tv Bloomberg Markets European Close Bloomberg February 8, 2016 11:00am-12:01pm EST
i'm brendan greeley. mark barton joins me live from london as we wrap up trading in the next hour. you are there in london. it has an brutal today. what are you watching gekko mark: stocks have fallen to the lowest level since 2014. the european close starts right now. brendan: taking you from new york to london in the next hour. straight declines. we have not seen again since february. we have fallen to the lowest level since october 2014. happened significant
january 20, the day before mario draghi indicated there will be more stimulus in march. the market rose for two weeks. it has cut back today. it has wiped away all of the gains. have a look at the industry groups. a broad-based selloff today. every single industry group is getting hammered. media. basic resources the best performer down a mere 1.1%. we do have a gain or, the biggest of 2014. look at the gain. shares of by 11% today, biggest years. 2.5 shares rising after a proposed to boost the annual dividend by 10% because of strong cash flow. this is a minor that makes money as long is gold is about $1000, which it is. the riflele, unlike
that carries high level of debt. this company has no debt. tracking gold today. tracking gold higher this year. mark barton has been digging since 5:00 a.m. looking for some kind of silver lining in some kind of equity. talking about an equity not doing very well. the lock and engineering firm out of sweden got hammered today. ?hat happened gekk 9% lower today. the world's biggest loss maker reported weaker than expected fourth-quarter. they hurt lower margins as well. morgan stanley says the same fx likely to cover the risk to customers default in on payments in china.
that has been a big part of the strategy. one of the big decliners in europe, down by 9% with about 25 minutes left of today's session. as i said, every industry roup is getting slammed today. brendan: only five hours of light left today in stockholm anyway. nine hours away from the close of trading today anyway. to be hard to find reason happy if you are along the stock market indeed. losses continue to accelerate. less than two percentage points away from entering a bear market. going back to a closing high july 20, we are more than 18%. the losses just keep accelerating. the usual suspects. the cap technology continuing the selloff with the nasdaq under performance. facebook and amazon are down once again.
the banks continue to sell lots of the worst performing far in 2016. 6%. of america declining what is going on here yet so we continue to see the collapse in the bond deal. the two in 10 year notes, we will see .67%. also, as we continue to seek, a compression of the yield curve thought to be bad news for the banks for a variety of different reasons. opec ministers furiously meeting that does not mean they will get a bit. what is that driving? for one.ec prices even though there is not a lot of optimism that there will be a supply agreement, production of among opec producing nations, nonetheless, there is disappointment reflected in oil
prices. nonetheless, still sing pressure. we continue to watch chesapeake energy. bloombergeye on the to see if we have any news headlines coming out. shares down 51% in a single day. concern about restructuring, potentially a bankruptcy for this company. the shares are halted. pending some kind of news. twirewire reported -- deb reported they hired a restructuring company. $9.8entally, i mentioned billion in debt. the market cap is $1 billion. the debt load substantially larger than the market cap. we checked earlier all use company and energy transfer. replacingectedly are the cfo. other oil companies are down. not as much. kimberly-clark.
should be canned morgan. all of them trading lower today. chesapeake's a stunning drop today. brendan: checking in on the first word news. president obama says he is not surprised north korea launched a rocket over the weekend. in an interview on cbs this running, the president said u.s. and south korea are discussing options. the united nations security council likely to come out with more economic sanctions this week. another dispute between israel's prime minister sentiment that yahoo! the obama administration after three rounds of talks there is no progress between the sites on military aid package. saysilitary -- a newspaper president obama said he is willing to wait for another president to take office. iran has honored the negotiating
team on the landmark deal. the president awarded medals to the defense mister. it brought about the lifting of economic sanctions last month. in taiwan, for survivors were pulled out of the building. more than 400 people are believed to be trapped. -- four survivors were pulled out. killed at least 37 people. several thousand detainees have been executed or been to death in what amount to fix termination on international war. international investigators say they are short of enough evidence to provide more specific estimates of those -- of the killing of those detained. around 150 news bureaus the world. i'm courtney donohoe. big declines in europe. one country under the radar, greece.
the athens stock exchange index. greece shares falling to the lowest level since 1990. before we go, i want to show you a chart i pulled up, w es i. the best and worst performing indices in the world. look at the bottom of the chart. the worst performer this year. down by 25%, overtaking china's shanghai composite. we will tell you more about the global route next. stay with us. ♪
first, a look at some of the biggest business stories in the news right now. he'll of google is on the purge of becoming the highest executive of the public traded company. restrictedcompany stock value at $199 million. former treasury secretary timothy geithner has gotten a credit line from j.p. morgan to help with his new career in private equity. he will use the money to finance .ersonal investment in fund top private equity managers will invest millions in new funds to show investors the interests are aligned. hasbro posted first -- fourth-quarter profit that beat estimates. parkwars in jurassic overcame weakness. business flash for
this hour. mark: oil prices will stay low for another decade because of slowing prices in china -- in the china and sales growth. he spoke exclusively with bloomberg's ryan chilcote earlier today in london. there isve to believe a possibility you will not necessarily go back above 100 ever. , and i've genuinely been in the business for far too long. 104 ae already been above very few number of those years. and china has changed. huge growth in the middle 2000. this is something that is very dramatic. happened at a time when the oil industry was not investing. happened at a time when we did not have shale. that growth and pool of
resources has changed. you said oil prices at $48 per barrel. the year after in the year after that, where do we move? >> i think we do imagine a band. we would naturally see this. i think we do believe something like 60, you can bet we would bring back on some of the oil fields that will probably go out. discussion huge about that. i do not think the oil industry quite understands all of the economic. or us, it is clear a lot of the oil shutdown in the next year or so because it is simply too low of a price. some of it could come back. i do not think we understand it. we see that possibly above 50.
that will come back on again. we have natural decline every year. certainly lasting for 5-10 years. the president and chief executive of ann taylor speaking exclusively with ryan chilcote in london. let's examine what he says. if oil stays in this for the next 10 years or decades, this is the oil price going back a decade. i have drawn the red line which pretty much tells you where this is. >> exactly. this is wayne vanilla brand for oil. just type this in on your journal. -- on your terminal. i think the idea is he says
brent, wti and the year at $48 per barrel not revolutionary. we did a: just last week. think that is where we will end the year. as idea it would persist for long as 5-10 years is not something people are talking about in the oil industry. you name the oil company, and i will say they will see a higher oil price next year and beyond. the reality is, they need it. one reason they are not talking about the prospect of prices remaining where they are is it would be ruinous. the entire industry would have to replace it self. more broadly, all of the would also have to change the structure. has just been
halted because shares have fallen by five point -- 5.5%. shares have been faulted because of volatility after falling 5.5% in london. seven stocks that are rising. all of them are mining companies. barclays is not even the biggest decline are today. shares have been halted because of volatility. brendan: going back to oil. it does seem the only thing that could drag prices back is some sort of cartel able to form again. you are a russia watcher. what is the likelihood this will turn into an agreement to? wax the answer is, it is not very likely. an interesting thing ian taylor said is he sees a 40% chance of matt happening. most people are pretty dismissive of this happening.
ian taylor makes this more probable than some old are considering. on probable, but it could happening -- could happen. maybe there is a sense that this strategy of flooding the market is not working, and prices will stay low where they are right now for too long for comfort. maybe they are up for a coordinated cuts. the issue is it would have to be policed, and that has always been a sticking point for the russians and saudi's if they were to get together. they areook at what producing. bloomberg follows this. you can see how low they are in the water. it is not a big that science. picture ofery good what is going on, which is they
are only producing more and more oil. they will cut and would want it to be verifiable, the keyword in all of this. this pressure of the declining price of oil is differently all over the world. news out of nigeria that there is very difficulty of holding on to this in the era. ? this price doing of oil, this reality of oil, what is this doing to the russian economy? >> the first thing it has done is completely destroyed the ruble, destroyed russia's purchasing parity. it has obviously created a extreme. amount of and patient, double-digit inflation in the country. it has made it very difficult for the russian government to balance the books. it has accelerated the plan to privatize assets. it has really gotten as searching for answers. the whole idea going back to ian
taylor, if we see these kinds of low prices persist beyond the next couple of years because the russians can get by with the reserves we have for the next couple of years pretty easily, then we do not have really quick solutions. you have to change the structure of the economy that is not easy to do or they would have already done it. mark: thank you for joining us. ryan chilcote in london. we are roughly 11 minutes away from the close of markets. hammered.solutely stoxx 600 down by 3.6 percent, headed for the biggest the client since august of last year. in october 2014. the dax lower. cac 40 lower as well. index all linked to the lowest level since 1990. no industry is being there. this is the european close. ♪ \
brendan: this is the european close. breaking news on china's -- on chesapeake energy. julie: trying to reassure the market after the 50% drop in shares. ellis, the company reported seeking a restructuring plan for chesapeake, they said it has served as chesapeake council since 2010 and continues to advise the company. chesapeake has no plans to pursue bankruptcy and is aggressively seeking to maximize value for shareholders. the shares are still halted. pending news. we now have the news. usually there is a little bit of a delay until the sales open dashers [. the 51% drop. we will see if there is any kind of rebound once the shares opened back up.
as for the broader market, we continue to cd selling. 41.75 is a level to watch on the nasdaq if we would enter bear market for that particular index. we're not on track to do that for the moment. we want toumber watch in the coming days as we continue the selloff. not everything selling off never rarelyery rarely -- very is. full prices are higher as we the investors looking for safety. cold miners have been rallying as well. gold miners are up better than 25% for the year to date. that is continuing to be the story of the day. losses in equity and energy. billionaire developer richard live from, president and ceo of the frock group weighed in this
morning. -- lafrock group. way back a year ago in that business. we were drilling 12 wells at a time. now we are drilling may be one. i am actively looking for opportunities in the energy sector. actively looking. , and have seen reduction yet people are hoping just as much. cost. have some you do. you have already spent the money , you might as well get out what you can. a lot of the companies are burdened with a lot of debt. they had to push out whatever oil they can to pay the bills. stephanie: have you had to fire people? >> my staff was cut back somewhat. as i said, right now i am
actively engaged in trying to find opportunity. if there was ever a great time in the energy business, it is to buy when gas is selling for two dollars and oil is under $30. specifically?re >> i am not interested in buying companies. im interested in buying assets. i mostly like to buy mineral royalties weary of that is where you get the pleasure without the payment of. that is something i have been focused on. we have always been involved on that and of the business. the property right that you own the property that allows you to participate in whatever comes out of this. brendan: richard lafrock speaking this morning.
take a look at the scene of the carnage in europe and described it to me. mark: wow. could sayndustry you that is only standing out is the ftse 100. look at the screen in front of me. look at the declines. ..5% lower the dax down. the cac 40 down. where is money going today? it to the bond market. u.k. 10 year yield falling today. german 10 year yields are falling. investors are avoiding the riskier part of the european bond market. spanish yields rising. there is the stoxx 600 in europe. it will head for the biggest those --
the market will have its biggest decline since august 24, the height of the market volatility when china devalued its currency. 3.85% lower on the day. headed for the lowest close since october 2014. european stocks have not risen in february, down for six consecutive days, the longest losing streak since june 2015. every single industry group on the stoxx 600 is trading lower today, trading at 13.8 times estimated earnings, close to the lowest in almost two years, also trading 24% below record highs set in april last year. have a look at the greek stock market. it is not the prettiest of charts but it's effective. se index has fallen by seven point 7% today, right now
the worst-performing stock market today, and for the year out of the 93 global primary indices we track here at bloomberg. joe weisenthal will be telling us all about greek assets in just a matter of minutes. where is money heading today? it is heading into the core eurozone bond market. this is the german bond market. these are the yields, you can see the one-year to the 30-year. yields are falling right across the curve today. there you go, brendan. money into the core, the havens. happening today for investors across europe. brendan: but again, you tell yourself are lining. randgold resources. such a beautiful chart. so much more impressive than the greek equities. mark: this is the
best-performing stock in europe this year. you know why. gold has been rising, up by 10% year to date. been puttinge their money into the south african gold miner. 12.5% higher in two years. it is boosting their annual dividend by 10% because of strong cash flow. it makes money as long as gold is above $1000 an ounce. debt, so that makes it different from their peers as well. of course, building up cash at the same time. up by 12.55%. one of the few gainers today. only nine stocks have risen on the stoxx 600 today. brendan: clouds are gathering over the global economy. the pressure is not letting up. the stoxx 600 to its lowest level since 2014. the use onest says
stocks and commodities don't matter in the current environment. ares currencies that driving the market. daniel weston is with us. looking at pressure on currencies, particularly on the are we on the cusp of a currency regime, will there be a painful transition? so. think you are talking about negative rights, you are talking about th yuan, the uk's inflation outlook does not look too good. i think it is a matter of time before the fed gets more dovish and it looks like they may alter their interest rate rises. there could be some downside in the dollar as well. when we talk about
currency wars, we are seeing what is happening in europe today. in was actually pretty good europe. is that reflecting any underlying strength, or do we go back to your thesis, that we are looking at currency differences? we tend to look at the change in inflation expectations. in japan, inflation expectations have halted. australia and canada, the weakness has halted as well. u.s., our, the inflation expectations, our data shows that it will continue to drop off. i don't think there will be any rate rises as disinflation continues. mark: where are we seeing rising inflation? how does that affect our investment horizon? >> any inflation anywhere.
is seeing a plateau in canada, switzerland, japan, but not in britain, the u.s., europe. -- i am short and bearish on commodities. back to your earlier statement about oil, if the fed does not raise this year, and the u.s. dollar is weak, there could be some upside in commodities. some believe oil will be around $50 for the next 10 years. do you look that far out? that is a pretty good dartboard to throw something at. if the fed does not raise and the dollar weakens, if there is a 30% downside in the dollar, oil could hit $100 again. i don't think it is an oil trade, it is a u.s. dollar traded. you bring up inflation
expectations. two fed presidents have brought up the same thing, looking at market measures of inflation expectations, consumer expectations, and they are lower than they have ever been. are you concerned that what we are looking at now is not relative currency trades but a change in consumer and business sentiment? with energy prices as low as they are, the innovation of the technology space putting pressure on inflation worldwide is,ut the other side disinflation continues, stimulus will be there. there will either be more rate cuts, qe, or stimulus. that will put some pressure on race going forward. brendan: your inflation production models seem to be more accurate right now, at least closer to market expectations, then the fed's models.
what has changed in the way that we model inflation? >> we are just looking at relative change of expectation. we are trying to look at where the trend in forecasts are moving. we just see it moving lower and lower. we are not trying to predict an absolute number of cpi or inflation. mark: what is the trend in equities? we are down to the lowest levels in europe since 2014. i have a chart later showing the stock 600 and the analyst price target and there is a big difference. does that mean analysts are being too optimistic, or is there upside? analysts are usually over, but i would've thought, where we are short equities at the moment, we have a continued downside in global growth as well. certainly a matter of time before a headline-driven
central-bank response comes, which could boost equity markets higher. short equities, you like commodities. bonds.l very long expectations for more qe in the eurozone. expectations there will be not be a rate rise in the u.s.. mark: in january, the performance was up 2%. you are still matching or beating 96% of your peers. what is the secret? growth inflation, correlation, volatility. that is what the focus on. mark: daniel weston, thank you. brendan: we are going to check in on our first word news in the u.s. courtney donohoe has more. >> president obama will ask congress for $140 billion in emergency funding to fight the zika virus.
thousands of pregnant women in the caribbean and south and central america have been infected with the virus which is spread by mosquitoes. zika has been linked to birth defects. new hampshire votes in the first presidential primary tomorrow and bill clinton cannot hold back any longer. he accused bernie sanders of intentionally deceiving voters. he also went after his hisorters for attacking wife's backers. two of the senate's key voices on defense say the navy should consider delaying the deployment of the new combat ship. john mccain and jack reed also urge the navy to tone down its rhetoric about the ships until they successfully complete more testing. a white chicago police officer is suing the state of the mentally ill college student he shot to death the day after christmas. he says the incident has caused
him extreme emotional trauma and is seeking $10 million in damages. a grandmother who police described as an innocent bystander was also shot to death. therd numbers watched denver broncos victory over the carolina panthers. the big game score the second-highest ratings overnight. super bowl 50 average 49.0 in household ratings, which was topped by last year's game. brendan: we are watching chesapeake energy this morning. they have announced they have no plans to produce -- pursue bankruptcy. the company is now paring its losses after that denial. we were down at 1.51%.
for a look at tech moves, abigail doolittle has more from the nasdaq in midtown manhattan. is less than 1% away from entering an official bear market as measured by a 20% move down from its july 2015 peak. degree because of the biotech sector. it has been big tech that has been the big drag on the index all year long. ironically today, the index maybe helped out by apple. shares have been going up and down. there were reports that apple is on course to open stores in india and expanded global footprint. weight inhe biggest the nasdaq, so they will be key as to whether the market holds its lows. facebook, the third biggest drag be to -- behind microsoft and
amazon, says it will not be able to offer its site under a free basic plan in india. just last week, facebook was one of the only to be of year to date on its strong first quarter. now down on the year. it appears to be heading toward its 200 day moving average. the question is whether buying support will hold. brendan: thank you, abigail. let's go down to mark barton in london. mark: check out the final close. we are seeing big numbers here. there is the ftse, down by 2.7%. sales and consent -- pales in comparison to the decline in italy. no industry group was spared. it was an indiscriminate selloff today. take a look at the stoxx 600. only nine stocks finished the session higher today.
14 stocks, to be fair. german bonds arising. the euro, one of the haven currencies along with the yen. finishing off with the index that has been hammered the most today, the athens stock exchange. down by seven point 87%. banks are getting hit. .87%. coming up, is it any surprise that the best european stocks are up tied to the best-performing commodities? i have a chart showing you how well read gold has been doing. ♪
brendan: time for our global battle of the charts. some oftake a look at the most telling charts of the day, what they mean for investors. you can access these on the bloomberg. first, joe weisenthal has returned from what looked like a food tour of hong kong. anothertalking about great place to travel, greece. not so good from a financial market perspective, the markets are getting demolished. as you can see from this long-term chart, you have to go back to 1990 four the last time greek stocks were at this level. people don't really know what is going on. there is some stuff with the bailout review not going great. that is not really anything new. people have expected that for a while, but people are dumping it like crazy. down 8% today,
their lowest level in multiple decades. brendan: what happened in 1990? >> there was this long period where people thought greece and europe, they were all going to unify economically, and it would be great. then there was a bubble, and since then, all the air has been let out. brendan: mark barton, what do you have? mark: randgold resources. one of the bright lights in today's stock market selloff. it is the darling of the european stock market. the biggest gainer, look at those shares. up to 60 pounds today. the highest in two and half years. shares rose 13% today after it increased its dividend by 10%. what is going on with the share
price, should investors buy shares in randgold resources? this is the average price target of endless we surveyed. the difference between the yellow line, 47 pounds and the white line, 60, is the biggest since 2009. it is not every day that we see a golden crop in the markets, but check it out. that is where the 50-day moving average moves above the 200-day. that is a bullish sign. what is not such a bullish sign is the relative strength index, which is at 89 right now. since not been that high 1982. as anyone knows, it does not matter if it is above 70, yes, it is overbought, but the time
to sell is when it dips back below 70. keep an eye on the rsi. 41% saynalysts say buy, hold. 18% say sell. i am so excited, i cannot even speak. barton, you are selling me in this stock like it is a used car. i have nothing to do with randgold resources. merely a technical analyst. the charts right now are pretty bullish. say, i admiree to the symmetry and simplicity of oe's long-term look back to 1999, but i'm giving it to mark
time now for the bloomberg business flash. a look at the biggest does this stories. hackers using malware to pestering a russians bank computer defenses and move the ruble dollar rate 50% in a matter of minutes, according to a security firm. the hackers used a virus that allowed them to place more than $500 million in orders at nonmarket rates.
the french retailing casino has agreed to sell its stake in the thailand supermarket chain. some say the company understates its debt. apple is on track to win government permission to open its first retail stores in india, according to a person familiar with knowledge of the matter. tim cook want to grow the company's business in a nation with 1.3 billion people. that is the latest business flash. brendan: in today's pursuits, people pay for newspaper descriptions that prescriptions, mobile phones on a monthly basis. that is the idea behind onego. the app allows you to buy unlimited flights in the u.s..
paulius grigas is with me now from the washington newsroom. let's start from scratch. walk me through what onego does. >> first of all, thanks for having me here. ke netflix for air travel. for a monfils of scripture and, you can fly a limited on commercial airlines for one monthly fee. onego would have three main benefits. with onego, you can have creditability and control of your airline expenses. you don't need to worry about prices, and in many cases, sacrifice convenience for the price. you know how much you are going to spend that month for all of your air travel needs. it comes to you if you pay for the travel yourself, and it becomes very important for companies when somebody needs to
buy travel for many employees. is, the wholeefit booking process is simple and easy. you don't need to worry about the price. you don't need to pay during checkout. date,mply select the departing destination, arrival destination, and you choose the flight you like. mark: is this like a gym membership? a lot of us have had memberships that we never used. we are paying for these memberships which we never use. you charge an array of prices. let's say one of your models is $1950 a month. are you hoping that your customers will not actually use that amount of flights per month? a very good question. we are not for everybody. we are particularly targeting frequent business travelers. you need to travel a lot.
that is the key. price, wetioned, the tried to accommodate different types of customers, so we have three regional plans which are cheaper, and then nationwide plans, which allows you to travel anywhere in the u.s. of course, that is for the heavy travelers. grigas, founder of onego, thank you. a quick look at the boards, u.s. stocks have been trading down all day long. ♪
the nasdaq getting hit the hardest, down by 2.5%. volume is also increasingly higher come in terms of the dow up 24% versus the 10-day average for this time of the day. you can put a lot of the blame of the selloff toward the banks. overall, here in the u.s., as well as overseas. bank of america dropping 5.8% in the u.s. you also have european banks leading the declines overseas. the greek of banks, of course, getting hit the hardest. the stock exchange getting hit the hardest among all indices across the globe. let's get to julie hyman who is monitoring the market moves. julie: we are seeing a selloff today. you can put the blame on the financials, but who can you ultimately put the blame on? confos what is so