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tv   Trending Business  Bloomberg  February 1, 2016 9:00pm-10:01pm EST

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ads have been key to taking over apple as the world's leading company. follow me on twitter. that is my handle. don't forget the hashtag. trading has started in jakarta. we have another half hour to go before tokyo. >> uneventful session in the equity markets right now. we are seeing declines, the down about .5 percent on that index. this is really what we are seeing across every single market. it's not a real rush to the exit. we have indicators of risk. a lot of losses today are down to declines across resources, minors, and energy. whether you are an exploiter --
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and explorer -- whether you are -- expoiter or a minor lorer or a miner. the five year, still below zero, but inching up a little bit. what are we doing? -- .07 theyield, .1 last time i checked. .08. an uptick of three basis points from yesterday. quickly, just to emphasize the point that it is not a rush to the exit, that is the vix for the nikkei, up very slightly, about .1%. we also have one for hong kong.
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let me open that up for you. , 25, 30. that's following the losses yesterday. not a rush to the exit but not a lot of money coming in. back to you. google shares surging in extended trading after sales beat estimates. more online ads and tighter cost controls. cory johnson broke down the numbers for us from san francisco. the fourth quarter results were much anticipated because finally the company was going to open the kimono, show what their other businesses were doing, the weird projects, the moon shots, the self driving cars, all their crazy businesses. the story of the fourth quarter was how good google's core
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business is doing. billion of revenue in the quarter. the web advertising business, the mobile advertising business, the search business, the things we think of when we think of nowle, even the company called alphabet, those numbers were fantastic. a 24% year over year gain in revenue compared to 18% a year ago. advertising for google is getting better and better and the business is increasingly mobile. been a constant for google for the last four or five years. they only fell by 1%, the least decline in two years. it may suggest the switch to mobile is starting to lighten up. lots of profit. lots of free cash flow. a fairly strong fourth quarter for the company we used to call google.
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bloomberg news, cory johnson here in san francisco. rishaad: let's have a look at some of the other stories we are watching for you today. quick sources are telling us that -- >> sources are telling us that the japanese maker is expected to choose between rival bids from the state network of japan and taiwan's foxconn. sharp will announce a direction for restructuring shortly after. said to haveis met with the board at headquarters over the weekend to make his case. deal is leaning toward a incj that would keep the company's technology within
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japan. the discussion could drag on, and there is no sign they will make a decision this week. just asked the labor union to extend pay cuts for an additional year amid operating losses. yahoo! is coming under fire from accused employee, being of gender discrimination and manipulation of a performance evaluation. the employee has filed a lawsuit claiming he and about 600 staff members were unfairly fired in 2014. they claim a manager retooled a numerical ranking system to downgrade their performance. the lawsuit also says the mass terminations occurred without appropriate notice, in violation of state laws. he also says internal promotions were limited to female
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candidates. a spokeswoman defended the performance review process, saying fairness is a guiding principle. effortsmayer is making to cut costs and revitalize growth for the struggling portal. the pan that has been reviewing hasrta is manufacturing -- been reviewing manufacturing -- thees for toccata panel that has been reviewing ta kata's manufacturing practices will release its first report today. no matter how much i recall costs, takatacall
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will be responsible for paying. some recalled vehicles are more than 15 years old. investigations into malaysia's troubled one mdb fund what singaporeth says is a large number of bank accounts involved in money laundering. >> the monetary authority and its commercial affairs department issued a joint statement saying a large number of bank accounts have been seized and implicated impossible money laundering. they say they are continuing to look into financial institutions and interview some individuals. it did not name which individuals they are looking into. they said singapore does not condone the use of its financial system as a refuge. singapore has been investigating money laundering and other financial losses since the
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middle of last year. has been conducting its own investigation into the company. earlier, bloomberg spoke to malaysia's economic planning minister. he spoke about the issue. >> what we decided to do was straw a line and let the conductve authorities respective investigations. we must allow them to do their bet and the process must allowed to continue. what is important is for us to ensure that one mdb will execute the plan. >> a bipartisan committee is looking into one mdb and its report is expected in the coming month. rishaad: we have heard about
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-- publicficial officials being implicated. we don't know who they are, but we are told the prime minister is not accused. >> that's right. the spokesman for the swiss attorney general's office says the malaysian prime minister is not one of the figures under accusation. authorities have been asking for malaysia for legal assistance in 1mdbinvestigation into after revealing that $4 billion may have been misappropriated. but the malaysian prime minister is not one of those under accusation. another story we are following on our website is about japanese trading. you can follow that on our website.
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what can the cruising speed of one of the biggest ships in the world tell us about the state of global trade? how will japan's move to negative rates affect other banks? we're off to the rtc when we return. ♪
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we are back. the chinese currency is about 15% overvalued according to the rbc. out why.d let's start off with a quibble you have had. canhave china kicking the down the road, but they are running out of road. why? the recent
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initiatives the chinese government has implemented tell me they are prioritizing instability and sacrificing long-term stability. they want to maintain growth above 6.5%, to rebalance the economy and implement structural reforms. is it structural reforms? we keep saying they are kicking the can down the road, but they are running out of road. sue: they are deferring conclusive action until later on. at that time, the problem can get much worse. the debt pile is growing faster than the underlying economy. we could have a severe problem down the road. a spokesperson from ing said they did not fix the roof when the sun was shining. exactly. they are prioritizing near-term instability for long-term stability. what china desperately needs is
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to have wholesale supply-side performance. they need to see a growing global economy. they need to see depreciation in the renminbi. they are not getting any of those. trillionthey had $3.3 in reserves. that has to be worth something. sue: i think it's a huge misperception that china has $3.3 trillion in reserves and firepower. if you apply the imf general metrics for required reserves or minimum reserves, which is a an economy's short-term debt and its other portfolio supply and, money required import payments, i am estimating that china's minimum isel of required reserves more like 2.7 trillion dollars. they could run out of reserves by -- within six months.
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rishaad: that's quite something. depreciation. they are doing everything they can to avoid it, aren't they? and you are saying the currency is still overvalued. sue: absolutely. look at australia. have enabled the economy to rebalance. accordingly, china is in a situation where they are keeping the room and be artificially elevated, but you have -- the elevated,rtificially but you have slowing growth, capital outflows, reserves falling, declining export competitiveness. all signs point to an overvalued renminbi. are they in a currency war?
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it's hard to argue when they are doing everything they can to keep the exchange rate up. rishaad: skirmish with a negative interest rate. sue: we think japan will have limited impact on the real economy. it was largely targeted at the strength in the japanese yen. again, you can't do value yourself to economic success or to achieve your economic targets -- devalue yourself to economic success or to achieve your economic targets in the long term. sue: no, you can't. part of this is keeping up with the joneses. of this isy to all the dollar. where is the dollar headed? what are the cues we are looking for?
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on friday will be key. we have leading indicators in the lead up to that. but we may not get full clarity. that something the central banks don't like giving us. reserve bank of australia is deciding on interest. no change expected. policy seems a bit muddy, doesn't it? you have a mining industry in the doldrums and house prices doing all right, but it's a two speed economy for australia. sue: very much so. moment, with the uncertainties, with the resource sector under pressure, core inflation tracking along the , even heads may prevail, but stevens is likely to reiterate more of a patient
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approach. rishaad: he must be happy with $.70 against the aussie. later this year? sue: looking forward to 25 point cuts from the rda later on. at the moment, what may be staying there hand is the resilience of the labor market. rishaad: thank you for that. >> these are the stories making headlines around the world. the world health organization a virus ared the zik global emergency. the director says controlling mosquitoes must be the priority rapidly across the americas. officials say there could already before million cases in latin america. concerns are growing ahead of this year's rio olympics. cases have been found in 23 countries in the region as of the end of last month.
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china has completed its biggest military overhaul in decades, re-organizing the pla into five so-called battle zones. the president presided over the ceremony in beijing as the ceremony came under a single -- as the military came under a single command structure for the first time. he has said he wants a fighting force that can win modern wars. tensionses come with high in the region as beijing extends its influence. football's moral governing body has blocked funding to groups running the game in the america as in the latest act in the corruption investigation. of $20s halted a payment million to the caribbean and south america. the u.s. department of justice has indicted 39 people in what it calls a world cup of fraud and says more charges could be expected.
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powered i 2400 journalists in 150 bureaus around the world, this is bloomberg news. we have beenng up, talking about australia. we also have india and mumbai. we will get the previews coming up. ♪
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rishaad: you are watching trending business. the reserve bank of australia will be making its first cash decision of the year but almost all of the economists we talked to expect no change from the current 2%. no change expected today, but we 25ld have 225 basis -- two
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basis cuts over the course of the year. what are people telling you? >> there are only two economist of of 29 -- economists out 29 surveyed who think today will have an effect, but further -- the further you go through the year, by june, it is 50-50 whether they reserve, cut, or hold. toward the end of the year, there are even a few economists predicting the reserve bank may begin tightening monetary policy. opinion very much split as to where we go from here. we take a look at some of the factors. australia's economy is still growing rather enviably in real terms. unemployment is looking good and trending downward. inflation is right in the middle
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of the target band. the currency is cooperating currently 71 cents, but the australian dollar has lost about one third of its value in the past three years. that has helped soften the blow from weakening commodity prices as well as tourism and education. a lot to ponder as they meet for the first time in 2016. cutthe consensus is no today. everyone will be watching very closely for a statement that might suggest where we go from here. rishaad: a fine tooth comb will be taken to that. rateo the r.b.i., the decision from india. we will be live in mumbai in about 25 minutes to get analysis on that. the world's biggest mining company has had its rating cut amidst a commodity slump. a.went from a plus to
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standard & poor's suggested it could fall further, and that is contingent on what happens with earnings later this month. has an a plus rating from moody's but is on review for a possible downgrade. they were down by .8%, extending losses, 1.4% the deficit is so far. having a look at shell and its rating. standard & poor's cut to the lowest level since the company began keeping records in 1990. andagencies said cost spending reductions don't significantly reflect the slump we are seeing in crude oil prices. they are likely to downgrade other companies as well. shell has been placed on watch for further reduction. looking at anadarko petroleum,
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the latest company to be hit by the oil slump, they are reporting their worst loss on record. they hope to cut their budget for the year by almost a half. plans to cut spending to make up for the biggest drop since june, 2014. barbie is giving mattel reasons to be cheerful. shares surging and rising demand for the long struggling brand. total sales fell last quarter and mattel may take another hit when licensing rights to disney brands shift to rival hasbro later this year. up next, the race for the white house is firmly underway. we will head to iowa. we will be in des moines and
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have a look at who is taking on the caucuses at the moment and who is likely to be winning as well. early results coming through. we live in iowa, next. -- we are live in iowa, next. ♪
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rishaad: a look at our top stories. early lossesing but remaining on retreat. japanese shares on the way down. energy companies driving declines in australia while the shanghai deposit is making some gains, snapping a four-day climb. company alphabet is poised to lead apple as the world's most valuable company.
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online based on strong ad sales. the company's first earnings report under the new structure there. we have some early results from the iowa caucuses as american voters get their say in the election. early reports indicate hillary clinton is in the lead. reports also indicate a high turnout for both parties. ted cruz leads the republicans. david: let me start with what happening in australia. we are looking at gold prices. oil prices on the way down. respective sectors. materials are down 1.2 percent. oil and gas down 1.5%. some of these gold miners are on
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their way up. there we go. petroleum.xpect in japan, the steel sector is weighing on the index as a whole. yesterdayrom moody's that demand from china may have plateaued. it depends on if chinese steel mills continued to produce exports. japan, a few things we are following closely, some earnings revisions, reports from the nikkei and an announcement buyback isay -- of a lifting shares. mazda motors down 3%.
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if you extrapolate into the billion,rter, ¥44 about 9 billion less than a total profitng forecast by 20%. the composite index has will be taking hong kong off the indices. long story short, too closely held, two big investors. these are the names taken out of the msci indices. the portfolio will reflect the new compositions. back to you. you, david.nk after months of maneuvering, the race to the white house has reached the foremost hartline. it's the first real test for the leading candidate -- formal
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start line. it's the first real test for the leading candidates. we are getting early numbers. megan, what are you seeing? >> more than early numbers now. side, over 55%ic of precincts are reporting and hillary is holding onto a pretty tight lead. too close to call. the night will go on, but she is holding on. republican side, much smaller numbers of precincts have reported, but ted cruz is leadaining a three-point over donald trump. marco rubio, the establishment favorite, is performing well. he was about 18% with 25% of precincts reporting. things are starting to shape up. is the first one. is that what makes it so important? >> that's what makes it so important. you should see all the world's
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media. we are in the lobby and you cannot brush by without reporters, surrogates, or candidates. it attracts so much international attention but it has a very checkered track record of actually naming the candidate who will be president, particularly on the republican side. we have not seen a winner go through and take the mantle in some time. they tend to skew toward evangelical candidates who really resonate with the base voters here. it is older, whiter, and more evangelical than most of america. it has an interesting place in american politics, but it is not to the usual predictor of who will be president. rishaad: how has the turnout been? >> the turnout seems to be cutting both ways. earlier in the evening and all through the week we thought high turnout would then if it donald trump and bernie sanders.
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are seeing in early results is that among first-time caucus-goers, bernie sanders is not taking as many of those people as we thought he would. that is interesting and that is going to help hillary clinton. many asung voters, as nine in 10 are going for bernie sanders. again, it is all about turnout. there are reports of high turnout, but on her side in particular, she seems to be holding her own, getting those people in, and attracting people to her support. it's interesting and a little counterintuitive. rishaad: let's quickly check on some of the other stories we are following. india is said to be going after unpaid taxes. about a dozen banks are targeted.
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payment demand orders could be issued in april. the move is part of an official investigation into customer service charges by lenders. china is said to have arrested executives at an internet financing firm for fraud. -- 21 peopletained were detained. the company is accused of with 91% ponzi scheme of the investments on its site said to be fake. china is cracking down on peer-to-peer lenders, describing them as "problematic." richard gelfand tells bloomberg the he is not worried about performance of imacs in the chinese market.
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imax in the chinese market. kung fu panda three built the u.s. films debut in china i-17 million dollars -- "kung fu " debuted in china and brought in $17 million more than the u.s. debut. off 59% from the ipo, which was three months ago. the market in the u.s., our parent company, would say we are worried about china, but our shareholders in china are not worried at all. chinese stocks may be tumbling at the fastest rate we have seen in seven years, but one part of the market is hotter than ever. we are talking, would you believe it, ipo's. list at this point?
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it defies all logic. >> because the market has been tumbling, you would expect ipo's to not be as popular, but that is not the case right now. they are extremely popular. everybody wants to get in on the action. six companies listed in the last two weeks and they have attracted $1.1 trillion. traded mores were than 1800 times on average. this is not surprising because of the returns. analysts say the returns are guaranteed. take a look at the shanghai composite. if you can at the graph up, we can see to companies that listed on december 31. stocks have soared, gaining more than 70%. people want to get a piece of the action here. ok, so more popular
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than ever before. what has changed? these ipo's were banned for a , so there is pent-up demand. >> people are no longer required .o pay upfront for ipo's if you don't tie up an idea with cash, everybody once to bid. the gains are virtually assured because regulators have cap ipo -- cap toarnings, pricegs ratios -- capped to earnings ratios. rishaad: let's take a look at what is going on in hong kong. the winning streak looked to be over with. prices have sunk by almost 10% since the december peak. lows ine at 25 year
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terms of volume. let's bring in our editor for more. how has sentiment turned so quickly? going onhas been a lot in the market for the past six months. september, as you said, was a record for the hong kong real estate market. since then, we have been hearing a steady drumbeat of bad news from china. retail sales have been following. consumers are jittery. all of that has conspired to make the hong kong property market lose steam quickly. developers are notorious for sticking to their guns when it comes to prices. are we seeing any capitulation? are they reducing the prices of these homes? >> they are offering hidden discounts and rebates and being stealthy about the cuts because nobody wants to spook the market. a lack ofe seeing is
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capitulation by the sellers, and the buyers are saying well, we are expecting prices to fall. nobody is breaking yet. it will be interesting to see who blinks first. we will quickly take a break and afterward, we will be on board one of the world's biggest container ships. the industry may have to navigate some choppy waters this year. ♪
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>> the stories making headlines around the world. thailand is making progress in the fight against people trafficking. a police officer says 100 two suspects have been arrested and 130 victims rescued.
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the eu has threatened to ban thailand seafoodev after widespread reports of slavery in the industry. , andmats, journalists humanitarians were able to pass in and out of checkpoints in ramallah. a wave of violence has seen 160 palestinians killed. six israel he's have died. is have died. vladimir putinng killing his enemies has been released by the prime minister himself. the video is apparently intended to show that putin is serious about fighting corruption. inered by 2400 journalists
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150 bureaus around the world, this is bloomberg news. world has a new ultra large container ship on the oceans just as the industry heads into what could be one of its most challenging years. we took a trip aboard the benjamin franklin as it made its way from china to hong kong. franklin is one of the largest ships ever built and is the largest container have docked in the united states. ityou stood it straight up, would be about as tall as the united states empire state building. final destination is long beach california, and we are hitching a ride. from thelivered shanghai shipyard to its french owners just a month ago, and the spec sheet is impressive. it can carry as many as 18,000
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containers, stacked 22 units high. it would stretch nearly 70 miles from end to end. they are loading containers here, more in hong kong and shen jen. they will sail to california at about 75% capacity, not because but becauserade, american ports can only handle so much. there is a labyrinth of passageways on each deck stretching the length of more than four foot all fields. -- the turbocharged engine provides the same thrusts of 11 boeing 740 seven jet engines. it consumes more than 200 metric tons of fuel each day, much more if cruising at its top speed.
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this is not necessarily a ship built for speed. it is optimized for what the industry calls slow steaming. it is more efficient at reduced speeds. it's a difference of up to 100 tons of oil per day. >> as night fell and the last containers were loaded, benjamin franklin snuck off into the night. >> maneuvering this giant ship h, two the birth -- bert pushing, two pulling. >> we have four huge ports. >> we sailed south in pitch black through the crowded sea lanes of the delta, arriving five hours later in hong kong. more car go to pick up on the benjamin franklin, bound
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for it -- cargo to pick up on the benjamin franklin, bound for the consumers in america. rishaad: steve, how was the journey? steve: i am still a stowaway on board the benjamin franklin. we have been on board since yesterday. we came down from hong kong, and the crew has finally woken up. the captain is standing to my keeping an ion me. we have been very honored to be on board this -- keeping an eye on me. we have been very honored to be on board this ship. it is really great. there are channel markers all the way down. it's just like an airplane runway. the ship lighted straight through. it's like butter. burns 200 metric tons of oil a day, but it is quite efficient because it has an elect tronic fuel injected
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engine -- an electronic fuel injected engine, a very large engine thatd an saves about 20% on oil cost compared to older diesel engines. 2000 20 foot containers are being added here. they aret, tonight, going to head to the main port, add another 5000 containers, and then it's off to the united states. long beach, california, then up to my hometown of seattle before turning around again, back to asia on the big, global trade route. athaad: steve engle there the port in hong kong. let's get more on the shipping industry. we are joined aa logistics
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analyst. how are shipping rates doing now? >> typically, we expect rates to peak just before the chinese lunar new year, and that is because the factories in asia tend to shut down for a week. this year, it has not happened. the rates spiked a bit, but then came down shortly after. if you look at the container boat itself, some of the major votes in asia, hong kong had the worst decline -- major boats in asia, hong kong had the worst a klein in six years. very similar to what happened in -- worst decline in six years, very similar to what happened in singapore. volumes could be down to shanghai, which has seen
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a 3.6% increase in volume. rates are going to remain low. it's a combination of demand, -- overcapacity, and lower fuel prices. a ship like the one steve engle is on, what is it doing when it comes to capacity? --it was among the biggest we thought that ship that steve was on was among the biggest. overcapacity is going to as there areong container vessels, at least for the foreseeable future. asia-europe route has the infrastructure to handle these ships.
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fore -- the odds are worse overcapacity. at the: taking a look global shipping industry. we have to take a break. ofuggling to control one asia's worst performing currencies. how might that sway today's interest-rate decision? we had to mumbai. head to mumbai. ♪
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rishaad: back with trending business. we are looking at the r.b.i., india's central bank, struggling to cope with a slumping currency and asia's widest budget deficit. it may prevent policymakers am cutting interest rates today -- from cutting interest rates today. what are we looking at from today's meeting? we are looking at a big wait and watch. the governor will present the annual budget for the next fiscal year. it is a widening fiscal deficit. it could reset the targets. on him.l weigh heavy
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he has warned the government of any slippage. add to that the value of the currency depreciating by 2.5% to the u.s. dollar in just 2016. about $2 billion have left the equity market as global volatility rises. that is going to be a point to watch. on top of it all, the state owned banks in india are struggling under bad loans. they have asked for a cleanup. fromill have not heard india's largest state owned bank on their earnings. the private banks are trending at the lowest levels in 52 weeks. --see rate movement rishaad: we will have a look at
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ast is going on as far trading positions in this part of the world. it largely to the upside now when it comes to the shanghai composite. up 2% currently. really, after four days of advances, there we go. unchanged on the nikkei. looking at soul in singapore -- singapore, last time i checked, it was lower. that is it for the tuesday edition of trending business. ♪
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>> from our studios in new york city, this is charlie rose. charlie: joining me is matthew dowd from abc news. from washington, kerley -- carol lee from wall street studio. and out on from washington -- from bloomberg. i am pleased to have all of you on this program. other any consequences coming out of what happened last night with donald trump? al: the conventional wisdom is the donald trump did well, was shrewd, smart. well i think we have a three-way

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