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tv   Trending Business  Bloomberg  January 19, 2016 9:00pm-10:01pm EST

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suggesting global pessimism as the imf cuts forecast for growth. and political leaders deciding whether to stick with china or move closer to the united states. follow me on twitter. jakarta session is getting underway. we will have a look. decidedly pessimistic. any change? we had relief yesterday but could not hold on to the gains. we are decidedly in the red. asx extending losses .6% lower. new zealand the only market in the green so far. singapore is the worst of the lot. 1.5%.
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it was up 9% yesterday, the only day of gains. the pain continues for the beleaguered commodity-trading hub. nikkei are looking oversold, but selling continues. as long as the oil story continues to play out on the downside, there is no indication that the selloff in equities will not continue. byg kong extending losses .4%. across the region, we are seeing oil refiners and coal companies, the same energies space, seeing the steepest losses. .1%, one of the top performers in the region. it was driving the rally yesterday.
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expectations were for more support coming through from china. that is certainly not enough to see that into a second day. a quick look in terms of currencies and oil. boc set the strongest for january 6, but we are seeing a little downside. where are we seeing gains? in gold. accelerating in terms of risk. take a look at the yen. 117.25. that was weighing on a japanese exports and tech stocks. rish? rishaad: breaking news, another bit of china data. investment, 86.5
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billion yuan. odi up 6.1% year on year. it is actually a fall in yuan terms. fdi down by 5.8%. a gloomy outlook for the global imfomy reinforced by the forecast. updates and researchers were negative. this one was too. david: this is a quarterly update and nothing new. you do not need to look further than the bond yields.
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second line is the u.s. 10 year yield. expectations have been that the economy is not doing well. is a symptom of what is going on underneath the hood. imflatest update from the reflects revisions on growth stemming from less investment and smaller government budgets across emerging markets. in fact, it is quite clear from this spectrum of the forecast for this year which economies are expected to feel the most pain. ,ay attention to saudi arabia russia, and brazil. one third of the 2013 growth rate. brazil will be hit hard. growth is the best case for
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next year, 2017, at this point. at the moment, i think we should see some hint of growth in brazil, according to the imf, in 2018. forecastsin asia, were largely untouched from the set three months ago. we had a lower revision for the philippines. still outperforming as a group, 6.2%. a small revision from 6.3%. a lot of this is down to what we were talking about yesterday, the chinese economy. the downward adjustment to the slowing appetite for the economy. the cycle has really played out over the past five years from the period when you had boom years of investment, then price wars.
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that eventually makes its way into the state budget and government spending. hopefully, we are nearing the tail end of adjustment to a slow her chinese -- slower chinese gdp. rishaad: vietnam's commonest party is gathering to pick a new team of leaders. let's head over to haslinda. it is a closed door session in hanoi? haslinda: and happening as we speak. for today, it will be a closed door to meeting -- meeting. we will not be sure who will be chosen for the general secretary , one of the most influential positions in vietnam. two men going for it. dung.ave tang
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he wants closer relations with the u.s.. truong, who is conservative, and wants to preserve ties with china. here we are. unsure what the outcome will be, even as delegates choose leadership this week. to be sure, the transition is expected to be smooth and peaceful even though you can expect plenty of infighting. for a's outsiders, it is intriguing. rishaad: has, it will not be plain sailing. haslinda: lots of challenges. including state owned enterprises. many sectors that are all
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mining, banking -- that have been protected by the government for a long time. new leaders will have to privatize quickly. so far, it has a h beenge challenge. it also needs to crack down on corruption and come up with a strategy to meet requirements of a new trade agreement, the tpp. ticboxes really need to be ked. rishaad: thank you for that. other stories we are following for you today. boj facing a conundrum. lower inflation expectations in japan are always a problem, but there is growing talk of central-bank action. sources say the bank of japan is expressing disappointment on annual wage talks. officials making expressions clear. monetarys next week's
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policy decision a closer call. a has publicly says that pay raises have been muted despite being historically tied to job markets. beenes say his concern has echoed by officials as the board prepares for a meeting. boj is considering cutting its inflation forecast and postponing timing for a price target. it would be the third delay in less than a year. hp has cut its iron ore guidance after a disaster in brazil shut down operations. production in the 12 months until june is forecast to come in at 437 million tons. marco has been halted since a , described as the
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country's worst ever environmental disaster. it cut output guidance by 10%. the brazil disaster and commodities rout have dragged bhp shares down. it rebounded yesterday from its lowest close in a decade. today istock falling to its lowest in seven years, announcing it plans to cut production for the first time in nearly two decades. it is trimming output by as much as 5% to cope with a slump in crude. the explorer is starting a shoject this year but will sla
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spending to $9 billion, lowering cap by 10%. the stock has been hit in recent months, down 15% this year after plunging 35% in 2015. rishaad: coming up, taking the plunge. turmoil,ese markets in is this the time to be listing? several companies set to test the waters. more on that after this. ♪
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rishaad: asian stocks resuming declines with energy shares sliding. bilton is head of global strategy at j.p. morgan.
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start. nobody really saw this coming, did they? this has taken everybody by surprise. >> markets have been hit by a lot of things at the same time. there are continued issues with how the people's bank of china is dealing with the renminbi peg s. --re is nothing brown new brand-new that we found out. weakness of energy from excessive supply, concern over growth. some of the data coming out of europe and the u.s. steady, but not particularly inspiring, creating global indigestion of risk. we are seen first order effects of weakness in oil hitting commodity producing nations.
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we have yet to see the second order effects, boost to consumers. rishaad: we would have thought we would see that in the u.s. by now. the u.s. consumer is keeping the global economy trundling along. theolks do not change amount of oil they buy because the price has dropped. you do not switch the prius for an suv. but the amount of money you are spending filling up is going to fall. miles driven has gone up significantly. global demand running at about 3% growth for crude. this will come through. it is a relatively slow burn. it will improve between three and eight quarters after the initial drop in oil prices. it should come during 2016 but will take a little while. the fed is tightening.
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we do not expect any hikes this year. but this has effectively taken --y and easing mechanic him mechanism. >> the 2008 prime mortgage rate went up three basis points. this is why the dollar had risen as far as it had. is it frightening? absolutely. financial conditions are tightening around the globe. but we are still operating in a relatively loose environment. what we are seeing in the equities market is not unusual relative to history. they tend to have bouts of indigestion. but if the fed are raising rates and the domestic u.s. economy cannot handle it -- rishaad: nine months ago, i would have been asking it. whereody wanted to know to get in when it came to chinese equities. but what a difference nine months makes.
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how are you dealing with it? there is a lot of capacity around the chinese equity market. capt a third of the market is available, which is something that china will gradually work through. we are seeing different mechanisms, whether it be , and that or equities is likely to continue to be the main vehicle. to play china because we are looking for a change in the economic footprint towards services. i am thinking about being more cautious about commodity producers and more optimistic about services. rishaad: it is getting crowded, isn't it? i just wanted to get a sense of whether we are over the worst. is this the tip of the risk cycle this quarter? >> what we have right now is
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confidence has been hit hard. it is very difficult to see a market globally roll over when sentiment is shot to pieces. bear markets -- tend to take people by surprise because they are exuberant. ultimately, it is an oil issue. there are fewer and bounces -- in the we can certainly see a continued on sentiment and risk appetite, but we will see signs of growth. and the u.s. is still in midcycle. that should ultimately work as a linchpin on the global economy. rishaad: john, thank you so much. shery: stories making headlines around the world.
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health careama's plan will remain intact through the election. the supreme court refused to hear a constitutional challenge to the affordable care act. bill had beenhe passed with flawed procedures. the court will consider the president's decision to defer deportation to millions of undocumented immigrants. --uling is excited in june expected in june. one of the most famous hotels in the world is badly damaged by fire in paris. it forced the closure of several streets during rush hour. the hotel was a favorite of celebrities such as coco chanel and ernest hemingway. it has been closed for renovations more than three years and was due to reopen the summer. it looks like we cannot say adios to el niño yet.
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cycle activity in the pacific may temporarily slow its to neutralt a return conditions is delayed until the second quarter of the year. it is currently rated as one of the three strongest since 1950 and is blamed for a 20% cut in coffee production, a 10% drop in malaysian palm oil, and reduced rice harvests in thailand. rishaad: growing ambitions. spike ineeing a international subscribers. ♪
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rishaad: this is "trending business."
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of expectations in terms of subscriber growth. a slowdown in the u.s., but y vonne has more. reed hastings has to be optimistic. he says they have just scratched the surface. yvonne: they just announced a big lunch at the start of the year. these numbers reflecting 60 markets. still tremendous growth. 5.6 million subscribers in the fourth quarter. among those, 4 million internationally. that is offputting concerns on the domestic side. u.s. growth, actually disappointing. rishaad: they are getting to a point where, possibly, how do you grow the market? is you have to talk about rising costs. it is not cheap to make
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programs. yvonne: especially for international expansion and bids for global rights for other programming. they need about $5 million in spending for this year. we saw profits fell to $.10 a share. this means it netflix has to keep adding customers at a steady clip to offset the costs. but the growth outside was such a blowout. it seems like investors do not care. we are seeing a shift. numbers were.s. lower, it would send shares down, but they surged after hours. the stock has more than doubled in the past year. rishaad: what about china? they do not have a presence. did mr. hastings have anything to say? yvonne: he said there is no hurry to enter the chinese markets yet. but there are some concerns that, if netflix can produce the
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content to appeal to a diverse audience, whether they can produce local programming to make a difference in a market like china. focus onsays they will new markets, russia, japan, the philippines. local programming, he says they are trying to go after a wealthy, english-speaking audience. rishaad: all right. good timing. let's look at other results. looking at morgan stanley, a good time of it. beating estimates and announcing plans to cut one point dollars in costs. , a bigquarter profit turnaround from last year's $1.6 billion loss. it was driven by gains in equities and advisory revenue. bank of america went the other
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direction, 1.5%. 9%, but not on revenue growth. the bank said it would struggle to increase revenue even if the american economy improved. and cuts fell short of expectations. shares are down 16% this year. the weakest start to a year since the financial crisis. one of the worst in living memory. delta airlines is expecting to save more than $3 billion this year, forecasting fuel prices to drop to a dollars $.20 a gallon in the first quarter. -- $8.20 a gallon in the first quarter. shares closed 3% higher in new
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york. taking alook at bhp bit of a hit. it's iron ore forecast is responsible and made worse after the disaster in brazil. ♪ the only way to get better is to challenge yourself,
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and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around.
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♪ equities resuming declines. oil prices unsettling a nervous market. gains,ave up tuesday's led by oil producers. output.its outcast for the regional benchmarks are falling by 10% this year.
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the biggest offshore oil company is producing just 285 million barrels this year. it is one of the first major producers to confirm and output cut. outlook,ut its growth blaming the commodities slumped and a rising dollar. they say the regional economy will expand 3.4%. estimates for chinese growth at 6.3%. >> markets across the region are in the red, with the exception of new zealand, staying in the money despite inflation missing the mark this morning. we are seen risk sentiment returning. a brief yeah -- rally yesterday. gdp numbers, we were expecting similar support out of beijing.
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we are seeing the steepest losses coming through from nikkei 225, under pressure from yen strength and the oil story. --umber of a gene names energy names facing steepest a kleins. hong kong sitting lower. ,hanghai is down by .2% probably the most modest losses out of the reason -- region. we are seeing declines from southeast asia. singapore down by .7%. energy, oilg related names. , which hassources seen stellar gains over the past few days, is down over 4%, giving back yesterday's rally and coming under pressure because of a downgrade in
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australia. fortescue down 2%. they are expected to come under pressure with china becoming more environmentally aware. they are saying it does not expect an impact on margins, but investors are not buying it. yesterday was the first day we saw any gains. lving that today. and hong kong properties hit record lows in the session. we are seeing a number of developers under pressure. property names under pressure in hong kong, petro china.
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the leading decline or when it comes to tokyo stocks under pressure. we are seeingen, it really ramping up as it looks like a safe haven. up .4%. we are seeing gains when it comes to gold as well. metal.for the precious in contrast, we are seeing exporter currencies coming under pressure. .3%.ussie is off by trading at .68. rishaad: breaking news coming in on your screen in red. the nikkei 225 has declined by 20%. when that happens, that technically means we are in a
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bear market. we will be if we maintain this loss until the close. they just opened for the lunch break. let's get to one of our other top stories. talks are expected to be dominated by a deteriorating outlook for the global economy. we have a water house price survey of the pboc. they are not enamored by their prospects? 's tends to be more optimistic about their own business. when you get a group of them saying they do not see the economy improving over the next bearsths, it really attention. saying, percentage compared to this time last year, there is the breakdown. 23% this year.
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the other thing is when they look at their own businesses. they see more pressure on their topline. that is another thing to consider in 2016. 70% said over regulation is injuring growth. the currency market is one thing that is beyond their control. , some are saying that you do not want to put too much attention on it being outside of your core business. rishaad: it is not looking good. the imf does this every three world andoks at the says, let's downgrade things? david: each time, they need to go back. rishaad: with the exception of china. saw .1% growth.
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but just about everywhere else. because of the drop in markets and oil prices, investment in those energy sectors, they have had to revise the forecast, which is not a surprise. 3.4%. it was at 3.8% in july. 3.6% in the latest one. 3.4% right now. producers,ere oil saudi arabia, russia. asia, looking much better, in fact. india continues to be the bright spot for 2016. , you said 6.3% for china? got you. bhp, stilla look at feeling the impact of the deadly
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dam breach. to really deal with the effects of this disaster. >> that is right. mind of been on the investors is what would the impact be on production from the deadly still we saw in november? we heard from bhp what the impact will be. they have cut guidance for the tons,y 10 million following their joint venture partner who said there would downgrade their own forecast by 10%. impact onense of the production. beyond that, it will be middle of the year before we know how it impacts guidance. today was the first explanation
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from bhp on the impact on total production and final shipments this month. the mining complex has been suspended since the disaster. but they were shipping stockpiles in the operation. are they going to follow rio tinto in cooling supply? >> it is a very consistent picture about those companies. oreralia's largest iron importer yesterday had its own saying itsreport expansion would slow this year. .ame for bhp it has maintained its outlook for the year through july in western australia. it was already forecasting
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slower expansion. that is to be expected. these companies are largely completing a giant expansion project they have been trying to demand.ina's booming they are largely competing -- completing those projects. do not expect that to have much impact on prices. there is plenty of new supply coming to market, whether it is from mines in australia or brazil. rishaad: quickly, david, what do they do to address the commodity price rout? >> aside from the outlook on production, investors will be looking towards the financial event. lots of expectation it will change its dividend policy and announce further cuts to expenditure. rishaad: david, great talking to
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you. david stringer in melbourne. from's transition industrial to consumer economy is overwhelmingly a good thing. malcolm turnbull said the attempt to rebalance would butfit the global economy, not such a good idea for country --d countries. nigroup could be facing a setback. the chairman saying that plans to acquire micron have been challenged by the regulators. and the chances of it happening are slim. he says he wants to cooperate still onon
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breakthroughs in integrated circuits and memory chips. >> everyone knows there are obstacles from u.s. regulators and others. we are still talking about cooperation. we hope to push this forward in a way that benefits both companies. rishaad: not even diamonds are immune to the commodity slump. sources say that the world's biggest producer reduced prices by 7%. rs had about $4.5 billion worth for sale. suppliers have been left with excess stockpiles in china and a credit crunch in the industry. let's talk about china's security regulator approving seven companies to go ahead with an ipo under their new system that kicked off this year. stephen engle, they went back to the drawing board and came back
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with a new set of proposals. stephen: at the beginning of the year, basically. what a time to unleash these as well. , in yearsty regulator past, has pressured companies to try to go to the lower end to protect smaller investors, but that meant prices would go up. a lot of the retail investors we saw last year borrowed heavily on margin. that exacerbated their loss when the market turns south. this new scheme will leave questions about supply more to the market and more to the companies issuing. companies will have more power to set prices. also, the regulators will scrap becauseont payment rule there was a lot of liquidity issues. you had to lock up a lot of
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funds pre-ipo. liquidity was a concern. rishaad: let's go through those companies. the shoe company. stephen: and the publishing company. rishaad: in shanghai. stephen: the eastern pioneer. they are small companies. eastern pioneer driving school. they obviously teach driving and do auto body works. that is in beijing. southern publishing, a traditional and online media company. and top score fashion. go to the website and see all sorts of brands i have never heard of. pioneer has a facebook page. stephen: do you need lessons? [laughter] learn beijing rules.
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it is different. rishaad: thanks a lot for that. the secretive world of the vietnamese communist party being revealed with a transition taking place. more on the leadership change after the break. ♪
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yvonne: donald trump's presidential campaign has won the backing of sarah palin. she joined him in iowa and endorsed his policies. trump said he would consider naming palin to his cabinet. she said she would like to be energy secretary. the coast guard has found the final liferaft from two marine
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helicopters that crashed off hawaii, but no sign of 12 missing crewmembers that failed to return to base last friday following a training mission. no survivors or bodies have been found. four liferaft have been retrieved without indication they have been used. a domestic spy agency has been britain's most diverse employer. 5 was given top mark a survey of 60,000 staff, asked about work plate -- workplace culture and diversity. they have recruited from diverse backgrounds. vietnam is set for the new year with the communist new leaders inck a once in five years political transaction.
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hanoi withus from more. what does this mean for the direction of the country? vietnam is facing a number of major challenges, including continuing to reform its rather inefficient state owned enterprises to, laying the groundwork for new treaties, including the transpacific partnership, as well as continuing to manage its increasingly difficult overionship with china disputed territorial issues in the south china sea. minister isprime considered something of a vying to be the next general secretary. , ish, in vietnam
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considered, at least ostensibly, the most important position in the government. he is competing with the current secretary. he hopes to extend his term. if sang becomes the next secretary, people believe he will become much more aggressive in reaching out to the united states and developing military tries -- ties. trang would be much more cautious moving forward. rishaad: thank you, john boudreau. let's continue this discussion on leadership transition. carl thayer joins us now on webcam. thank you very much for joining us. start, -- that stark,
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the choice between leaders? >> i assume you're talking about the current secretary. choices -- toe continue the secretary-general for another two years, made the prime minister the new secretary-general, or stopped any special consideration and gone to the politburo, who would ordinarily be qualified. they had a three-way choice and could not make it. they just extended the secretary-general while they try to find a candidate. rishaad: which way is it to go, in your opinion? >> it has already gone. they announced the result. the prime minister was not even a starter. he had strong support earlier in the year in the central committee.
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the secretary-general was given up to two years. twoeen now and the next years, if they can finally get consensus, it will mean someone from the politburo who has already served a five-year term. it will be one of the gray figures. all the other top positions have been taken. security, andblic up and coming woman will be the head of the national standing committee. one of the vice ministers has been promoted. saying steadyre as she goes, in essence? >> up to a point. ,he last central committee leadership had a big part in discussions to endorse the transpacific partnership and making it a priority.
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that is a positive sign. vietnam,ean that anyway, was going to deepen relationships with the united states across the board. this will mean a slower defense-security relationship. it means the current secretary-general is well known in china. he would ordinarily promote closer party to party ties. but the chinese have moved their massive oil rig into what vietnam claims is disputed waters. there is another protest going on. it is unclear if this is connected to congress or just china exerting its right to explore the waters it claims. rishaad: professor, thank you for joining us today. this tough on congress in vietnam. coming up, the latest on reliance's third-quarter
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results. ♪
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rishaad: the collapsing oil price has been a boon for producers. it?umbai, how big was bump.assive expected to maintain high margins after strong demand pushing to a seven-year high and better than expected profit jumps in the december quarter. the chief financial officer said as the islamic republic reopens after the lifting of sanctions, it could mean a return of crude
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purchases from iran. in the last few years, iran has been investing heavily in online banking and telecom. onlysts had their eye telecom units. infocom is rolling out the networks biggest 4g with an investment of $1.07 billion. it was due to launch in december. analysts now expect services to be delayed up until april. rishaad: thank you. that is it for this edition of "trending business." stay tuned for "asia edge." angie will join me, as will
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andrew milligan. he will be talking to us in a little over 10 minutes on another day where there is volatility on the markets. ♪ the only way to get better is to challenge yourself,
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and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around.
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charlie: joaquin guzman is one of the world's most famous druglords. for months, the mexican government struggled to locate him. kate del castillo was in contact with him. she arranged a meeting between el chapo, herself, and sean penn. penn wrote a 10,000 word account in "rolling stone" magazine. el chapo was arrested by the


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