday we get the decision from the rba and australia.
interesting. where is the story, vis a vis china? wednesday, the bank of england thursday. a packed week in terms of central banks. we will bring you all of that live with plenty of analysis. countdown?ing up on strong words from volkswagen's incoming chairman. we will analyze what is next for this carmaker.
commodities trading giant is talking to potential bait -- buyers for a stake in the agricultural business. are various companies interested in buying a minority spake in the -- stake in the part of the business worth as much as $10.5 billion. after ae comes declining in global equity markets. bid had been rejected by k+s as too low. run materials are down 16% from its peak this time in may. remain shut along -- of the riviera with the
the joe thomas 20 meters of rain in cannes leaving many homes without lectures at a. -- without electricity. volkswagen's incoming chairman says the scandal could pose an existing threatening crisis for the company. i hear that the german translation makes it sound worse than that. ours talk to hans nichols, international correspondent. dismal words from the incoming chairman. hans: i imagine that they sound even worse in french. that is what he is getting at. an x essential crisis -- exis stential crisis. in 2008, they became aware that there new engines would not pass regulatory muster. at that point, project engineers made a determination that they
could have an easier regulatory fix, which is to say software. that is the direction they took. so many cars have been if acted and that is where we are at over the weekend -- have been affected, that is where we are. at over the weekend. the incoming chairman numerate it a number of concerns. he did not say, he is pretty clear, they will not sell any additional brands. so bugatti when i be on the table. he is concerned -- so bugatti won't be on the table. he is concerned about their cash. their 25 billion euros cash on hand, but there is a note out that this could cost potentially 78 billion. in the past few weeks, 30 billion has been shaved off their market value.
40%. this is getting to the point where chancellor merkel has finally weighed in, and she insisted there would not be a spillover effect. she said, i believe the reputation of german industry has not been so shaken that we will not continue to be seen as a good business location. one final note on all of the reporting, it is continental, the car company supplier. they may have made the parts that use this software, which means if you have to have a fix that requires no parts, those parts could come from continental. guy: we will be back with hans a little bit later in berlin. i want to show you what is happening with the glencore story. a couple minutes ago, the stock was up 72% in hong kong. we have since come off just a little bit as you can see. ,e are fading back a little bit
up 72% in the mid 50's, 55% is where we are trading now. the roller coaster continues. i think you put your hands in the air and you have no idea where this will go. it is completely all over the place. let's continue with the agricultural theme. farming today is what you're actually watching. this isn't "countdown." running instabilities potash. in someve that corporate deals as well. lets victor caroline hyde for more details on this one. caroline: we are talking root system strength. we are talking crop nutrients and the market has been shaken along with the commodity slide that we have seen recently.
they are not as comfortable splashing cash so down goes potash prices. for k+s,n offer made the german-based company. the number one supplier for potash. it has been withdrawn. taken off the table because this is like market conditions more than the key issue. along with the lack of engagement with k+s's on management as well. they rejected this in july out of hand feeling it was too small. 7.8 5 billion euros was a 40% premium. shares are still higher than when we saw before the deal announced. this is a spike we got before we
understood that the potash was buying up assets. also a new mining project that they have in canada. they were going to gain more capacity and potash but just at the time that potash prices were starting on their deterioration. commodity prices were starting to dig lower. we are still up six to 8% from before the deal was announced but we will see the shares hit today. crucially, deutsche bank said this deal made sense. their second-biggest shareholder. we will have a look at why the investors are going to be disappointed this morning. deutsche bank, number two after emeritus has been over 3.5% of k+s. they did not announce the lower commodity prices that would have been recognized in a share price.
saying now we will see an erosion in the share price. the benefit was that they would be combined, but now they will be factored into the k+s stock price. now we see rival music, the biggest potash company in the u.s. cutting back production. we can now see ipo's being talked of being suspended. pulling back on how many shares they are selling. we see the market volatility starting to hit shares and indeed m&a. guy: busy morning, plenty going on. let's carry on the conversation. chris watling is the chief market strategist. he is here for the next hour. number, deals not being done. it is a difficult environment to navigate. guest: you can add lots of
things to that as well. think it is a difficult environment for the fed. an environment if you look at implied inflation numbers, they should not be rising at all. they should be thinking about going the other way. it is quite -- quite clear to meet that the world cannot take fred tightening -- fed tightening. guy: so if you have money invested, what would your advice be? guest: until the fed starts changing its tune, i would stop being cautious. we have the high-yield corporate bond stuff, but have concentrated more in solvent debt and equities. i would be less inclined toward the cat and western equities and more toward safety. there are times and markets when you can try not to be too clever. mind,the fed changes its
let me tell you about the stories you need to know about this morning. adjust the most on record this morning. i miss reports that are talking to potential buyers amidst -- for the agriculture business. a canadian pension fund is among those interested in buying a minority stake in the agribusiness. it could be worth as much as $10.5 billion. designated chairman
has warned that the emission a nexuscould pose exnsion -- an x istential crisis for the company. company potash has withdrawn its 7.5 billion euro bid for germany's k+s. potash's cash offer had been rejected back in july. droppeden prices have while the bloomberg commodity index of raw materials is down from the peak back in may. portugal has effectively reelected the center-right coalition. victory late last night in the first general election since it exited its
bailout program. austerity measures were at the heart of the manifesto. us through the numbers. give us a sense of how he managed to do this given what we have seen? basically, i think he was able to play the card of stability. the bailout program in contrast greece has had to go through a few bailouts. the economy has been effectively recovering, and i think that has played a role. some voters were convinced by that. the opposition party, in contrast, were not able to capitalize on these fears of huge tax increases and spending cuts. guy: we will leave it there. it looks like we are getting a few glitches on the video line. we will come back later on.
the view from lisbon on the election. did not actually get it majority. it will be interesting to see how it works its way out. this friday, disappointing jobs numbers kill a 2015 fed rate hike. bloomberg's guests remain divided. here is some of the reaction we got. >> this data does show the economy week. >> comprehensively week. >> week job creation, week revision. >> good evidence that the economy has been slowing. >> participation rate back to 1977 levels. >> as long as job growth is in excess of 70,000 per month -- >> even if the economy slows to a 2% growth rate. >> that is growth, in excess of underlying trends. >> it is still growing above potential and will still bring the unemployment rate down. >> we're almost at the sweet spot.
the 2%not that far off inflation target if you take out energy. if you look how far off we are of the fed targets we are not that far off. >> it still does not justify zero interest rates. >> now is not the time to look for the fed to be aggressively raising rates. this report had a big effect on killing off the chance they would raise rates this year. >> certainly take october out of question. >> you can take october of the table. >> it's going to make it more difficult for them to move. >> i don't think it takes december off the table. >> a lot more comfortable today with my march 2016 call. mark reinforces a question that has been in the back of my mind if they missed the window. >> think they did miss the window. >> the window was probably september. >> i think it was earlier in the year. >> may be 1.5 years ago when they should have tried to normalize rates. >> the monetary policy has played itself out.
zero rates is in moving expectations anywhere. >> eventually, you will find yourself in a situation where the economy slows and you are at zero and then what do you do? guy: no pressure on janet yellen at all. which brings us nicely onto, this. our next topic. bloomberg's most influential market makers, the fifth annual ranking of people. yellen on the front cover of bloomberg markets. here to discuss those we included on the list is mcguire. yellen front and center. guest: with a list like this. there will not be that many surprises. areefinition if they influential, we have probably heard of them. guy: the chinese premier is premature at the top. >> slowdown or no slowdown.
he still matters. he comes in number two behind janet yellen. guy: if you were taking a long view of the world, chris, wood yellen sit at the top of -- would yellen sit on the top of your list of most influential? >> if not the top, very close. almost all roads lead to the fed these days. talking aboute emerging markets or the state of the world financial markets, the fed is front and center. whoever is in charge of the fed will be top 1-3 fisher. guy: then tim cook. guest: he doubled apple's profits. he doubled apple's revenue since steve jobs. he is thought to be doing a decent job. guy: does that surprise you? i know that he is doing a decent job, but in terms of -- you look at the disruption in the world.
how the world is changing. apple has not generated many new products. yes it is influential and yes it dominates. look what happened with the iphone 6 and success, but is it influencing? guest: it is. it is influencing. look at the competitors trying to catch up. you can make arguments. one of the fun things about putting this list together is nobody agrees. -- wed up with a list start with a huge list, which is compiled with all of the bloomberg news reporters around the world, and we eventually narrow it down to this. there always are some quirks. but not that many. guy: where is europe? guest: europe is probably where you would expect. the u.s. dominates for the
reasons we have been talking. europe, it is there. there are europeans on the list but it is interesting to see who they are. angela merkel. christine lagarde. they are there as greece. for having managed that situation. europe is -- it has not been a great year for europe. we have some europeans on the list. ann botin is on the list. there are some others. guy: not for the most obvious reasons. guest: there is one that maybe fits into your category of cutting-edge. maybe we don't necessarily think of him that way, but he has helped to promote an industry in london, finntech, that is increasingly important to london.
as the mainstream bank jobs fall, finntech is rising at a high rate. he gets credit for that. obviously it is not all down to him, but he get some credit. guy: can i come back to yellen? credibility is in question at the moment -- guest: and markets, people are asking lots of credibility -- questions about the credibility of the fed. they may even go back to another round of qe, far stretched as that may seem to some. whether the markets would view that is credible or whether she is credible within the mix. it is a tough job and all fed government credibility gets questioned at some stage. guy: if they don't hike, and completely miss a cycle. if they should have raised rates a year ago, where does that leave fed credibility?
guest: this is like the vigilante's comment. we live in a deflationary world. i don't think it changes their credibility, it is just understanding the world we live in and what they have to deal with. the world is very indebted. and has not been the u.s. this time, it is very overseas and the fed sits at the center of that. guy: influence and credibility go hand-in-hand? guest: i amateur they do. -- i am not sure they do. they must be related. guest: it is a fair point but credibility is often not determined until after the fact, whereas influence could be determined in real-time. it could be totally wrong. with yellen, we really are not going to know until down the road as to whether her timing, whatever it is, is good or bad. guest: i would say if she did raise rates, that might work
against her credibility because the markets might not take it very well. paradoxically it might be better for her credibility if she doesn't raise rates. guy: the whole world is geared up for the fed raising rates, clever aboutet this and say the facts have changed and we need to change our views but -- guest: the fact hasn't changed. people are looking at their own facts. we are much more indebted in this economic cycle, it is dollar to dollar and the world cannot take interest-rate hikes. either the way of thinking about the world is wrong or it is too narrow. if the u.s. were an island, you could raise rates but it is not. it's a global economy. eventually we have to take into account what is happening internationally. guy: we will leave it there. thank you very much indeed.
we have a huge conference coming up on this. bloomberg's 50 most influential published today. plenty more to talk to him about. let's talk about what we will talk about when we come back. this vw story will not go away. you're interested in it, it is generating a huge amount of interest on the website. we will talk to said coulter about the vw excess tension crisis. we will come back to it after the break. ♪ guy: 6:45 in london.
talking to potential buyers about the agriculture business. aredian pension fund amongst those interested in buying i minority stake in the agricultural business. volkswagen's designated chairman has warned that the admissions scandal could pose an existing threatening crisis to the company. the canadian company potash has withdrawn its bid for germany's k+s. the cash offer had been rejected .ack in july since then, commodity prices have dropped 16% from the peak.
tech companies are some of the biggest winners in a survey of the most viable brands. our next guest heads of the ventures team. also joining us is caroline hyde. you're talking a scale up bit of the market. is that right? why that? from the earlier stages with venture funds to start with and the fund we had just law for thelaunched, business is coming through that have great growth potential. if youur belief that, are building relationships with great entrepreneurs, you should continue to back them.
rather than looking to make an early exit, to the u.s. or sure that theyn can build those big global businesses of the future. guy: when you talk to founders, they talk about the valley of death. getting to the early stage through the scale up part of the lifecycle. that is when they find their biggest challenges when you get exits and fails. is that where the biggest opportunity lies? is it still earlier or later? guest: it applies of cross the space -- across the space. you are seeing a change in the european entrepreneur market particularly with regards to angel entrepreneurs, investors and seed funds coming through. what do you do,
with the businesses they go out and deliver? to ensure there is the ability to scale up and grow those businesses. that is something lacking in europe today. we are seeing more investors come in, it is exec the what our fund is designed to do. caroline: you have already put some money in. who has more ambition? is it the country doors deciding i don't -- is it the entrepreneurs deciding i don't want to sell a early or is it the investors you are talking to wanting to put money into the funds and feeding that it is a worthwhile money winner? both: it is a matter of and it comes back to that confidence in the ecosystem. entrepreneurs are thinking larger. you see with the entrepreneurs out of the law film group which
sold to amazon in 2010, there are a series of entrepreneurs who came out of that particular business and created new businesses. people like alex chesterton who created supla. caroline: you are getting money pumped back into the system. which sectors should you be looking at? you were talking property, you have also talked about holidays. what is the most interesting when you're looking at the hubs of berlin or london. guest: for us it is down to how can they efficiently use capital? if you look at the adoption of smartphones, and cloud computing, there is a real opportunity for european entre nous ares -- entrepreneurs to build businesses with -- a most influential list today and george osborne makes the list. not because he is the
chancellor, but because he has been a major influence in promoting london in the finntech center. is that an area that really represents london? canhat an area where europe succeed and drive forward along with our peers in silicon valley? guest: europe has always been a hub for financial services. has fantastic investment banking, as well. financial services and that technology helping to address that area is important. the areas that is really interesting from a george osborne sandpoint is what does the government do with regards the tech city is that they helped create tech city and insured it, but5 then they got out of the way and let the private companies develop it further. that helped create this vibrant ecosystem. with regard to finntech, it is
global. london is well positioned between new york and the asian markets. that provides the opportunity to take global businesses. guest: it is interesting what you said about george osborne and the whole sector. to kickstart more growth in the economy is getting these thicknesses to bigger size, isn't it? you mentioned that the government helped set up the 1 -- are they doing more? this is terrific for growth. stay during the cycle and support businesses. guest: i think that is right. it is a matter of supporting across all the stages of growth. beenf the areas that has lacking in the u k and europe is how do we scale up those businesses. is not just about finance, it is also about talent. attracting great talent into those businesses. if i give an example, there is a business in the finntech industry that started in the
u.k., is now in 23 companies with the exception of the euro states. they have got to europe and then the asian market. caroline: are you worried about brexit if you are looking at talent? guest: the whole question is, how can you bring talent to the u.k.? there were great initiatives with regard to coding in schools but that is a long-term program. how do you bring that talent that is needed to really drive the growth of these businesses today? guy: we will have to wrap it up there, thank you for your time. caroline hyde will be back a little bit later. plenty more to talk about on the corporate front. let's carry on the conversation the chief watling, strategist at longview economics. the tories are debating europe today. it is one of the subjects that is front and center in manchester today. when you look at the risks over the next 12-18 months, how high
does that brexit risk feature? guest: it is not insignificant. it has to play into the weight you think about the economy, the uncertainty it could create. the risk in my mind is exaggerated whether we go in or stay out. eu agnostic. the guy: i'm not sure you are allowed to be. guest: i know that you are not. but we could do better without being in the eu. it is six of one and half a dozen of the other. it may have a bit of an impact on capex and deferring decisions, but growth is strong. we just revise the whole recovery upward in the last few weeks. it isn't about brexit. it is important but not as important as people suggest. guy: we will find out whether mark carney shares that view on thursday.
tim is here from our digital team. the germans are getting all french with phrases like existential crisis. vw chairman is talking about the whole thing being at risk. guest: they have lost 30 billion euros of market cap as a result of the scandal. he does say that it doesn't have to but that it will take a lot of work for them to survive this crisis and it really does. it goes to the heart of the company and how they resolve this or get out of this, and how do they regain trust of the consumer. that is a really important question. how many people will want to go out and buy a volkswagen today. guy: i heard people just receiving delivery of some of them. you get a new vw diesel on your doorstep, actually, go away and fix it. the little bit of interest is fascinating. it goes to the heart of so much of what we are watching.
germany is really taking this -- i was asking hans nichols thiser, talking about, still plays front page and german newspapers on a daily basis. do we fully understand the shockwaves rippling out in terms of the zeitgeist in germany about the impact? guest: how could it not. it is a gigantic german corporation. during the gulf crisis with bp here, that was front-page news as well. a similar situation. it strikes to the core of something that is essential to what germany is. it is all about engineering and cars. guy: if we cannot do this what can we do? play football. guest: i was in germany last week trying to talk about the fed but this is half the conversation. in munich, they take a slightly different view. guy: that is a totally different story. [laughter] guest: they are the bmw state,
guy: glencore stock surges almost 72% in hong kong. vw's existential crisis. the incoming chairman warns that the emission scandal could threaten the survival of the world's biggest carmaker. canada's corporation withdraws 725 billion euros offer for germany's k+s. good morning. you're watching "countdown."
let's talk about where we think this european open is going. and k+s front and center. we are still feeling our way through that very week payroll number friday. i'm looking at some numbers being posted. quite strong in terms of fair value. on most a plus 2% rise of the european equity markets. the euro stoxx plus 2%. the ftse plus 2%. dax up 1.8%. k+s could be a drag on that. looks like we are going to get a positive open in europe. that is the fair value calculation. that includes the futures price and dividends. that is the number the terminal is putting out. it looks like we are a positive open in europe. that seems to be a story we are also seeing in asia. let's find out what going on there. shery ahn standing by with the
details. shery: a very positive story developing in asia. stocks rising for four consecutive days. sincengest winning streak july. we have seen that positive momentum coming from the u.s. with disappointing employment and factory data undermining the case for a fed rate hike. we are seeing japan closing higher for the fourth consecutive session. it is the highest level in two weeks, up 1.6%. the kospi also gaining half a percent despite a stronger won. we have seen that rally in metals helping mining stocks as well. bhp billiton in sydney gaining almost 4%. the afx finishing 1.9% higher. new zealand up 0.7%.
+++ consecutive session of games. we have seen glencore as you mentioned earlier in the program soaring in hong kong today. but it's not just the metals or commodity stocks gaining in asia. it is also casino stocks in hong kong. we are hearing that chinese visitors during golden week went to macau, to that gambling hub, and that has boosted stocks. all rising today. we are hearing that chinese visitors to macau surged. they account for two thirds of the total. we are also seeing reports that the chinese government may help boost the city's economy. that is helping these stocks that have been battered in the past few months, in the past year actually, with revenue from gambling slumping for 16 straight months.
shery ahn, thank you very much indeed. shery ahn mentioning what is happening with glencore. let me show you a three-day chart. there's the intraday. we're up 40% out in hong kong. how is that going to translate into europe in terms of the way the stock opens? let's talk about that. ryan chilcote is here with the details of why the stock is on the move this morning. a bunch of bankers, but the act unit seems to be at the central. ryan: there appears to be a robust number of buyers. we learned over the weekend that singapore's wealth unit is interested. in addition to the saudi's that we heard about late last week, in addition to that, a bunch of trading houses in japan of to be interested. even a canadian pension fund. there are a lot of buyers.
the second thing we learned is that glencore is talking to these potential buyers about potentially carving out the agricultural business. these companies would get, the would-be buyer would get a minority stake. that is one thing you need to know. second, copper also rising. 72%core up by as much as about 50 minutes ago. part of the story is, people overdoing, i think, the commodities side of things. copper rising today. copper represents about one third of glencore's earnings. after the close on friday, hisen's analyst raised recommendation to buy. share price right now, london is what we want to watch. he's got a target price over the next year of 130.
we are at 95 today. my guess is, if we see what's going on with the asian shares, if london reflects what's happening with the hong kong shares, we could get close to 130 today. and he could tell you to sell. guy: the analysts are finding it hard to keep on track with glencore at the moment. we will leave it there. we've got breaking news coming out from lloyds bank. we are seeing the chancellor of the s check her, george osborne on his feet later on. we've got news from caroline hyde at the treasury. caroline: george osborne will take to the stage to talk about selling off lloyds banking group. they want to end this back to private investors after the bailout in 2008. they had to bail out to save lloyds bank. they've already cut their stake below 12%. by spring, they will be selling 2 billion pounds worth at least of lloyds shares.
indeed, it's going to come at a market discount. 5% of the market price will be offered, that's the amount that is actually going to the public. the statement really saying this is the beginning of putting the retail sale of lloyds back into the hands -- it hasn't been going to institutional investors thus far. now, the public gets its chance to buy the stock. we saw it happen with royal mail. perhaps not as successful as many had felt. that was during the coalition government. many felt that royal mail was sold too cheaply. perhaps we see lloyds banking group more fine-tuned to be able to feel they get the most for the public purse. has 15, the government billion pounds worth of money from selling lloyds, cutting their investment. they need to make sure the share price is above 73.6 pence.
that is the break even price, they say. if you look at lloyds banking group, if you look at the share 76.55 we are currently at when you're looking at the price of lloyds shares. they need to sell the shares of a 73.6. they also want to offer them at a discount, five below the market price to the retail public. we will see what price point they get. they say this will be done in spring. at last, the retail investor gets a chance to buy shares. guy: now they get a chance to own them in a different format, one way of looking at it. thank you very much indeed. chris is the ceo and chief market strategist at longview economics. i want to take you back to the glencore story. one of the reasons it is being whipsawed is it is struggling to find a way of navigating through the big drop that we've seen in
commodity prices. worth onour twopence where you want to see prices going. >> it's a very mature bear market. commodities have been in a bear market since 2011. longest sincecond world war ii. i think some of the commodities are perhaps not quite there, iron ore being a case in point. copper is significantly above what i would regard as its clearing price for production cost. there's still excess supply. theoretically, some downside. i think there's an argument perhaps the chinese housing market is turning, which is positive for copper in the medium-term. i'd say copper is finely balanced. it a mature bear market. we probably need a little more pain. maybe glencore was giving us that. not anymore. generally, there markets end with pain.
guy: the correlation between commodities and emerging markets, does it pay these countries to have a cathartic moment as well? >> it could well be related. i think brazil is a case in point. you see prices on brazilian debt rising dramatically in recent weeks. and an economy that's very weak, politically weak as well. together.t could play guy: your view is the fed should back off. if it does back off, what is the read across into commodities and emerging markets? >> if it backs off or even goes the other way, steps back to qe, which is plausible in my opinion, then i think we see a rally. they are very beaten up. the fed taking its foot off the pedal or pressing the
accelerator would be terrific. guy: how quickly does that happen? >> you probably need more drama in markets to convince the fed to change its mind. are kind of looking for an entry point into commodities. you think that more pain comes at a better entry point. >> i suspect so. while the fed keeps on pressing on this rate hike scenario, the pressure continues to build in emerging markets. perhaps not that far away. it could be quite quick. i wouldn't be surprised if we made a major low in october. guy: in emerging markets. >> across the board. is a, if that low meaningful low from here, that would move the fed to change its mind, in my opinion. guy: chris, stay with us. plenty more to talk about.
i may have made a mistake. chris, we are leaving you. thank you very much indeed. chris from longview. stay with "countdown." it is a big week for data. later today, we get another read on the u.s. economy. we get u.s. services data. overnight tuesday, we get the right decision from australia. wednesday, bank of japan. watch that one very closely. on thursday at noon, we get that decision from the bank of england. can it move without the fed moving first? we will talk about that. ,"ming up on "countdown volkswagens existential crisis. strong words from the incoming chairman. we will analyze what is next for this scandal-hit company. ♪
need to know about this morning. glencore shares jumped the most on record in hong kong after reports of the commodities trading giant talking to potential buyers for its agricultural business. singapore's sovereign wealth fund and a canadian pension fund are among those interested in buying a minority stake in the business. $10.5it could be worth billion. a canadian company has withdrawn its 7.8 5 billion euro bid for germany's k+s. comes amid a decline in equity markets. the offer had been rejected in july. prices have dropped significantly. run materials down 16% from its peak in may. caroline hyde is here with some calls on k+s in a moment.
the u.k. government has announced that it will sell at least 2 billion pounds of lloyds banking group shares to retail investors. the sale will see the public offered a 5% discount to the market price. the move is part of britain's plentifully exit its shareholding on lloyds in the coming month. that story certainly going to be front and center i suspect in manchester. britain's eu membership also taking center stage at this year's conservative party conference. europe is never officially off the agenda when it comes to the tory party. david cameron said he wouldn't rule out a brexit if he doesn't get the reforms he's trying to negotiate. let's get out to my colleague in manchester, anna edwards. over to you. anna: thanks so much, guy. let's talk to our first guest, john longworth, director general of the british chambers of commerce. thanks for joining us.
let's start with europe. we don't know much about the negotiation taking place between david cameron and his european partners. what messages at you been giving to the government? what needs to be in that negotiation? >> at the top of the agenda is the relationship between the eurozone and countries that are in the eu. what will happen to those countries and how will europe develop in its legislation making capacity? a big risk of non-eurozone countries if they become politically and economically marginalized. second on the agenda is repatriation of powers to u.k. parliament for future legislation so the u.k. can block future legislation like a series of things around widening the single market. the u.k. is predominantly a service sector economy. there's no single market in services in the european union. the goods market is another
thing. we getting lots of legislation introduced. anna: do you hold out any hope of a capital markets union across europe? in particular, u.k. businesses that want to sell services? >> there's a determination on the part of the u.k.'s representative in europe to drive that thing through. it is only in financial services, of course. speaking, all the other service sectors, which are a vast range of things from architecture and engineering through to legal and financial advice, etc. all those sorts of services. no single market in the eu. it makes it very difficult to negotiate an fta with the united states. how can you have a single market in services with the u.s. if europe hasn't got one? anna: let's talk about
infrastructure. you must welcome an increased focus on infrastructure investment. >> absolutely. infrastructure is one of the bed rocks of a great economy, and getting exports going as well. it gives us a very good signal that the government wants consensus. infrastructure is long-term. what we've got to see is actual action on the ground. that's the thing that's missing. lots of statements, lots of catchphrases, very little actual action on the ground. anna: we already have a commission around airports. the davis commission recommended expansion at heathrow. the leading candidates for mayor in london both exposed -- opposed heathrow expansion. >> we've had the davis commission, everybody said go along with the davis commission, a very thorough investigation, and here we are still waiting for the answer.
we've got tw mayoral candidate'so opposed to heathrow. how does that work? it is a very symbolic thing about how the government can't get to grips with infrastructure. anna: we just heard this morning that the government wants to continue to sell down its stake in lloyds banking group. that was no surprise. they offered to retail investors this morning. the banking sector going back into private ownership, is that something your members welcome? >> absolutely. we need to have a strong banking sector. it is a very important part of the u.k. economy. we need a competitive banking sector that is able to give the rest of the business sector the finance they need to grow. having a strong banking sector in private hands is right. the taxpayer needs to get the return for the investment they made. quite terrible
images of some of the protest activity that took place in manchester yesterday. as somebody with so much experience in the business community, dealing with politicians and that whole relationship, does it worry you that we are seeing that kind of activity? are we seeing polarization in u.k. politics? >> on one hand, britain has a long history of protest. protest has created change. having a polarized political situation in which one of the parties is saying protest is a good thing, obviously we are going to end up with more protests. you have to be careful what you wish for. violent protests is often the result as a consequence of people going too far. anna: thank you very much for joining us. john longworth from the british chambers of commerce. back to you. guy: thank you very much indeed. anna edwards out of manchester. the emissions scandal could pose
an existence threatening crisis from volkswagen. that is the verdict of the company's incoming chairman in an interview that he's done. vw has until wednesday to present a plan to fix 2.8 million vehicles in its home market. lets the to hans nichols in berlin. strong words from the economic chairman. he was the- hans: cfo. they have an internal presentation that he made. here's what he said. it is an existence threatening crisis for the company. he's concerned about the books, about liquidity. he has said they've ruled out disposing any brands, any units, nothing like porsche will be gotten rid of. what they do have is a potential liquidity problem. they have 21.5 billion on the books. there is a report from credit
suisse that says the total cost could be 78 billion for volkswagen. over the weekend, chancellor angela merkel weighed in on the crisis. she's trying to assure the rest of the globe that this will not dent germany's reputation. here's what she had to say. i believe the reputation of german industry, the trust in germany as a business location, hasn't been so shaken that we won't continue to be seen as a good business location. the new chief executive officer took out several ads over the weekend. it was german unification day. instead of talking about german unification, he pledged to win back trust. that is part of volkswagen's overall push. 2008,wspaper reported in that is when the company first learned they had a problem. they could either scrap the entire investment in this engine or, around with a regulatory
workaround. they went with the regulatory fix. that is the software. it looks like that is the root of the scandal. guy: hans, thank you very much indeed. hans nichols in berlin covering the vw story. another top corporate story, market volatility. the recent commodity rout waiting on a possible deal in the commodity sector. we are talking about k+s. let's get the latest with caroline hyde. caroline: we are talking a 7.85 billion euro deal that is now off the table. potash was offering that amount of money for k+s, europe's largest potash maker in germany. because of market conditions, because of the downward trending prices, they are not wanting to splash the cash. potash prices have been going down.
market conditions made the deal far less favorable. there is a general lack of engagement. k+s the story broke, rejected the offer as too low. now, the deal is off the table. let's look at how the share price performed. this was back in june 26 when we learned of the deal. we are currently up 30%. we are now getting calls that this stock could fall 15% this morning as we see that m&a come off the table. key investors are going to be disappointed. deutsche bank, the number two shareholder in the market, they've been saying you now have to factor in the lower commodity prices into the share price. that is going to drive down the stock. that's what we heard from deutsche bank. rivals cutting production. a torrid time in the market. guy: caroline, thank you very
guy: these all this you need to know. glencore shares jumped the most on record overnight in hong kong after reports that the commodities trading giant is talking to potential buyers about its agricultural business. singapore sovereign wealth fund and a canadian pension fund are among those interested in buying a minority stake in this business. ass could be worth as much 10.5 billion dollars. potash has withdrawn its bid for germany's k+s. the move comes amid a decline in global equity markets. potash's cash offer had been redacted in july as too low.
share prices have dropped while the bloomberg commodity index has raw materials down 16%. the u.k. government will sell at least 2 billion pounds of lloyds banking group shares to retail investors. the sale will see the public offered a 5% discount from the market price. the move is part of britain's plan to fully exit its shareholding of lloyds in the coming months. we mentioned glencore. let's find out exactly what the story is. shery ahn has the details from hong kong. shery: thanks, guys. oil extending gains, over $45 per barrel. that rally in metals is also helping mining stocks across asia. you mentioned glencore. they are soaring. bhp billiton gaining as much as 4%. we are seeing the benchmark index at the longest winning
streak since july, rising four consecutive days. major benchmark indices across asia are gaining. the nikkei closed higher by 1.6% today helped by oil and gas producers. other stocks that have been gaining in japan as well, softbank leading those games. they gained more than 4% in japan. japan thatd heard in iron and steel producers were attractive given that credit suisse was saying that infrastructure-related companies could be attractive. a report by the nikkei newspaper saying that first-half operating profits jumped 80%. mainland shares in china closed today on holiday. hong kong still trading. we are seeing casino stocks soaring after we heard from reports saying that chinese
visitors during golden week surged, not to mention reports that the chinese government could be helping the city's economy. guy: thank you very much indeed. we are 27 minutes away from the european open. clearly, still reacting to what happened friday with the payrolls and the stock rally. we think at the moment -- this is the fair value calculation the bloomberg terminal gives us. we think this is where european equities are going to open. 1.9% probably the average. the dax looks like it is going to open softer. glencore is going to be interesting for the london markets. i guess the question everybody should be asking is, who is buying the stock that is seeing such large volumes in hong kong? still really one of
the overarching themes as we work our way through our thoughts on when the fed will hike. we've been talking to a bunch of people, trying to get their sense of exactly what's going to happen. we put them together to give you a feel of where our guests think we are going with rates. >> this data does show the economy week. >> this is disappointing. >> weak. >> good evidence that the economy has been slowing. >> participation rate back to 1997 levels. is inlong as job growth excess of 75,000 to 90,000 a month -- >> even if the economy slows to a 2% growth rate -- >> that is growth in excess of our trends -- >> it is still growing about potential. >> we're almost at the sweet spot. we are not that far off.
is down tot rate 5.1%. if you look at how far we are off, we are that far off. >> it still doesn't justify zero interest rates. >> right now is not the time to look for the fed to be aggressively raising rates. ons report had a big effect killing any chance that that is going to raise rates. >> certainly take october out. >> take october off the table. >> going to make it even more difficult for them to move. >> i don't think it takes december off the table. >> i feel more comfortable today with my march 2016 call. >> it reinforces the question in my mind, whether the fed has missed the window. >> the window was probably september. >> i don't think it was september. >> maybe a year ago. i think the monetary policy has played itself out here. zero rates isn't moving anyone's
expectations. eventually, you're going to find yourself in a situation where the domestic economy slows and you're at zero, and then what do you do? guy: conflicting views. bigmarket, quite a dispersion in terms of where we anticipate the first rate hike will come through. october is in most people's book off the table. is december still there? we will find out. there's a lot of pressure on yellen. she is the most influential person in the world. that's according to bloomberg's most influential market makers, our fifth annual ranking of people that matter to the markets. it is published today. joining us to discuss the names included is bloomberg markets senior editor stryker mcguire. our portfolio manager at
morgan stanley. let me start with you. the fed is in charge. it goes into every aspect of just about every market. >> absolutely. that wonderful clip is really instructive. you could imagine mark carney waking up and looking at that and saying, thanks. guy: what do i do now? yellen,think about influence is one thing. the market is trying to understand her. understanding that influence is difficult. she is clearly influential. trying to get a sense of what the fed is going to do, really quite difficult. huge, butnce is understanding how that influence is going to matter, very difficult. >> a lot of people make and lose money on those bets. what people are involved in is second-guessing what she's going to do, trying to figure out what
advice she's getting. it is conflicted. guy: the chinese also make the top spots. the president, right up there. he's obviously had a huge influence. the chinese story, the stock the fede read across -- mentioning what is happening in china. they almost go hand-in-hand. somebody on that list, most of them are by definition quite well-known to people watching this program, but there's one who will be less known, which is a guy named -- theho is the head head of something called, i can't be expected to remember this -- the central commission for discipline inspection. guy: quite a business card. you're a member
of the 1% in china. he's basically in charge of xi's anticorruption campaign. that is having an influence politically, but even in terms of spending in china. there are a lot of people at the highest level in and out of government who are wary about how to spend money. macau,, for example, in the gambling resort receipts are down because people are just being a little bit wary about this guy. zi, during the cultural revolution, shared a cave in china. they had been shipped out. shipped outside of beijing. shared a cave together. ricardo, when you think about the world right now, you've got the fed, china, hugely influential. how do you read this working your way through the next
quarter? you've got so much still to be determined with the fed and with chinese policy. you're trying to put money to work. how hard is it? >> it shouldn't be any harder than usual? you take a three to five-year view at least. a lot of this, you take it on board, but you still need to look at other data. u.s.ayroll numbers in the are slightly disappointing. if you look at the other data that's been coming out, not all of it has been negative. even in china, which people seem to be fretting over. retail numbers looking good. housing numbers looking good. the only disappointment has been in the manufacturing sector. likewise in europe. they've all been positive. --ot of people are saying
there is still more reason to be positive than negative. we've got a earnings season coming up in the next two weeks. interesting to see if those fears are coming through in the numbers. what we are seeing on the ground is that it's not happening. it might be a bit of a storm. the interesting thing to see is if that confidence then goes into the numbers for companies and into the real economy. guy: talking of the corporations, one that has a big influence is apple. it kind of reaches into the u.s. consumer, to the chinese consumer. tim cook right there on the list as well. >> absolutely. in some ways, it's kind of a tired story. it's totally expected. and yet, as we were talking about earlier, apple is not as disruptive as it once was. there are firms out there that
are more disruptive and that will, when their time comes, they will be influential as well. i think one of the things about influence as opposed to credibility is that influence, it's in some ways quite a micro thing. what is happening this morning? what do we care about today? credibility is something that, six months from now, 10 years from now, people will be looking back at yellen and assessing her influence at the time. guy: fascinating stuff. thank you very much indeed, stryker mcguire, editor of "bloomberg markets." ricardo is going to stay with us from morgan stanley. coming up on "countdown, we look ahead to the market open. stocks look fairly strong as we had in. ofncore saying it is unaware any of the reasons behind the share move. this is a pretty tightly held stock.
who is buying the stock on such big volume to generate this kind of pop? we will look at glen care. we will look at potash. maybe a stock to watch as well. share, we've got the placing coming through from the government. k+s want to think about as well. we will be back in a couple minutes time. european equity markets looking 1.8% to the positive. ♪
these are the stories that you need to know about this morning. glencore shares jumped the most on record overnight in hong kong after reports that the commodities trading giant is talking to potential buyers. singapore's sovereign wealth fund and a canadian pension fund are among those interested in buying a stake. glencore has actually put out a statement saying it sees no reason for the share price move
in hong kong overnight. canadian company potash has withdrawn its 7.85 billion euro bid for germany's k+s amid a declining market. potash's cash offer had been rejected in july as too low. prices of potash have dropped. down 16% from its peak in may. the u.k. government has announced that it will sell at least 2 billion pounds of lloyds bank shares to investors. the share sale scheduled for next spring. we will see the public offered a 5% discount. the move is part of britain's plan to fully exit its holding of lloyds in the coming months. busy morning. lots and lots of corporate news. how do we think this is going to factor in to what looks like a fairly positive european start of stock trading in around 12
minutes? caroline hyde is here with some of the details. caroline: the stoxx 600 could rally for a second day. it was initially worried by the very poor u.s. data. if you look at my chart, stoxx 600 dropped into negative territory when we initially saw those numbers coming out. u.s. employment much below what has been expected. just 142,000 in august. factory orders falling. and then we creep higher. this means we've got lower rates for longer. more cheap money. more reason to buy equities. we could see the stoxx 600 rally for a second day. glencore, you've been all over this story. at one point, up 70% on today's rally. now coming off those highs. it looks as though glencore itself is unaware of the reasons for the share move. speculation is building that it
could sell its agricultural business. the analysts over there saying glencore's sale price is well advanced. toy say it could be worth up $10 billion. this is an asset that is up for grabs. this just relieving some of the pressure concerns about the balance sheet. could it be the singaporean sovereign wealth fund? could it be a canadian pension fund? meanwhile, a company that's being undone and perhaps is likely to fall. k+s. big player in germany. big on the dax. k+s, potash maker. all about nutrients. could fall as much as 15%. that's what trait gate was saying. potash corp., the canadian company, withdrawing its offer of 7.85 billion euros. we know that deutsche bank is the second biggest holder of the
stock. they've been saying you would now have to factor in lower commodity prices. telenor, keep an eye on that. they are selling off their russian asset, vimplecom. anywhere up to $2 billion worth. they have about 33% of vimplecom. it been hurt by russian economic slumps. they feel it is no longer in their interest to hold this asset. out of a pretty torrid asset. guy: busy morning. caroline hyde running through some of the key stocks to watch as we head into what could be a positive open. ricardo from morgan stanley investment is still with us. caroline mentioning the k+s story. people are walking away from big deals. >> you've got to put it in perspective. we have for many years now a
very favorable market for m&a. i think those conditions will still continue. cheap financing, high stock valuations. a lot of companies have very strong balance sheet. in a deflationary environment, ways tos need to find grow the top line. m&a is one way. a lot of the deals have gotten bigger and bigger over the years. one of your reporters did a good report showing that deals $10 billion and above have been at their highest level since 1999. i think that's very relevant. it seems simplistic, but the bigger the deals, the bigger the companies, the more likely it is to fall by the wayside. you're talking about companies with hundreds of thousands of employees that span the globe. you've got a lot of geographic areas to consider. it does become more difficult. for its ownlls
specific reason. sure there are specific reasons. by definition, the bigger the deal, the more likely it is to fall through. you've got a lot of egos involved as well. guy: think financing is part of it as well? the credit markets are looking a little tighter. volkswagen may be part and parcel of that. glencore may as well. >> possibly. there's no doubt that in a lot of deals, the difference in valuation sometimes is going to be quite large. that probably comes down to timing. a lot of companies are probably taking a 5-10 year view of what they're worth is. some bidders being more optimistic. guy: when you look at the markets, when you're trying to understand how a company
represents good value or doesn't, it seems the wind is pulling us around at the moment. china slowing down. fed, will it or won't it? commodity prices. so many things at the moment make it hard to value a company. >> it's never easy. the bigger the noise, the more difficult it becomes. an above the take cycle view. you're right. at times such as these, when risk aversion goes up very quickly, there's a lot of volatility. there's a lot of macro issues. volkswagen, glencore. it does make our job far more difficult. ricardo, thank you very much for giving us your thoughts. been a very busy morning.
the glencore story, volkswagen, fed to think about with the payrolls. 're going to carry on the conversation as we head into what could be a positive market open. jon ferro, what is on deck? jonathan: we already face another ridiculous trading session for glencore. up as much as 72% in hong kong trading on very little news. back to friday, we were trading in london when the news broke that there were buyers in the agricultural business. up 4% in london on friday. 72% in hong kong? there was a report that they may be open to take offers. with the statement that they are unaware of the reason for the share price movement, i would take that as an effective denial that that is happening. a ridiculous swing in sentiment for the stock. ridiculous move in sentiment for markets and for the fed in
general. friday, we come into a payrolls number. probably the least anticipated payrolls number in months. the october fed rate hike probability, 8%. guy: 8%. fascinating. i don't know how we deal with these numbers. thank you very much indeed. jon ferro coming up with that one. glencore, k+s, the fed all in the mix. we looking like a very positive open for european equities. 1.8% to the upside. 1.5% for the next. we will see you tomorrow. ♪
jonathan: good morning and welcome to "on the move." i'm jonathan ferro. just moments away from the start of european trading. glencore surges. the hong kong listing jumps as much as 72% following reports the company is talking to potential buyers for its agricultural business. vw's existential crisis. the incoming chairman warns that the emission scandal could threaten the survival of the world's biggest carmaker. asian equities rally. the regional benchmark heads for its longest winning streak in months. ahead of the open, i've got
futures higher, much higher. ftse futures up 109 points. dax futures up 170 points. it seems that knows is once again good news. let's get your market open with caroline hyde. caroline: it is lower for longer. cheap cash keeps on coming. as we see that very or u.s. data coming out last week, on friday, 142,000 jobs added. well below expectations. wages don't increase. the market gets exuberant. only a majority in march is when we see more than 50% of a probability of a rate hike. not until march. that is helping drive money into the ftse 100. we are waiting for the dax to open. it closed up half a percentage point on friday. we got those numbers out at 1:30