tv On the Move Bloomberg November 30, 2015 3:00am-4:01am EST
20 seconds ahead of the market open. pre-much dead flat with dax futures also down by roundabout exploits. what a monumental week it will be in the space of 24 hours until we finish trade on friday. and thellen will speak payrolls of the last glimmer of the strength of the u.s. economy . is trading below $40. that is a new record low. interesting information from barclays saying that earnings expected to grow by about 5.5%. that is the second lowest expectations since 1988. the outlook for the european map and its earnings seems to be coming under pressure. commodities are the key. iron ore at $40 per ton is
critical, despite the fact that there are moves to restrict supplies. 7.5%.s down of course the interest is in what is happening with the commodities. we are below $50 for the fourth month in a row, and in terms of copper, 2009 lows last week. the market seems to be ignoring the moves by the chinese. you are seeing a little bit of a move lower on the commodities. forward withoing one billion euros. agreed on terms for some of their striking members. bff -- ab inbev maybe sinking.
trying to solve the takeover issues in regard to the $107 billion deal. waiting for lufthansa. jon: the ftse 100 opening lower this morning. if you woke up early and look at the shanghai composite you would've seen a choppy session. forget christmas, it is beginning to look a lot like august. despite the fact it had been down by 3%, 90 minutes before close. there was a little speculation that the government had septic -- stepped in to prop up chinese equities. chinaurnaround in actually occurred after the other markets in the region had nikkeiall stop japan's 225 done by 0.6%.
-- it is moving in there and australia's closing as well. ont of the coming through the shanghai composite was coming and banking stocks so we have a look at some of the biggest movers. we started to see a turnaround in the likes of the bank of china and the bank of beijing. if we have a look at the brokerage firms they still closed lower on the market. securities were suspended during trade on friday and it fell by almost 10% at one point, closing down by 9%. both being probed for alleged breaches on margins and a shortselling contracts. bhp and the mining giant falling to its lowest level since 2005, saying it hasn't yet been
contacted regarding a potential $5 billion compensation claim from brazil -- from brazil. jon: juliette saly in hong kong, some technical problem's. the hang seng down by 0.3% in the shanghai composite erasing losses overnight. coming up on this program, climate talks begin in paris. do you need to build a carbon risk premium into your portfolio? and turkey in focus. the eu gets up a checkbook and russia unveils new sanctions. thanthe heat is on is more 140 world leaders are gathering ahead of negations -- negotiations on a global agreement.
the avis to stop global temperatures rising or the two degrees celsius. caroline hyde's lies -- live at the summit for us. what is at stake? caroline: at stake? agreementglobal meeting emerging markets and developed markets agreeing to halt the worst effects of climate change. at stake is water levels rising and 4000 chinese nationals joining every day. and it is a call to the very existence of some island nation that would literally sink if sea levels continue to rise. from a financial point of view what is at stake is the future of football fuel. the movement of money into renewables and already, $2.6 trillion under management from asset managers saying we will no longer invest in fossil fuel. clearly the money is moving out
and into the renewable energies. winde starting to see the in the sales of these 140 liters , 100 95 countries attending the u.n. gathering on climate change. pledges fromput in 2020 how they will reduce their emissions. but that is not enough. at the moment the pledges would mean we see 2.7 degree rise in temperatures. what can be done to ensure that more is needed to tackle climate change. there have been changes made but we also have 2000 cities in 2000 companies saying they will sign up. we've already heard from others, the foreign minister of france saying these disagreements that need to be overcome over the next two weeks. the biggest ever gathering
on one day of world leaders. this is the flamboyance of them coming together to start the momentum to begin to make agreements between developing and developed world's. remember them a $100 billion per year. will they manage to agree to that and what kind of agreement will we get? many challenges ahead but it seems the momentum is there. u.n.let's look at how the climate change conference could impact investors. him is the chief investment officer at rathburn collect money to blame pounds and asset management. the stranded asset. , the idea that about 1/5 of energy reserves will be able to be burnt because of the climate change talks and the regulations that come out the other side.
>> we're a long way away. and a think the oil companies have come out swinging to some degree. like the statement talking about trying to embody within their own targets the ambition. and they see graph -- gas as a transition fuel. so i think we are getting ahead of ourselves. there are decades of oil and gas production required before the world can never fully rely upon renewables. conferencessorts of , sometimes they tend to win out. applyhen you sit down and to these individual measures whether the shell or bp when do you start thinking about carbon risk premium, how many years away is that?
>> it will probably be after i retire. you are seeing some of the more expensive and carbon rich areas, such as getting out of alaska and drilling. some of that momentum is starting. jon: julian, for you as a fund wonder if it'll ever be the guys that lead this change. the dividend comes from the energy players and i don't want to go to sovereign debt because the yields are at all-time lows. >> i would say that you have to work with these companies. we have been working with the likes of shell for the last five years. so consequently, you will be seeking income to the marketplace but there are other places to go and on fundamentals have falling oil prices i can
talk later about the saudi and opec conference but that is again what prices oil in six months time. jon: who is ahead of the curve? gott: i would say shell has on the front first. they will go out there and start punching. about been much more open getting on the front foot than his predecessor. whether they actually win in terms of look opinion is the basis of something else. but can say we are prepared to make the case for oil companies in this apartment. if you look at these oil companies, they can produce the oil and over 50% will be gas. of the carbon emitter of coal. so in a logical world, that is
something allocations expect in a transition debate. jon: final question to you. the biggest regulator will be the price. stop the expectation of some climate change rules out of this meeting in paris. will that be the biggest regulator? >> i we are all expecting carbon pricing to rise and they have to be prepared for that. they called for because it helps them. it is also powerful going forward but part of it is price. >> thank you very much for joining us this morning. jillian will be staying with us throughout the hour. next up on this program, the imf is set to announce whether it will add china to its basket of reserve currencies.
has stepped down after he was jailed indefinitely. andre estevez was jailed after the country's largest corruption probe. he has denied the accusations made against him. turkey and eu leaders agreed on a deal. they will get a package of 3 in exchange for meanwhile,ugees and russia has announced measures against turkey in response the downing of one of its military jets. another big story today, in china, the imf officials gather today in washington to find out if they should make them one of the reserve currencies. if approved it sits alongside the dollar. our chief agent economics correspondent will be joining us very shortly.
julian chillingworth's alongside me to discuss it. does it change anything? the yuan? do you care? does it matter to you? >> i think long-term, it will matter because it's legislation of the yuan and it means that large pension funds will overtime be a cumulative that you one assets, but in the short term, much of this has been leaked already so consequently in the very short term, the chinese will not be keen to see the currency appreciate anyway and they will be building up reserves. so on that world stage a don't think it will have a big effect. jon: there will be some american politicians who will call chinese -- china a currency in the later. is it any different to the euro?
allt: truth be known that major g-7 countries from time to time will be involved in currency intervention. it is what suits your politics and whether you are running for election. us, you of that discussion. we are debating whether it should be included and what it means to china. let's begin with the letter. what does it mean? is it perceives or does it have a real economic impact? victory, is a symbolic especially for the reformers in china. let's remember that even a decade ago, it was seen as undervalued.
traded andwidely right now, america has a bigger stake than it did a decade ago and it is growing its share of the global trading as a trading currency and along the way they're slowly making reforms to free up the currency. and it is a along big symbolic victory. isthe overwhelming consensus if it gets the stamp of approval today, as you have noticed in hong kong and beijing it would be the justification. how do they justify given what happened throughout the summer? guest: that is definitely one of the problems of this approach. may, one ofl in their big pushes was trying to
secure a victory on the msci index. a few weeks later the shanghai stock market crashed and they're looking quite tattered. run the same time in august they devalued the yuan. it is open to interpretation and debate, but the point is it caused a trigger effect in the chinese policymaker credibility was left. pity of giving it that stamp of approval or pushing it to one side. imf hadould say is the said to themselves that china is making the reforms necessary and taking all the boxes, but we will see if they attach conditions to it later tonight. jon: chilling's worth will stay with us.
at 6/10 of 1% in negative territory. the big news over the weekend is that the eu and turkey have agreed to help capture the refugee crisis including a 3 billion euro assistance package. here's the european council president on the eu turkey deal. cleary set out with a plan for the timely reestablishment of our shared frontier. who also step up our assistance ofsyrian refugees in turkey 3 billion euros. jon: let's get more with our brussels bureau chief. how significant is the eu deal with turkey and an interesting side note in a time where russia and turkey seem to be growing
wider apart the eu and turkey seem to be coming closer together. it seems to be quite significant. because of the refugee crisis turkey's leverages really increased in the past weeks and months. and they really need turkey on board to address these waves of migrants. the plan here is to have them turkey turkey to have deal with them there and therefore the eu is giving them 3 billion euros to help process and house the syrian refugees there. they're also trying to increase the negotiations because one of the things turkey wants is to be included in the eu and these have been going on for more than 10 years in the eu misting they will restart them in september and make progress. jon: some people waking up the
inclusion. let's put reality back on the table. how far away is that prospect? >> the leaders were pretty clear that this was a long-term process. francois hollande came out pretty starkly and said there is no acceleration in the turkey talks. listen to will reopen a new chapter on the economy in december but it is still a long-term process and no one knows anything else about that. jon: our brussels bureau chief, thank you for joining us. a time when people were to get a little more constructive about turkey the two countries pull apart. more fresh sanctions from russia onto turkey. does it change review at this point? >> not particularly.
we lowest taken the view that russia's problems are longer term. they need to convince investors there is a form of legality there that will encourage investments from the turkish point of view there is that same area that is very interesting. itself ismarket difficult to invest in. any move toward a closer relationship with the eu is good and is your correspondent said, any negotiation is 10 years plus. >> overall it is not bad news for the eu. if we can establish a border frontier and there is more control over the refugees, i think obviously the germans and the french will be relieved. next, as a run gives investors a glimpse of oil deals worth $30 billion we get a look
movie geeks. sports freaks. x1 from xfinity will change the way you experience tv. it will issue the rights offer in february after it releases the full year results. it is been under pressure to raise fresh capital. it will go forth and do so. john, you know the story, lufthansa has been hit by strikes in recent months but good news for the company today. it reached a pay and retirement agreement with ground crew, technical and cargo work. between lufthansa and others affects 33,000 ground employees and negotiations are continuing.
this led to strikes and more threatened work shortages. this is the stoxx 600 mining index. today is down by 1.2%. it is the worst performing sector of the stock 600 this month down by 8% down by three of the last four months. deteriorating chinese economy in a rising dollar on expectations that the fed will hike rates next month. but the stoxx 600 is up by almost 2%. jon: more on the markets from mark barton throughout the morning but for now let's turn to iran. they've given investors a glimpse of $30 billion in perspective oil deals. now is our editor
kelly goc and. the run projects. will they be enough to attract big oil? what is on offer? certainly hope so. they want about $100 billion to help revive the ailing petrel gas industry but in order to get , it needs tos in give them enough of a reward. tehran in order to come up with ideas for a new oil contract. what has come up with is that the contract will be about 20 years and length. international company's will own part of the production they will be allowed to sell it on the international market. domestically they will be paid
on a per barrel basis. in the past they were paid a fixed fee so it didn't really matter how much they produced there was never an incentive to beat any of their targets. iran is hoping to start tendering for these new oil concessions on the 21st of the new irani and calendar year and they hope by then the sanctions will have been lifted or will about to be lifted. meeting later this week and iran bringing the crude back online and then later in the year even more crude. how do they come to a deal with opec to allow them to do that. and is it just divorced from whatever opec agreed to later this week? >> the last point is the main one stop iran feels they have been cut out of the national
market for so many years that it is the right to try to make up for lost time. he would call for other opec producers to make way for other producers. the saudi's in particular. iran is going to go ahead regardless. in that sense it finds itself in the uncomfortable but unusual position of being in the same boat as saudi arabia. the prices are down to about $44 per barrel. in order to shake up high cost producers there is some evidence that is working but certainly as the market is now expecting that market to come down half a million barrels per day within a week of sanctions being lifted and within six months in extra million. for opec as 30 million barrels per day which is an extra 3% in one market from
opec's production. jon: let's keep the conversation going on oil. bloomberg's energy reporter is a busy man this week. let's start with the irani and assets. can you build a political risk premium into them? we have heard all year about people demanding too much. his one of the reasons the risk premium tilt into those assets? that want you to remember these contracts will be very different to the previous buyback system from the 1990's were the company's were investing any ran for a five to seven year period. new contracts, companies like to tell and shell could be investing in a run for the next 25 years.
companies are going to have to weigh them very carefully. the other question is iran is not the only company approaching international company's for projects. mexico is also in the risk premium of iran and mexico is probably something like this. it will be one of the major factors that companies will be waiting. jon: we have heard about them waiting to go into iran and mexico as well. quality of crude, who wins that one? it's not so much the quality of the crude the quality of the geology. the geology is very easy and oil companies know very well. it is more oil production.
they knew how much oil they needed. that one detail about the geology of the country. gp just tracks its history back to iran. before you entered into the office of the ceo, they still have the geological record. the company's note very well but the oil is there. in terms of the quality of the ideology of a it weighs above everybody else. meeting setc against the backdrop of iran trying to pump more crude. whatever they agree to, you will be there in vienna, doesn't matter to iran? >> no. they will go ahead and increase production. they had a lot that was taken off the market because of the sanctions and that will be coming up. they say they will increase half a million barrels per day. let's not forget that opec has
ways to accommodate this. iraq had for a long time a quota. so they will have a very diplomatic formula to agree to disagree. is going to ben reinforcing the policy of saudi arabian market shares of keeping oil prices down to high cost producers. effectively when the return of iran happens in the next few months, potentially us in his january, iran will be de facto increasing production. societe generale will be the policy on steroids. >> if i told you guys that the crew in the back half of this year would average below $50 per barrel and only one oil major had drastically changed the dividend policy, house price
would you have been? >> i'm not totally surprised that the integrated oil companies will continue to be paying reasonable dividends. you have to bear in mind that these companies do not carry huge debt even at these levels. they have reined in a lot of their predicted expiration and they are forced it all on the subcontractors as well. they can continue to pay the sorts of dividends against the backdrop -- we have to wait and see. jon: this goes to the whole opec meeting. these guys had basic assumptions at the start of the year. the strategy of the oil majors so far, can they continue to play the same strategy in 2016 as well?
>> think the have very few options, but they will have to be a bit more honest with investors. they have been saying we can cut cost and will not jeopardize our future growth and we are to see this cost-cutting and built tightening is having an impact on future growth and the growth targets will have to pare down all stop one thing that really surprised me from the market is you look at the consensus the net income of major oil companies from 2016 is an increase of this year from current oil prices. ison't know how the market expecting that profitability will increase. i think that is probably the next thing that we need. but the market needs to recognize that the first four to six months profits will be flat year on year if not down. jon: the bloomberg opec team
will be busy and we will hear much more from them throughout the week. the chief investment officer will stay with us. we will talk about jpmorgan. just what to get breaking news from sweden. gdp at 0.8% on the third quarter. look at the reaction with the currency. that is a stronger swedish krona. europe down by one third of 1%. bear in mind's is a central bank with extremely conservative interest rates and yet they are still remarkably low with gdp. program, it is about the bonus pool in the year ahead. deutsche bank is cutting and jpmorgan are keeping it as it was. standing still, the new wage increase which we will debate in the couple of minutes. ♪
country and bolstering border controls. meanwhile, russia has announced measures against turkey in response to the downing of one of its jets. down after stepped he was jailed indefinitely. amidst the country's largest corruption probe and renounced his post. estevez has denied the accusations made against him. jpmorgan will leave its bonus pool roughly unchanged since 2014. the buck the trend with european competitors such as deutsche bank which is preparing to cut. for more on that story, mark barton joins us now. look at what jpmorgan is doing and deutsche bank. if you're in the business of
needing a job guess where the cv is going? on them.s put pressure this is not confirmed. leaving itschase is bonus pool roughly unchanged from 2014. it is telling the top managers about the big decision. month,m earlier this desks are preparing. the plan could change depending on their training performance in december. keephe push to at least the pay unchanged bucks the asnd of european competitors you say like deutsche bank preparing to cut payouts. europe's biggest investment bank could cut the bonus pool this year by 500 million euros of almost one third. jon is streamlining the business according to people familiar with the matter.
the second biggest lender's plan to cut by as much as 60% and barclays may not get any bonus this year. times citingunday unidentified sources. jpmorgan is sticking to its global banking model as you say european model scale back businesses and/expenses in the face of higher regulation that makes trading less profitable. the corporate and investment bank and seemed 30% of the division revenue last year. it has remained steady in the last five years during the first nine months of this year moving 2.7% to 20 .7 earlier outpacing a 2% company dropped areawide. puttingamie dimon
pressure on the likes of credit, swiss, and deutsche bank. julian joining us for his final thoughts. mr. klein said the trading floor is not ultimately motivated by money so would you expect that to the change with outcomes are consequences -- outcomes or consequences, that trading will move from one place to another? do you see that happening? guest: i don't think wholesale, but if they don't get a decent bonus, i think back into last week there -- talking to headhunters, actually deutsche is planning to pay up. we shall -- will still see the outcome but we will see the statement made putting pressure on the opposition. pressure on the -- jon: pressure on the sector.
a two quart retreat in s&p 500 earnings about become three. analyst cutting estimates not for the energy sector, but financials. is that really the right response toward the bonus pool? don't you have to deal with the card you have been dealt. we are making money or not in the bonus pool is made up out of that. guest: that is what they should do. historically the haven't always done that. particularly in the investment banking arena. they have sacrificed profits elsewhere. bankers are becoming more and more aware, led by the regulators to a degree on cost and that remuneration that they pay. i think it will be an ongoing discussion. is this -- jon: is this just confirmation as far as you're concerned?
it is almost done and dusted. they cannot compete as far as wages are concerned and they cannot compete on risk as well. if you are adventurous individual and you want to get paid, is it over for europe? that is a big statement at this point. but is that almost complete? guest: i think it is too early to say but you have to weigh up, do you jump ship and find yourself six month later out of a job because the area is not doing well? there is all of that to take on board and we have been through this before. over and thistook is a partly cyclical one. we have regulation to take on everything they have to cut. the cio of rathbone. up next, yellen in front of congress, and u.s. job stay. we will break it down shortly.
same day that fed chair janet yellen with the u.s. economic outlook and switching to friday, payroll and opec. manus cranny of bloomberg tv, and richard jones of bloomberg first word. gentlemen, i have asked this ahead,n before, the week as you see it on that board, which is the biggest event? manus: it will be the data because the fed is data dependent. i listened to the news briefing. the you? -- do you? it will be the payroll. the ecb -- how watch is baked into the cake? the shock would be if they dropped much more than we seem to think. jon: consensus estimates, bloomberg has done the poll and the consensus seems to be -.3%. but there is a change looking for 0.4 under. what is the logic for that? manus: that is the market trying to take his edition.
they have been in terms of the euro and the bond. they're just try to push the envelope, which is what market should do. guest: the only thing were i would slightly contradict you manus, is the positioning of euro-dollar. i think it is a popular trade but i don't think it is heavily populated. i think there are a lot of people in the euro with positioning from good levels, but i don't think we have seen the chasing that we often see when there is a selloff. jon: now, as an entry point of 105 or 106, there is not much upside for the rest of the month. guest: if you are short it could levels, you're comfortable here. you are probably looking to take some off the table and selling strength, going short is a difficult thing to do. manus: the other one is opec. iran comes back. supply coming back into opec is
like saudi on steroids for the oil market. there is a great article on bloomberg.com. threatening. russian economy. this is a risk factor of 2016. where does oil goat and can russia tolerate -- where does oil go to and can russia tolerate a dramatically lower oil price? jon: thank you very much. coming up with francine lacqua on "the polls." payrollek with the ecb, , opec, cop21, and janet yellen speaking as well. what more do you want? i am on twitter. 56 minutes into the session. equity market in europe in the green, for me and the bloomberg team, best of luck for the rest of your day.
francine: 21 kickoff -- local leaders had to paris for climate talks -- should energy investors brace for headaches? jonathan: the war in syria puts turkey and fortis. stemming the flow of refugees well russia slaps on fresh sanctions. francine: and making comeback -- italy's heir is launching a new up after a start 10 year hiatus and we speak to him in an exclusive interview. welcome to "the