tv Trending Business Bloomberg January 7, 2016 9:00pm-10:01pm EST
with the defeat devices would be cheaper than trying to fix them. nd saudi arabia may float ra -- aramco, becoming the most valuable company in the world, eclipsing even apple. this is "trending business." the session about to get under way over in jakarta. let take a look at what is going on. here is david. >> trying to find it's balance, i guess. rst off, it would be good to perhaps give credit where credit is due. the trading day is now officially longer than yesterday. we have gone past 30 minutes, and based on my count, we are going for eight direction changes now for the shanghai composite. 3168 ly up 43 points to
as the level right now. up 1.4%. we were as high as 3% at one point, fell to 2%. can we get the chart up here for the viewers to illustrate how crazy it has been? elsewhere though, obviously other asian markets are taking their cue from what is happening on the chinese mainland. more importantly is what we are seeing across the off shore rim. we are flat toe moment there. let wait for some sort of catalyst. another thing i want to mention is volumes are on the heavier side today. easily more than double in shanghai now that perhaps the circuit breakers aren't in place to restrict trading. what else do we have? the nikkei 225 seeing volumes spike there. hang seng up 90% over the 30-day average. i should also mention that the
volatility index on the way down slightly. it is a developing story. i have had to throw any scripts out a few times. i will be here to update you on what is happening. a crazy market today. >> china's removal of circuit breakers after four days may have stabilized the markets, but that is still leaving investors facing plenty of restricts than a lot of people scratching their heads. here is more on restrictions and panic still. >> take a look at the gyrations we have seen this morning. panic remains. the suspension of circuit breakers may be a constructive step to possibly alleviate the selling pressure. instead of people rushing to exit positions before they get trapped, investors say hey, i can wait a little longer to see if losses go further. but some say it adds more chaos and shows chain is changing the
rules all the time and improvising. what is the policy right now? and yes, there are plenty of restrictions in how investors trade. a 10% daily limit is still in force. so is a t plus one rule, which prevents investors buying and selling shares in the same day. they unveiled some curbs yesterday. but the activity of foreign investors is also limited by quotas. there is still questions of a falling yen. s the economic slow-down deeper than first thought. little change since august. on thursday, the yen was still at a five-year low. sources say the pboc will continue to intervene in the yen despite saying they wouldn't last year. the threshold and circuit breakers are just too low. that is the big concern here.
it has triggered twice in four days. 7% declines are pretty common in china. nicolas brady, former u.s. treasury second, he says china got it wrong. they need to widen the ban, and these halts are triggered too easily in a volatile market like china. as muches a third of hedge fund may now face mandatory liquidation. they are swinging between gains and losses in the chinese markets. still a bit of panic out there. back to you. >> china's market chaos has been felt around the world. wall street took a pummeling thursday. the s&p 500 has now has its worst start of a year. remy, could things finally be looking up whoer? >> it looks like that. i am hesitant to say that we are looking up. but after the past few days of
downs. if you look at future futures, they are saying things are looking up. they are taking a sharp leg higher in the past hour. the dow jones minute eye futures are up by nearly 1%. the s&p and nasdaq also up by 1%. they had been higher, up yards of 200 point for the dow, but you can see they are up by 150 point right now. earlier, the pboc did set that reference rate. no more weakening. investors like stability, but positivity was not the case in wall street's thursday session. it was red, it was ugly, and it was down on the order of 2% to 3%. major markets extending three-month lows. the s&p seeing it's worst yearly start since 1928. it is because of what is happening with china. take a look at this black chart right now on your screen.
that shows trading volume this week on s&p futures. that more than doubled between january 6 and january 7. between 9:00 p.m. we have passed that key hour. that is when they fiction the yen. we are now seeing that leg up in futures. people care more, especially since they have been losing money. a sobering number, $2.5 billion equity. losses in but today maybe we are going to see a turnaround. >> we will see. give us an idea of who is really -- who the main victims were on wall street? i don't think there was any sector which escaped. >> there was a lot of red and blood all over the palace. technologies was the one of the performing sector, down 3%. apple had the biggest impact,
falling by about 4.25%. it is now trading under that $100 mark, for the first time since 2014 after analysts downtraded. u.b.s. cut their estimates for sales. financials were the second worst s&p sector, down by 2.9% for the sector. j.p. morgan and citigroup down % the order of four to five there. energy shares were not the worst performing second tor. it fell more than 5% on thursday. crude oil futures also bouncing. 1.8% up. brent oil up 1.7% up. in thursday's session it did close down about 2%. year to date, west texas has now fallen every single trading day in 2018. looking to loose more than 10%.
its now at its lowest price in a dozen years, trading baylor the $34 mark. we will be looking to see if there is some positivity we hang on to with the u.s. december jobs report. bloomberg's median forecast for that calls for an increase of 200,000. if it tall blow that, maybe more time in the red. china is trading higher right now. we are going to be seeing what happens over the next 24 hours. we will talk to you again sood. >> thanks for that. let's have a look at some of the other stories we are following for you today. let's find out more from julie. >> we are hearing that v.w. may buy back tens of thousands of diesel powered cars in the u.s. in an attempt to placate the regulators. v.w. has concluded it would be
cheaper to repurchase some of it's more than 500,000 vehicles that don't comply with u.s. emission standards rather than fix them. sources have sold bloomberg v.w. could buy back as many as 50,000 course. negotiations between the automaker and the environmental protection agency are there. no agreement has been reached. v.w. shares have tanked in germany since the september admission it had rigged the soft wear of the cars to beat those tests. to singapore, where shares of noble are down almost of% after standard and poor's cut its credit rating to junk. that adds to the list of challenges for noble. it is face ago route of raw material prices, facing critsism of accounting methoding. they have lowered the credit
rating from double b place to triple b minus. it follows a similar move by moody's in december. they the bond dropped to a record low. more bad news for noble group, which saw its share price lose 2/3 of its value last year, making it singapore's worst performer. let's get a check on samsung shares in seoul after it missed profit in the fourth quarter. up by 1% there. demand for samsung's smartphones was sluggish over the three months heading into the busy holiday shopping season. samsung reported a $5 billion operating profit. below what analysts were expecting. global demand is tarting to was not for smartphones, including samsung and i-phones.
that is really pressuring margins at samsung businesses from screens to semiconductorors that supply rivals, including the i phone. >> feeling the squeeze. can samsung really face down the increasing competition coming from the likes of apple and those chinese smartphone makers? we will have a look at that next. later on in the program, more ability.arket
burr on the other hand, it is not a huge surprise, is it? >> not a huge surprise. the company guided pretty strongly over the last month or so that earnings were going to be a miss. i think this number was roughly in line with recent expectations. we don't really have a real detailed break down by the company yet, but we think semiconductorors, hand set and display a little bit weaker than we had previously expected partly due to demand being a little bit weaker, and commodity prices being weaker as well. >> to what extent is this down to the global picture rather than being company specific? >> for the semis and display, hat is not company specific. in fact, for semiconductorors,
the company has done well this year. they have actually grown profit a lot this year due to the fourth quarter. prices been -- other have been falling a lot during the year. exe tigers such as micron, their profits had fallen. they had managed to outperform the market significantly through this year due to technology advantage. that is because they went to the next most advanced node over the last is it months. the problem is that is almost done for them. so the cost and price advantage they get from the next generation technology in d-ram, is done. so now they are batting in line with the rest of the market, and that is quite weak for q 4. pricing in particular has been
down quite a lot, and they can't escape from that. i think it is really falling back in line with the rest of the industry for semis at the moment. >> semis is where the company actually is very reliant though? this is where they are making the bulk of their profits? >> yes, it is. i think longer term the picture is actually pretty healthy. if you look at the market share, they have a dominant market share in memory. in d-ram, it is almost 50% market share they have now. that means they pretty much control the market information this type of market, supply and demand drives prices. if you control 70% of supply, you pretty much control pricing too. if they feel they are motte making enough money, they pretty much have that with their old control to be able to do that. so i don't think that things
are going to be things are going to be a disaster in semiconductorors. certainly q-4 is weak. q-1, a seasonally weak quarter, i don't expect it to be strong either. but in the coming year, i think it is going to be just fine for them. maybe note a profit growth like what we have seen over the previous two quarters, but i think small flat issues is what they are aiming for and still possible. >> tell me about this? are they getting this market wrong? they have schmidt in things like school boy errors on the latest ones, getting them up to production and shipping them? >> yes. in hand sets, it is not that great. that is the area they are most worried about, hand sets.
they have many more very, very aggressive competitors, particularly in china. it is a worry for them, it is a worry for us, a worry for investors. they have been losing share and profitablity. i think this last quarter is still very profitable. a little weaker than we thought but still quite profitable. they are having some success now in the mid end with the a line and the e-line. but it still looks like their share is slightly coming down. i think the worry perhaps is long-term. i don't think you are looking at a short-term collapse in hand sets. it is long-term. >> i only have 20 seconds with you left. long-term, you are mentioning it here. what are the dangers of samsung
going the way of nokia in the hand set business? >> it is totally different. i don't think it will go anything like nokia because samsung is much, much more diverse. the great majority of profits are coming from components, where they are the market leader and they have a sustainable technology advantage. that is sustainable. the hand set thing could come down further, but i don't think its going to be zero because of the technology they get from component. >> marking, thank you for joining us. >> the stories making headlines around the world. south korea will mark kim's bid . soul says will broadcast music and propaganda. sanctions and other penalties have failed to bring north korea to any meaningful talks. the mixture of blads and raps
known as k-pop irritates them. the war of words between iran nd saudi arabia is heating up. iran set the building? sana said it had been deliberately targeted. weapons say there was no damage to the building. suspended futbol boss, michelle platini says he has abandoned his run for president of fifa. he is focused on fighting his pan. he and sepp blatter are being investigated for a $2 million cash appointment to platini without a formal contract. both deny any wrongdoing. >> yes, effectively i am going to with cause from the fifa presidency. the timing is not good for me. i don't have the means to fight on equal terms with the other candidates. i have not been given the
airlines upgrade their fleets in the face of surging travel demands. >> a 10% cut in this year's operating forecast. this is the operator of that brandt. it saw losses in the u.s. and weak demand in japan and china. operating profit down 17% to the end of november. n the bright side, tennis star kei nishikori has renewed his deal. the deal may be worth $10 million a year. australian shares have lost more than 5% this week amid the market turmoil we have been witnessing. let's go to sydney. paul allen is there. what has been moving the most so far today? it is a bit a turnaround, i think? >> it has been. it has been a very volatile morning. we immediately plunged below 5,000 points at the opening, and when things didn't go as
badly as expected in china, we went back above 5,000 and strongly so. of but now we are back down blow by .4%. as for winners and losers, it has been mixed. energy stocks doing surprisingly well. we have liquefied natural gas up 2.5%. woodside and oil search both purchasing strongly. rio continue to up around 2%, and b.h.p. is flat. gold stocks doing well, although they have now dropped out of the top performers. for the losers, an eclectic bunch. media stokes. a dishonorable mention goes to slater and gordon, once again feeling the pain, off 4%, though nothing to do with what we have been seeing in china. the lawson calling in forensic
accountants to look at their books. they are face ago class action lawsuit. australian dollar faring better than expected largely things to what has been happening with the yuan. broadly, the a.s.x. were spared the worst of what we saw yesterday when shanghai fell 7% and hit the limit at the open. it has been a much better morning. >> thank you for that. that is paul len there -- paul allen there. let's take a look at what is going on as we head to that tokyo lunch break. the nikkei 225 looking like it is going to close out that morning session with a gain of roughly .5%. shanghai deciding which direction it wants to go. 1.8% up. it went down initially and creeping up. that is where we are after four days of deep losses. two of them having their temporarily defunct ciroc
>> top stories. chinese shares rise, then fall and then rise again after they scrap the four-day old experiment. heading higher, fears of a chinese meltdown are fading. volkswagen may buy back tens of thousands of cars. they expect to repurchase around 50,000 vehicles after concluding it would be cheaper
to do so than fix them. they are accused of rigging the software of 500,000 cars to ass emissions tasks. lengthy list of challenges for noble. tokyo just closed out its morning. let's have a look at what is going on. what i can report is a positive day in china. >> that in a second. i am not sure. this is really a story that you really have to track second by second because it is really changing that quickly. at the moment, that is how asia looks. most stocks are higher for the first time in four days. perhaps getting some relief now that we are seeing some gains on the shanghai composite. just to be clear, the exposure
of fournette investors to this market that has been swinging like a crazy man all week, very, very small. we are up 2% there. programs the other catalyst should be c and h. at the moment we are seeing gains. let leave it there at the moment. let me break it down for you, what is happening within the chinese markets. up 2%. several things i want to note. we opened 3% higher, quickly erased all that, phegley 2%, and we are now back up 2%. we are seeing mostly gains across the board. material stocks, resources, chemicals are leading the gains there. we are seeing some stocks actually limit up by 10%. don't get me wrong. if you want to programs put it alongside a win-loss spectrum or distribution if you will, a lot of these stocks are on one side, 10% higher limit up. but you still have a few on the
other end of the see-saw. let me show you how that looks on the line chart. it might actually have changed since i started talking. let me update that for you. there is a look at the currency. flat, that will change. c and h dipped blowing. the shanghai composite has changed direction at least 10 times already. the zero line is just about here. that is about a 2% gain as you would expect. that is 3% and that is 2% lower. a swing of about 160 or 170 points. that is quite the move here without the circuit breakers for the first time this year. >> thank you, david. china's removal of circuit breakers after just four days may have stabilized the markets, but investors facing plenty of restrictions. let's have a look at them. it is not without panic out
there. it is not as though people are going everything is great. >> they scrapped the circuit breakers, which made sense, but we heard from alliance, and he says the timing and implementation of the circuit breakers is peculiar. they did realize that the markets in this system had very tight limits, which did more harm than good. among the retail investors, there is a bit of panic. we see mixed signals from china. they are intervening in the currency market despite the fact they said they wouldn't be doing that. they left the rate little changed after cutting by a half%, fixing the most since august. some say the suspension could be a constructive step, at least the most constructive wisconsin seen from the pboc in terms of alleviating the selling pressure. there are still restrictions. still the 10% daily limit on
single stock moves. and the restriction from buying and selling the stock on the same day. and the remove of shares by major stakeholders. the selling limit is up 1%. they lifted that cap versus lifting the ban itself. foreign investors limited by the quotas wisconsin seen on the shanghai/hong kong stock connect. this trading halt adds more chaos. are they just improvising right now? >> that is what some people are suggesting. the person who invented these so-called circuit breakers has been speaking out. >> yes. he has joined the critics saying china got it wrong. this is nicolas brady, the former u.s. treasury secretary. he created this in 1987. this is what he said about china --
for example, the s&p 500 has temporary trading halts when it is 7% and 13% and only suspend trade for the rest of the day when it is a 20% gain or loss. that needs to be one big factor here when it comes to fine-tuning the market circuit breakers we see in china. if we had them last year, we would have seen 20 trading halts in the last year along. >> incredible. we saw the nikkei 225 close out up this morning. a reverse in sentiment of a global equity route. they are trading 210 points in the green. it is all meaning this uncertainty is coming through at the moment. what does it mean when it comes to the economic reality?
how does the stock market reflect what is actually happening on the ground? the person who may know that answer is our asian correspondent. enda, a tall order to fill us in on this one? >> let me tell you what people say. they say that there is quite a disconnect between chinese markets and the undereconomy, that they are zast cousins at best. we had a stock market route at wiped out $5 trillion and change. individual million stock market investors in china, in a country of 1.4 billion. the negative wealth effect is a bit more contained than probably people appreciate. a stock market crash would have
a big impact on the real economy. not as much in china. >> you may say that, was there ever a connection between what the real economy and what is going on in the stock market? some say the stock market is looking ahead perhaps to the next year or something like that. we have that in mind, and a lot of people talk about that. we had someone in from investment management, and we shouldn't be looking at what is going on with the stock market, but we should be looking at what is happening with orb. >> this is what is tryinging the capital outflows. we have seen the burn rate on the reserves. yesterday they fell by a record in december. there are other factors driving own the currency reserves, but undoubtedly, the weakening the yuan and offsetting money leaving the country. it is not good for china.
then there is a spill-over affect into the regional trading partners that may trigger competitive devaluation. it may trigger wider ramifications for world trade. the one to watch in terms of impact is the yuan. that is the bigger issue. >> the thing is how does this all then -- this is the first time we have really seen an equity route in china really have a huge effect globally. we have seen it take place before, but does this mean that we are getting a chinese economy that is getting more and more ingrained in the global system, or are people worrying about their individual prisons as women? >> goldman sachs said last year was the first year china did impact on the global market. people saying what is happening in the first week of the year
may be enough to keep china on hold longer than people anticipate. look at the underlying economy. the route we have had on the chinese market is six months old. under the bonnet. retail sales holding up. housing prices stabilizing. there are indications that china's economy is at least stabilizing at the margin. i am not talking bullish reversal turned or v-shaped recovery. but it is doing that with the markets doing what it has for months. >> you get this divorced area between what is going on with the markets and what is happening on the ground itself here. what do we know now about the state of play when it comes to the chinese economy? e had 6 .9% growth or whatever
it was. >> 6.9%. >> when do we get the new growth total? >> we get that next week or the week after. we have the n.p.c. numbers coming up in march. goldman sachs is expecting an uptick for figures like industrial output and credit. >> will they hit the 7% target? >> they will be lucky too. one to watch will be the opening in new york in china. >> that is this weekend. >> if that kicks off well, that shows you how the china consumer is doing despite what is happening on the stock market. the "star wars" franchise isn't as strong in china. if it is better than people anticipate, it shows you confidence is there and consumers are willing to spend money. >> thank you. before the markets open today, we had a chat with bill gross, d he told us at wloorg there
could be much worse to come. the global markets are interlinked, and he had a gloomy view on how chinese markets would start off trading today, and he was wrong. >> it is a highly levered world, and when something gets out of whack like the chinese corled or oil price, then you see these movements everywhere. in a highly left-hand world, do you see any sense of an immediate catharsis to clear markets, or is the theme for 2016 that can he slog along with this rolling pain in search of an bankrupt move to clear markets? >> well, you know, china announced this morning that they are going to let markets sleer as they haven't in the past. >> bill, what will we see out of australia and into china tomorrow? they are going to go longer than seven or 12 minutes.
what would you predict we will observe? >> well, based upon the e.t.f. in the united states, china is predicted to be down 5% or 6%. it depends upon whether the chinese are good to their word in terms of letting markets clear. they haven't, and to the extent that it goes down more than 5% or of%, who knows? but china is an artificial market. all global markets are artifically based. the fact that we have a catharsis, it is banks giving up in terms of what they do. i dope think that is going to happen. >> bill gross there talking to our very own tom keene. >> let's check on some of the stories making headlines. saudi arabia considering its own wig bang. it is considering selling a stake in its state-owned oil company, aramco, controlling more and 10th of the global oil market. it would likely top apple as
the largest listed company in the world. the crown prince said a listing would help promote transparency and counter corruption. a decision is expected in the next few months. major league baseball is launching a major push into china, signing a three-year deal to live stream games. they will have exclusive rights mccao. kong, china and baseball wants to cultivate new markets and delivering games digitally. apple's five expect tiffs all earned about $25 million last ear except for the top himself. tim cook took home a mere $10 million including bonuses. they exceeded sales and profits.
volkswagen boss is to meet u.s. environmental regulators next week to discuss the fall-out from the emissions scandal. v.w. asked for the meeting after the justice department filed a lawsuit that could result in finals of tens of billions of dollars. it emerged that millions of v.w. diesel vehicles were fitted with defeat device toss beat emissions tests. a group of american assault miners, stuck hundreds of meters underground have been breakout up. rescue teams were in contact with miners throughout the or deal and said they were never in danger. the assault -- the salt mine is said to be the deepest in the western hemisphere. >> noble having a tough time of it. it is plunging nearly of% at the moment. what is it down to?
standard and poor's have been looking at it and decided to cut its rating to junk. our correspondent joins us. it seems like trouble comes in threes, and it certainly has in the case here for noble. >> exactly. the seemingly endless woes for noble. noble's outlook, at a seven-year low, at one point falling more than 10% this morning, now at about 6%. investors rea littling to the downgrade by s&p to junk. this is the second downgrade. moody's made its cut in late december. s&p said the issue really is about liquidity or short-term financing. it is notice longer strong enough to sustain investment grade. the rating coming at a difficult time, already reeling from the commodities slump. oil prices at a 12-year low. it by the turmoil in the china
arket and a looking at noble's accounting methods. take a look. noble shares down about 18% so far this week. last year, it was the worst performer on the s.t.i. it lost almost 2/3 of its value. one strategist said judging from the negative outlook for commodities, investors are not apt mystic about the stock. noble says the ratings cut will not have any material impact on its operations. it will continue to work with all rating agencies. >> do these clouds have any silver lining for the company? >> well it is talks about its credit worthiness. some of the markets say if noble manages to weather the liquidity issues over the next
is it months, the company should be fine. the thing really is this. challenges remain for noble. the down grade will test noble's ability to restore investor confidence. the c.e.o. has to alay any concern that could limit noble's access to short term credit from other commodity houses. it needs that credit for its traiting operations. no end in site just yet for noble. >> thank you for that. she joins de fratus singapore. a day of volatile equities. we have seen ups and downs from the shanghai open. we have the indian open coming up in about an hour's time from now. against this back drop, we saw mumbai stocks dropping to nine moth lows. we are going to be heading to the indian financial capital and looking at the day ahead. this is "trending business."
>> we are counting down to the start of the trading day in india. we had the turmoil in china on thursday hitting all markets, indian markets were not excluded. they went down to 19-month lows. let's go through all this. who are the biggest losers? what are people telling you today? what do we about expect? >> int to start by giving you a sense of what it has been up to. it has hat a very volatile morning. yesterday wet the marketing continue to bleed in late trade after the devaluation we saw after the chinese yuan. the markets in china spooking stock markets across the world. in mid day i day tradingle.
the benchmark was down 445 points. the nifty was down 143 points. the trading on china's equity markets was suspended yesterday after you had the shanghai composite that dropped 7%. the world bank yesterday lowered its global economic growth fast for 2016 to 2.9%. because of all this, established performance from one of the emerging market economies played out back home here in india. you autopsy had pressure that came in as far as crude prices went. crude prices which have resumed parity between w.t.i. and brent, has put pressure on the currency as well as commodity currencies across the world. terms of stock losers, tara motors was down 6% yesterday. it gets a most of its revenues
largest r, and the mark is china. in 2015, the broader markets outperformed the benchmark, but starting 2016 that is not a trend that has stayed on. back to you. >> thank you. let's move to more on the markets. looking at it from a social media perspective. we have juliette. i suppose that went quite crazy yesterday and today as well. >> absolutely. a lot of anger out there. there are 200 million active stock accounts in china. a lot of retail investors are new to the market and a little naive about how the stock market works. we have had so much intervention from the pboc and regulators, there is a lot of anger when things don't go the way investors want. if we have a lock at some of those reactions on weibo, user
being angry about this crash. they are saying that the regulators should be standing up to take responsibility. other user along a similar vain. don't the regulators need to give an explanation to the investors. >> it is a feeling you get that some of the retail investors who got involved were thinking about this being a one-way bat. >> yes. they thought the stocks would continually go up. people are being upset, but we have to remember that it is people's savings they are investing. if we have a look at twitter. there has been a bit more balance in the sense we know that markets can go up and down. this person tweeting this -- thank you very much. this is the picture. this is the trading position for hong kong and shanghai.
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>> from our studios in new york, this is "charlie rose." charley: samuel l. jackson is here, the highest grossing actor of all time with $10 billion in worldwide ticket sales. his newest film "the hateful eight" is the sixth collaboration with quentin tarantino. tarantino has said jackson is one of the greatest actors to ever say my dialogue. here is the trailer for the hateful eight. >> what makes a man brave a