tv Trending Business Bloomberg January 13, 2016 9:00pm-10:01pm EST
the shanghai composite is trading beneath its august closing low. oil is in rare territory. below has dipped to back $30. 10 years. in nearly prices are under pressure from u.s. stockpiles. the weather warning. progress camec with a leaping pollution. that will increase the effects of global warming. let us know what you think of the top stories. don't forget to include the #trending business emily: you the bears are back. juliet has the latest on this market meltdown.
juliet: we are seeing increasing pressure coming through on the shanghai composite. not quite the selloff that we saw on the open. we do see the markets trading at these levels. down 20% from those december highs. once we had seen that government intervention coming through. we are seeing the market well below those closing levels. here in hong kong the hang seng is also down. quite a lot of selling pressure. these oil players are down sharply. japan having an absolute shocker. we do have have a downbeat sentiment. today the sellers are coming back as we start to see the yen strengthened.
only two stocks on the nikkei are in positive territory. sumitomo coming through with a $77 million deal that is hurt its earnings. australia's market down by 1.6%. i want to show you the hong kong dollar. it has actually fallen to its lowest level since march 2015. the big spike we had coming through the last 10 minutes. you can see what we are back to those levels here. a lot going on the markets. i will have more in about half an hour. let's focus on china and turn to heidi. haidi:
know in the being a market regulator in china this year or last year. they are very closely monitoring any activity. focusing on block sales in particular. this is just the latest stepping up in a number of regulations that are happening and have been put in place. as well as shorting in the chinese market. entire route was suspended from trading. shareholders and companies will have to give them 15 days notice. any sales will be capped at 1%. see what if any policy response comes out of today's market
bloodbath. these renewed lows. we are down 20% in december. there are a number of analysts out there are still saying the market is overvalued. the man who called the rise and then the crash in the summer of last year. even the most beaten-down chip stocks in china are still too expensive. often referred to as china's nasdaq. is still up 51% compared to where it was two years ago. valuation wise it is three times as expensive as shanghai. trading at about 33 times earnings. he is saying a lot more semi-needs to go on. the problem is people were expecting management of a number of these companies to sell their
stakes as those restrictions come down. they are speculating that respect. the market might just run as we see today. he is the really gone off china tech stocks. why at these names your portfolio unless valuations need to come down quite a lot. lining ise silver that about half of the stocks trading on the shanghai are technically oversold at the moment. but given what we are seeing out doesn't tell us we're going to see a rebound for those 533 oversold stocks anytime soon. sherry: we do want your opinions.
japanese stocks are down around 4% today. the biggest drop since september. erasing all of yesterday's gains. let's bring in and out to talk about this. is it oil, is at the end? a lot of people are saying it is oil. oil cost is a good thing. is more sentiment than anything else. the drop that we saw in new york was quite substantial given that there wasn't any real news out there to bring the markets down. oil fell again. it was the catalyst for the drop yesterday. we saw about 2.5% decline in new york. in tokyo that is a most double now. because of what they saw in new york they are bringing into tokyo the bearish sentiment.
the biggest of finders are the commodity related stocks. we have the stronger yen which is affected exporters. sherry: are there any hopes that things could stabilize anytime soon? oil being lower should be good for japanese corporations who import to their oil. if people can start to look to fundamentals instead of looking at the global risks and scenario then things look pretty good for japan.
what is happening right now is a lot of migratory trade. hedging with the yen as well. taking a step back and looking to see. if they see that things have just gone way beyond the fundamentals they might start buying them. sherry: let's take a look at some of the other stories we are watching today. job cuts in the banking sector. yvonne: goldman sachs may be cutting 5% of its fixed income unit. it will make its decision after evaluating client activity during the. of time. they may have to cut 5% of staff.
the unit by refraining .rom replacing those who quit goldman sachs has stuck by those operations to boost market share. rival banks increasingly acknowledge that the fixed income trading revenue just isn't bouncing back. sinceg by more than half 2009. stiffer capital requirements have prompted deutsche bank and morgan stanley to cut staff in recent months. .et's talk about samsung surging insole this morning. reversing those gains now. it was rising earlier on the taking aof publicists stake in the company. considering a bid for a controlling stake. it would make it the single largest shareholder.
will probably see samsung group keep a significant holding in the company. it had a market value of $1.9 billion before today's trading. it owns leo burnett and saatchi & saatchi. gopro was free falling in extended trade. christmas sales were disappointing. 7% of its cutting workforce. a dramatic shift in fortunes for this company. analysts are concerned the company is just a one trick pony . the stock fell 72% last year. people may be starting to rely
more on their smartphones to record and share their outdoor adventures instead of spending 200 to 400 bucks for a gopro camera. gopro is now looking to generate revenues from extreme sports enthusiasts. it could be on apples lists of potential acquisition targets but some say at this point they are not sure who would buy gopro . ahead, a means pollution in southeast asia. which countries of the worst culprits? coming up next, oil is on the slippery slide and we will asked societe generale with the outlook is. trending business is back in two minutes. ♪
we have seen brent and to wti dipping below the $30 mark. $29 and $.92 for a barrel. down below the $30 mark per barrel again today. our next guest has just made significant downgrades to his oil forecasts. commodities research for societe generale. cut yourising that you price forecast. where do you see it going? we see a $20 a barrel ark?
mark: we have cut our forecast significantly. there are presented by the $10 premium to the this time of year. we don't think we will fall all the way to $20 a barrel. one area of potential weakness in the short term for oil that could provide quite an interesting entry point for those looking to gain exposure to these low prices might come on friday following the announcements of the deputy foreign in around saying that he iaea will the
formally announce that the iran has met all its obligations under the july agreement. we could get a bit of a knee-jerk reaction down on that news. it could be an entry point. what we are advising our clients to do. to concentrate exposure further down the curve. to buy the december 2016 wti contract. we recommend buying that at levels below $40. it is currently around $37 at that level. you are offsetting many of the concerns about the steepness of the forward curve. you are in the second half of the year where we will see some meaningful signs of the u.s. production of shale rebalancing.
sherry: is that your strategy? what could prompt a rebound in oil prices? mark: is very difficult to see anything for the first half of this year. i think we are starting to see quite meaningful signs in the u.s. of shale production now tier 2 less tea productive wells. as we move into the second half of this year we will start getting more demonstrable declines in this shale production. that time, i to think will be very difficult to .ee anything short-term the only real upside risk is the good potential geopolitical risk that you always have in the oil markets.
elevated at these very low numbers. it is a story of using this first half of the year two pick entry points. down thects further curve were playing it in other asset classes. equities make a lot of sense. sector is0 energy but oil which is huge is down 19%. so does afford a degree of protection. i societe generale we have developed some interesting products that allow people to switch back and forth between equities and oil to try to offset some of these issues as we move through the year. sherry: to see any see there doesn't oil have to be significantly more expensive than what it is right now?
if you come into the which is around $37 entering into that market at these levels we think makes sense. forecasts for the q4 average of around $48 there is about $10 of upside in excess of the forward curve that could be monetized. by investments at that level. you are absolutely right. it is very difficult to do anything. the challenge really lies in trying to pick points on the pullrd curve where you can forecast compelling enough to offset the steepness of the curve. sherry: what about gold? we could play gold weakness through silver. explain that.
mark: we are bearish on gold. we have been bearish on it for a few years now. the thing with gold is that it behaving as many people expected to in terms of its safe haven appeal. we expected to average a thousand dollars an ounce this year. moving down to around $955 in the fourth quarter. not huge degree of movement. is market that we see silver. also being a precious metal. a much more volatile metal than gold. by playing that from a short perspective. through the use of options. we might expect to see later in the profilelowing of interest rate hikes from the fed that we expect. for that to move significantly
lower than gold. silver has a degree of alignment with copper is also suffering very weak because of all the chinese related concerns. the two markets that silver really clings onto from the precious metals side gold and from the industrial metals side copper both are very weak. .he etf holdings sherry: we'll have to leave it at that. thank you so much for joining us. 10 u.s. soldiers -- sailors who were did change after their boats strayed into iranian waters have been released. mechanical problems forced them to land on an iranian island. tehran later said it was clear the landing was unintentional and they were freed. the incident came as washington debates lifting the sanctions.
to befrica is expected declared free of ebola today. the yuan welcomed the news that warrant future outbreaks are inevitable. it warned the world not to drop its guard. the fee for secretary-general has been sacked. he was a really suspended as part of the widening corruption inquiry. his dismissal takes effect immediately. another senior official has appeared in court in the u.s.. the former head of american and caribbean football was accused of accepting bribes for lucrative contracts. sherry: coming up, qualcomm teams up with another company to create a joint venture in singapore. ♪
the world's biggest chipmaker qualcomm is teaming up for a new joint venture in singapore. edwin: we've seen a recent wave of chipmaker con solvation. to save on costs. as chipmaking becomes more expensive. it is also about research and development. a next-generation of integrated chip solutions for smartphones. tdk will have a substantial market share.
devices beyond the smart phone that will require connection everything from robots to cars and drones. the potential market is huge. we have seen overnight a dip in shares of rival chip suppliers. such as sky works. in the longer term analysts see demand strengthening because as you see it becomes more advanced needccelerates we will more sophisticated chips for people to transfer all of this wireless data into. the joint venture will be based in singapore.
to depreciate with no sign of a pickup in the economy. fallen totokyo have their lowest levels since september. oil exporters and machinery 33cks led declines among the industry groups all of which fell. volume is 24% above the 30 day average. this asian benchmark is that a three-year low. oil is under pressure again as u.s. crude stockpiles expanded and iran moved closer to lifting the sanctions. has followed to wti into rarely seen territory falling below $30 a barrel for nearly 12time in years. sanctions against tehran may be listed as early as monday. yet more oil into a glutted market. breaking out of south korea.
thebank of korea says economy is expected to grow only 3% this year compared to a previous forecast of 3.2% growth. the bank of korea just lowering their growth forecast. to rise justpected 1.4% in 2016. compared to a previous forecast of 1.7%. all of this coming after the bank of korea left its rate unchanged this morning. juliet: it has been a volatile session as you'd expect nothing less from the shanghai composite. we are currently holding about the 2900 level. suddenly that big jet on the we saw those closing
levels of august. the intraday level is now back to levels we haven't seen since december 2014. in terms of december last year. the market down from those highs. if we close at these levels we will be poised to enter that bear market territory. the hong kong dollar has fallen to its lowest level today. since march. that is having quite a big impact on the hong kong hang seng index. which essentially trading at its lowest level since june 2013. you mentioned japan really leading the region lower today. a lot of weakness coming through after that first gain that we saw of the nikkei. those gains very quickly erased as we started to see the yen starting to strengthen. sumitomo has been one of the worst performers down more than 6%. australia also coming under pressure coming down 1.5% today.
korea down by 1.1%. bank of korea leaving interest rates unchanged. here is where you are making some money. kia motors is up more than 2%. sherry: the yuan is declining. the pboc has increased its cash injections. robin: this market is getting more stilted more disconnected from reality. as the days go by. the 10 year bond yield is up because more people are. sorry the bond yield is down
because people feel there is nothing to buy. stocks are down to levels that haven't been seen since the crisis of last year. so that is happening. is going down where it had been going up for the past few days. people don't really know what is going on. they are running for safety at the moment buying bonds so that they know that their money is safe at least for now. another disconnect is really disconcerting. policy statements are coming out and the actions are very disconnected from that. short-term, they want to calm some of the volatility of the market. they believe they have achieved parity between the onshore and the offshore yuan rates. .rtificial parity
as soon as the pboc stops intervening in the offshore market the offshore yuan tanks. they can't carry this on for much longer. they have a limited amount of money and you just can't keep artificially propping up the market and then sitting back and saying this is done because then the market falls again. is beginning to seem more and more like policy on the run. by that as the days go ok this is happening and now this is happening we would do that. there doesn't seem to be a well thought out strategy and that is making things extremely unstable. very uncomfortable for investors.
sherry: yvonne has been looking at the reactions to all this on social media. a lot of mixed reactions from investors. a lot of people talking about this and saying let's put things in perspective here when the eu devalues its currency that is equal to stimulus when the u.s. that stimulusall when japan does it they call it stimulus. but when china devalues its currency it is called manipulation. some people are saying about this bloodbath that the misery deepens. china stocks have opened the sellers floodgates.
a lot of people thought about this 3000 psychological line in the sand. about if heng continues to see it fallen of the thousand points. it would have zero impact on him mixed reaction today but still a bit of panic out there on the social media world. sherry: the australian market also tumbling. adam: amongst all this turmoil
we have been keen to highlight for our readers and viewers the dividend in australia is now topping all of the us markets. in australia you're getting about 5.5% for a dividend yield. that compares to about 3% on a global basis and only about two and a half percent on the s&p 500. it is a real key market metrics there. those the kind of things that investors are looking at. those longer-term investors that can ride out this volatility and still keep in mind the long-term factors that will get them back on track. sherry: when we are talking about yields which sectors are we talking about? the biggest sector there was comes to mind as a yield play in australia is the banking sector. with prices having come off a lot.
with the route we have been seeing. valuations now the bank stocks are below their ten-year average on the forward basis. in combination with the dividend yields which are upwards of eight to nine to 10%. if you are a local investor you also get a credit on top of that. of around 10% mark is looking very very attractive. sherry: the slump in nickel has forced sumitomo corporation to withdraw its four-year forecast. the trading house has booked a $650 million charge on its project in madagascar. year low.s a 12 sumitomo was expecting net income of almost $2 billion. issue new earnings guidance and has warned of further impairment.
the brother of one of the passengers is suing the carrier in the u.s.. nearlyeeking damages of $160,000. the maximum allowed under the montreal convention. disappeared in 2014 with 239 people on board. malaysia's department of civil aviation has declared it an accident. it soldchnologies says more electric vehicles in china than expected last year. sales exceeded the target by at least 5%. sold in of all cars china were electric powered. they closed 3% lower in new york. apple is looking at some potentially good news. smart phones that don't use the android system are proving very popular. about 24.3 million
non-android phones were shipped in china in the last quarter. this means microsoft phones made byalso phones local chinese systems that have their own operating systems. a rise of about through the 3%. mostly made up of iphones. that is obviously good news for apple. there is a concern about the slowing demand for smartphones in the world. numbersook at idc smartphone shipments are expected to grow about 1% in 2015. and beforeit was 20% that 64 percent. so that is quite a dramatic slowdown. china increasingly important to apple. manufacturers as well. for apple they are seeing china as a key area of growth. about 28 stores there now. they're planning to increase at that to 40 by the middle of this
year. they sold 13 million iphones in that month alone. after years of very fast growth china is showing some signs of a slowdown but still very very fast growth compared to other places. for a company like apple it looks like from the numbers we are seeing that it would like to increase its market share in an increasingly challenging environment. sherry: the smart phone market is just so crowded. coming up next, southeast asia's pollution problem is growing faster than anywhere else in the world. we will find out why after this
the prime minister's office says several members of the group have been arrested. 13 people were killed in the attack on the base near the pakistan border including seven soldiers. between india and pakistan are due to resume soon. chinese state media say for workers have been killed in explosion at a machinery factory on the outskirts of shanghai. two other men were recorded injured in the blast in an industrial park. it is unclear what caused the explosion although the workers were said to be using chemical equipment at the time.
they have had a string of lethal industrial accidents. up in drovesning for a chance at riches as the powerball jackpot reaches $1.5 billion. it could go higher as ticket sales increase. the lucky winner can take the prize in installments or in a lump sum. get a chunk ofso it. federal taxes will reduce that payouts to only $560 million. smog has returned to shanghai. city authorities have warned young people and the elderly to stay indoors today and avoid strenuous exercise because of heavy pollution. the u.s. embassy says readings of pm two point five particular it's a 200 and 16 at 8:00 this veryng, and deemed unhealthy. that is nearly nine times above the internationally accepted safe level. we are not just talking about
china right now. southeast asia has a pollution problem and it is growing faster than anywhere else in the world. according to the asian development bank. from 19922010 the region led the world in pollution growth as it went through an economic boom. .et's bring in bloomberg news enda: we talk about china as a leading polluter. if you step back you might say that makes sense because it was a very fast-growing economy at the time. it is a region that depends on burning dirty coal for most of its energy usage and shows you the pace of increase is at an
alarming rate. it is triggering warnings the need to be acted on. the economic consequences could be quite bad. could be detrimental whether we are talking about i hear 11% of gdp of southeast asia. if it continues at this pace. be obvious impact will through freak weather occurrences and changing weather patterns. the impact that would have on food prices and food production in a part of the world where food prices have a big impact on inflation. you can be talking about floods and all the damage that they cause. extreme weather events are associated with climate change. is much more than just an academic argument. it is a warning that this could have a real economic impact if these member nations don't tackle their emissions. we're always talking about china with pollution but
the japanese and nikkei is also down at more than three and half percent. the japanese stocks failed to sustain that rebound that we saw yesterday with the currency. the moment. down 1.8%. we see stocks just falling across the board. club and shanghai investment club also links to america's roosevelt family has found a way to navigate the market. stephen: it is easy to see the rise of modern china. in previous centuries east-west business thrived. even today one of america's most recognizable.
the private club the house of roosevelt's run by the great-grandson of the 26th president of the united states theodore roosevelt. he and his cousin franklin roosevelt look over the premises. since the days of the roosevelt's united states and china have had a good relationship. roosevelt negotiated the russo japanese war in 1905. an freckle roosevelt was allied with china against japan in world war ii. private equity funds. invested in chinese telecoms and other companies here. and it now focuses on the china consumption story. incomeeve in disposable will increase. the spending power of the
sherry: we are also counting down to the opening in india. it will be watching tech giant infosys which is just moments away from announcing its third-quarter results. that's get the latest from our correspondent in mumbai. >> infosys will report dollar revenue and it is expected to be little changed in december. one thing that we watched out for was if it under promises and over delivers. that his happened previously. has raised its dollar revenue forecast three months ago. it got its dollar guidance to be in the range of 6.4 to 8.4.
management that its has started taking measures to dislodge deals for at least $1.5 to help record a better fourth quarter, some believe infosys will actually grow it faster than the current estimate. december is a down quarter for many companies. on what itent's view expects projects that have been temporarily shut will resume and what kind of climate it expects for this fiscal year. it will be important to watch for. has said is aggressively pushing forward as far as focusing on next year's technologies. iss is especially true when aggressively chasing after a digital focus and transformation on most office contracts. that is it for trending
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>> from our studios in new york city, charlie rose. charlie rose: we're live this evening. president barack obama delivered his final state of the union address. tonight was less about the past than the future. president obama: let's talk about the future. four big questions. regardless of who the next president is. who controls congress. how do we givery