tv Street Signs CNBC January 15, 2016 4:00am-5:01am EST
. good morning, it's friday. welcome to streets signs. >> these are your headlines. >> well, europe sees a halfhearted start to the final trading day of the week as green gives way to a bit of red and asia, the shanghai composite closes in bear market territory. >> a huge investment in the united states comes back to haunt bhp as the global miner takes a $7.2 billion hit on its on shore aassets. >> the biggest settlement leaves a $5 billion dent in the
investment banks wallets. the penalty taking a chunk out of fourth quarter earnings. >> general electric cuts a deal to sell it's alliance business to $2 million more than electrolux offered in 2014. >> hi, good morning. it's friday. it's street signs and carolin this may be your last day before your maternity leave. for those of you that haven't noticed she is pregnant. we have had people writing in though saying congratulations but that doesn't mean that we're not going to battle it out one last time over the charts and we're kicking it off battling it out over which chart we feel is the most relevant to investors. why don't i show you the shanghai composite?
there's argument out there that now that we're in official bear market territory that the shanghai composite is the chart to watch out there and you could argue that we shouldn't have seen the chaos and selling out that we've seen over the last couple of weeks. we had the big sell off in oil. carolyn will be talking about that. middle east instability and slow growth but it shouldn't cause panic. the reason we're seeing panic is the chinese government is going through a huge amount of readjustment. growth is slowing. we're seeing the government doing all kind of things to stabilize the yuan and capital flight is taking place. you have to be looking close tore see what happens. >> your time s'up. your time is up. let me tell you why i think that brent and wti are the chart of the week. let's kick things off with brent crude falling back below the 30 level. it happened once before. we're now down another 3.4% so once again you're seeing the resumption of what seems like panic selling in these markets. year to date and the year isn't
very old, is it? we're down some 20% for brent and wti. 12 year lows. people say it's no longer about fundamentals. it's about sentiment and investment flows and brent crude 29.85. wti, also sub 30. >> all right. who won the chart wars? both charts really, really important for sentiment this week but how about we ask what he thinks? who won the chart war? what do you think. >> the prize goes equally to both of you because they're so interlinked. if china goes down brent goes down. >> i asked viewers, i have to say i did ask viewers on twitter coming into the show on what they thought and the vast majority thought it is important. marty saying it's still the second largest economy in the world. obviously yes everything is made in china. steve an interesting comment saying yeah. if the shanghai composite were higher now, 5% of the world markets would be flying.
we are interlinked in a different way than in the past. >> i completely agree. it's showing the health of chinese economy as well. not just the turmoil but also a slow down in chinese demand for oil products if you look at the oil market and they're interlinked. if china slows down. china which has been the pillar of global oil demand now is starting to show signals that it may not grow at a percentage growth year on year and that's not good news for brent because if demand slows brent will suffer. >> one of the big calls from jp morgan is the movements in oil prices is no longer down to fundamentals. it's down to investment flows. tow agree with that view? >> yes. oil is such an international commodity. it's not just driven by fundamentals but the nervousness in the market is leading for investors to get out of it. if you look at the shot or positions dropping by 24 million
barrels last week. it's a clear indication that the investors were still trying to find the bottom and were trying to get out of it because they don't see commodities as a safe haven and returns on it as most of them burned their hands as well last year. >> what's the pain threshold for opec? you would think it's already been hit but there's so much talk about another emergency meeting. do you think it will happen? do you think at these prices if we see brent and wti dipping below 30 twice during one week they'll have to meet again? >> it's dependent on saudi arabia and they're quite clear if their motive behind keeping prices lower to get high cost producers out. if you ask t me at what level will opec receive stop production it will be more than this. they'll stop slowing down their investments but operational costs probably slightly lower than this year. further for brent to fall when
you actually start seeing wells being shutdown but not at the current levels because of right now. >> if i look at what's driving the markets at the moment from a larger perspective you could argue there's more transparency in the oil markets with regards to arguments about where we're heading in oil or what opec is doing or the oil supply coming back on the market versus transparency with regards to global growth/asia leading the way. do you agree with that? >> that's quite true. at least at the end of the day oil is drich by factors such as -- supply demand. you're slightly getting a heads up with what's coming your way in 16. but with asia, particularly china, there's absolutely not as much often indication, a guidance to where you can see, particularly with the slow down
in china but they have come back again at the beginning of this year and you're quite right in saying that you have less transparency there than in brent and brent at least after falling so much has only so much more to go and after that you can see a rebound pop up potentially. >> how much of a trade do you see in this? we're below $30 again on both contracts. we have been there in the past and been there before but we forget. we're a bit forgetful. do you think there's a big trade in there to continue to now go through other technical levels to the down side? >> i think there are. if you'll see some people are looking at levels of brent hitting $26. but actually speaking you can go -- that's why the numbers are 20 or 10 hitting the market these days. they're looking at technical levels as well. >> one of the big puzzles this year is the fact that the drop
in oil prices didn't lead to a big pick up in consumer spending. why do you think that is? and do you think that will still pick up in 2016. >> at the end of the day, 2015 saw a massive drop in prices immediately. you saw it play an immediate role in 15. at that point global growth also seemed to be growing faster than anticipated. with the end of 15, generally we started seeing some clouds over chinese growth and the economy. as soon as demand starts becoming doubtful then it's unlikely that the drop in oil prices will show the same kind of elasticity unless the demand was stronger. so you see the demand is not looking great. it's slowing down in terms of growth. it's still therement growth is still there but they aren't revised down and that revision down is not going to help in
terms of brent being supportive despite oil prices coming down. >> thank you for your time. i'm still quite disappointed that you didn't pick my chart as the winner although you are an oil and gas analysts. >> yes. >> so it's a tie, right. >> it's a tie. >> no, it's a tie. thank you so much. oil and gas analyst. >> well, tie or no tie. let us know what you think. find us on twitter. we're also on e-mail as per usual. street signs email@example.com. i always have to think about that e-mail before i see it. it's on screen and i got it right again. when it comes to our european equity markets we're lower. asia hitting 3.5 year lows overnight. the chinese data once again. new loans in december well bellow levels of last month. next week will be interesting. a whole host of chinese data out monday and tuesday and the gdp
data will be closely looked at on the back of the china discussion but europe lower. the asian markets also seeing a bit of a hit in the overnight session. just looking at the specifics here in europe but by and large just closing out what has been another pretty volatile week. so january has been an interesting month indeed. >> all right. here's what's coming up on the show on street scienigns. collapse in oil hits bhp very hard. we'll assess the fall out of this latest announcement. and we cross over to jakarta as isis claims responsibility for the bomb and gun attacks in the indonesian capital yesterday. and after the gop front runners duked it out in their latest debates we'll go to the scorecards to decide who walked away victorious. that's all coming up on the show. don't go away.
welcome back. you're still watching street signs this morning. he is essentially talking about schengen. he says the euro currency is pointless without it. he also says whoever kills it will harm the eu market. other flashes out in german but my german is not good enough. >> i can't help you here. >> interestingly enough, there is an argument that actually some of my middle eastern friends were saying. they were saying leave it to the middle easterners to be the ones to ruin the schengen agreement. because of the refugees coming to europe. that it's breaking down. that's just one view. >> let's get back to our top corporate stories. shares lower this morning after
a $7.2 billion write down of its shale assets. andrew mckenzie layed the blame on the dramatic drop in oil prices for what he called a disappointing write down. the largest miner by market cap has not cut the dividend since 2001 but that prospect is front and center for investors. city is pointing out that operating cash flow will fall $4 billion short of the $15.4 billion earmarked. so it's going to be very, very challenging to keep that promise of a stable and rising dividend and analysts believe this dividend could be slashed. by how much? that's the question. many people it will be slashed in half. >> that will be pretty big. a lot of people hold on to the likes of rio and bhp for their dividend paying capability. >> it's interesting to see what companies are doing with their assets. you have a lot of the oil companies out there that simply
to take massive cuts in value for these u.s. operations but bhp not being a stand out among them. >> no. >> they're saying that the deadly paris attacks and a warmer winter are to blame for a slow down in fourth quarter sales growth. the french retailer posted sales of 22 billion euros and weaker co consumption. it notes that business in brazil is resilient. >> h&m posted a better than expected 10% boost. investors reacting positively to the swedish retailers figures ahead of the earnings report early this month. shares up higher by 2.65%. bucking the overall trend that's negative today. >> and three sites were raided by fraud investigators looking into vehicle emissions software. that happened yesterday. wiping billions off of the french car makers market value. shares this morning had been rebounding currently just a
little bit lower. investigators found no evidence of defeat device software similar to what was found in their vehicles. the announcement was echoed by the french ministry. >> the british home builder was expecting record 2015 profits. they delivered 8% more homes than last year at an increased average selling price of 231,000 bounds. the group said it was confident of a stronger 2016 as it looks to increase sales outlets further to cope with higher volumes. shares up 2.3%. the second top ftse mid cap gainer after the company had a record profit. let's talk to charlie campbell. thank you for joining us this morning. what is bovis doing right? last year there was so much concern about margin pressure. >> yeah, '15 closed well for
most of the group. november and december have been quite good months and for the year generally as a group margin versus moved forward because selling prices moved on a bit and although bill cost inflation is starting to pick up it's not had an effect on margins but as we look into '16 and '17 that will come to an end and we think margins will probably peak out in this year. >> you said evaluations were too optimistic because of the margin pressure and because of the inflation and the vigilant regulator so this applies to the entire space. >> that's right. more so it's the larger cap names than the smaller cap names. so for the group as a whole, historically we use trading between 1 and 1.5 times book. that's now up to over two although it's not like bovis is only on 1.2 times. that valuation argument is much less valid for the group. but i think at over twice book people really are expecting everything to go right and my
argument is that things mostly go wrong but ceases to be quite as good as it's been and you start to have bill cost inflation eating into margins as we two forward toward the end of this year into '17 and the market looks forward. >> can i ask a more general question about the building markets? namely whether or not we're seeing a lot of building at the moment or are we not seeing so much? i ask because i can't figure out whether it's just that we had no building through the financial crisis and now we see a lot of activity or it's just coming back to the low levels. >> depends where you are. in some parts of london it's a building site but across the u.k. as a whole we probably need to build around 200,000 houses a year. maybe even more. we're doing about 140 now. so i think around 90,000. so quite a long way up for 2008 debts so still a long way to go
to be satisfying the needs of the country. >> what do you make of the changes? they are going to be hit with a huge tax coming this year, right? 2017. >> starts from april this year, did changes and there might be further regulation as well. i think it is political rather than economic. i think the government wants more owner occupiers and to do that makes it a little easier. it will slow rates of inflation because all of the growth and mortgage improvement has been on that side. a bit less growth in mortgages. slower house price inflation. >> let's talk about your favorite picks and least favorite picks on the screen. what about your favorite picks? what do you want to buy in this environment which you say could see peak margins in 2016. >> the big sell are largely because the volume growth slowed in the big builders and
combination of gross margin pressure and low margin growth means underperformance but if you pick out a stock, they have lots of volume growth. it's achieved the volume growth over the years without any operational hiccups and endangering the balance sheet but it's a volume growth argument. they're very well placed to grow. they do 7,000 units a year to be a major hospital they can do 14,000 so potential to double over the medium to long-term and that volume growth should outweigh the margin pressure that we expect. >> are rising interest rates a big problem for many of the home builders? we heard from the boe yesterday. we probably won't see the first hike until november or 2017 if you believe the markets? >> i think in the real world interest rates don't make a lot of difference to the housing market. even if mortgage rates went up 100 basis points in the year which is a big ask. you'd only need about 3 or 4%
growth in wages to offset that so i think in the real world interest rates don't derail the housing market but it's a sentiment call really and investors are brought up from an early age to sell a rising rate environment and they look to do that quite early. you're seeing that in the states right now and that would happen ahead of a u.k. rate rise. when that rises is anyone's guess. >> it's tough to get it out of the system. building materials and analyst. >> goldman sachs will be shelling out $5 billion to settle claims that it missold mortgages ahead of the financial crisis. ceo said in a statement that he welcomed this agreement. the fine is divide between the department of justice and other agencies as well as cash relief for homeowners and distressed borrowers. shares were trading lower in after hours after a solid session state side in germany a
little higher this morning. so 5.1 billion, that's the deal over this bond misselling but they're one of a number of banks fined for doing this and you have to say it does seem still that the u.s. bank versus been taking the majority of the heat in bundling these products together. many would still say that we, they, everybody didn't know enough about the ramification of these mortgage backed securities in the longer term. in the longer term. >> it's true. but if you take a look at the fines they do seem inflationary. jp morgan, $13 million. wow, this is a very profitable company but you have to wonder if the fines are excessive. i'm not con toning what they did in the run up to the credit crisis. citi group 7 billion. morgan stanley got away and bank of america $17 billion. that's really topping the list and it seems as though investors have become immune to these fines because now we didn't really see a big sell off in the
shares. it all seems to be in the price and they all seem to discount a very, very harsh regulator and hopefully this is it. >> i wonder if in 10, 15, 20 years from now we'll be looking back and saying i can't believe we were packaging xyz products now and thinking that they were safe. >> it's true. >> whether it just rumbles on. >> anyway. >> okay. let's move on to the next story we want to tell you about. china agreed a deal to buy ge's appliance business for $5.4 billion. jeff was pleased and confident that they'll help grow the business. the two companies announced a long-term strategic partnership which would see them cooperate in areas like health care and advanced manufacturing. shares off by half of 1%. higher by 1%. >> intel reported fourth quarter results that beat the top and bottom line but revenue grew by only 5% when analysts they were
anticipating double digit growth. the legacy, personal computer business also continued to struggle. it is making progress and move agoway from the slowing segment. now the share price this morning off by 4.5% almost. speaking to cnbc earlier t vice president and general manager said he remained positive. >> fourth quarter we did grow sequentially from the third quarter. we grew from the fourth quarter 2014 and we're going into 2016 with a lot of great solutions and a major transformation taking place in the industry. a lot of build up of infrastructure but obviously we're going into 2016 with some caution given the macroeconomics environment if you wish. >> let's get back to the asian trading session. stocks are down for a second consecutive day. sharp shares rising on the back of an improved bid. let's get the latest on the
story from the nikkei. >> yes. like you mentioned tokyo stocks were down for the second day but pucking the trend today was electronics maker sharp following media reports saying that the precision industry is to raid the proposed bidding price for the manufacturer. foxconn which is the largest supplier of electronic products was proposing to buy sharp for $1.2 billion but will raise the bid up to $6 billion. the news sent stocks soaring up more than 20% and it became the most heavily traded stock of the day. the $6 billion price tag is around four times the company's worth and is far overpriced and sharp on the other hand is in talk with a japanese government backed fund to turn around the business. they're anxious to keep valuable home grown technology in their
hands. meanwhile, shares fell 7% after it will report $190 billion loss related to its investment in a brazilian ship maker. the loss was expected but far larger than most frafts and came as an unpleasant surprise. that's all from the nikkei. back to you. >> thank you for that. now moving on we have a break to take. we'll be talking more about what's going on in the markets and we'll also be joined by the black rock chairman and ceo at 6:00 a.m. eastern ahead of the company's fourth quarter earnings release later on this morning. you're watching street signs. join us on the other side of the break.
europe seeing a halfhearted start to the final trade dag of the week. green gives the way to red. in asia the shanghai composite closes in investment territory. >> a huge fail comes back to haunt bhp as they take a $7.2 billion hit on on shore assets. >> general electric cooking up a deal to sell it's appliances business to chinese group hire for $2 billion more than what electrolux offered back in 2014. >> hi, everybody. welcome back. it's friday. you made it through the week. how good does that feel? let's take a look at our u.s.
futures. lower across the board for the s&p 500, dow jones and nasdaq. an implied open that's hefty to the down side for the dow especially at this point in time. it's still early though. >> actually we did rally on the u.s. markets in yesterday's trading session. this is because the energy sector saw a 4.5% advance on the bounce back in crude prices but it's all changed once again in today's trading session. risk aversion is back on the table. i want to show you what the european markets are doing. we're close to the session lows. the ftse 100 dragged down by the basic resources. that's the worst performing sector this morning in part because of the bhp story you heard there and the cac 40 lower to the tune of 1.2%. we're still close to three month lows. that applies to the u.s. markets but also to the european markets. let's take a quick check on oil prices. we have fallen back below $30 barrel for brent and wti.
for brent we're trading at 28.88 down by 3.24% on the day. wti crude is at 29.76. now both prices were sub 30 once so far this week. they haven't steadied below those prices so we'll see whether this time around they're going to actually stay below 30. so that's one to watch. also keep in mind that next week we'll see the resumption or the lifting of iranian sanctions. that seems to be spooking at markets at this point in time. i want to show you what the commodity currencies are doing. the australian dollar is getting hit hard once again. we're down 1.5% against the u.s. dollar. the new zealand dollar is also very dependent and we're seaing weakness in the african rand and canadian dollar. the canadian dollar falling to a 12 year low. 145.28. there's speculation that next week we could be seeing a cut by
the bank of canada. >> well, general elections are set to take place in taiwan on saturday against the backdrop of stagnating wage and gdp growth. polls suggest that the country could be heading for a change of leadership. paul lean has the story. >> young, disgruntled and frustrated about low wages and poor job opportunities. this is the group to watch during elections in taiwan this weekend. analysts say they're a key force that could help the opposition dpp candidate clench a decisive victory at the polls. >> there are many factors that make me realize i don't want to be governed by china including the lack of freedom oppenhef sp >> we need a president that can defend our sovereignty. >> ties between china and the dpp have traditionally been tense because the opposition party's charter supports independent but beijing
considers the island to be a break away province. she's looking for a strong mandate and wants to tap a surge in nationalism among the island e 's youth. >> this will have an impact on their future so all young voters must come out and vote. >> students were among the loudest voices calling for change in 2014 in the so-called sunflower movement. demonstrators protested the island's trade pact with beijing. their chief complaint that the governments deal would only benefit the he heat in mainland china and taiwan. but the president and the kmt candidate continued to stress that greater economic integration will only boost the islands fortunes. >> our common aspiration is that our economy can be prosperous. >> in the last 8 years we have built peaceful ties and a friendly international community. let's not change that.
>> but beijing's preferred choice isn't choose proving to be a popular candidate. her win is all but certain. but the future is less so where china is concerned. >> islamic state has claimed responsibility for the multiple bomb and gun attacks that left at least two victims and five assailants dead. sri is in jakarta and we'll get out to him in a few minutes once we establish that line. >> we continue to see these geopolitical events happening and not all that much reaction on the markets. also including on the actual market that's in question. like, for example we did see initial reaction yesterday and on the indonesian market as well but we're quick to become a bit more, i guess, used to these events right? at the moment? >> but that's also reflected in
the oil price. the fact that we're so immune to it because what we saw is no real geopolitical premium in the oil price so far. maybe on the first day of trading when we saw the tensions between iran and saw dudi arabi. but that was it. we're back to trading on sentiment and investment flows and not so much on the geo politics. >> absolutely. >> speaking of politics, it didn't take long for the 6th republican presidential debate to heat up last night. a much anticipated show down between front runner donald trump and ted cruz did not disappoint. moderators raised his recent natural born challenge as they defended his mother's american citizenship. >> under that theory not only would i be disqualified, marco rubio would be disqualified and bobby jindal and interestingly enough, donald j. trump would be disqualified because donald's
mother was born in scotland. she was naturalized. now donald -- >> but i was born here. my point. big difference. >> on the issue of citizenship donald, i'm not going to use your mother's birth against you. >> okay. good. because it wouldn't work. >> you're an american as is everybody else on this stage and i would suggest we focus on who is best prepared to be commander and chief because that's the most important question facing the country. >> and this really was just the beginning of the mud slinging during the debate. trump emotiobodied new york val. let's get out to tracie potts with more from washington. what's the verdict. >> so clearly the gloves are off between these two.
that seems to be the verdict. not clear that there's a winner last night but we know that ted cruz and donald trump are going to be mixing it up on the campaign trail as well as they did for the first time last night as expected. trump admitted the polls had a lot to do with this. our own poll going into the debate showed him widening his lead but in iowa there's been a challenge from ted cruz. trump admitted that. he didn't think it was a serious challenge but he admitted that's one of the reasons why he's bringing this, as they like to call it here this birther issue again. cruz and marco rubio had quite an exchange near the end of that debate on immigration. it's been a big issue in the campaign. rubio accused ted cruz of flip flopping on a number of issues. cruz responded that half of what rubio said just simply was not true. and then you had candidates like
john kasich that tried to stay out of the fray and weigh in on foreign policy and other issues but we now have only 7-on-the main debate stage. there were four in the undercard debate as well although rand paul declined to take part in that debate but the field is narrowing as we're just under three weeks away from the iowa caucuses. >> let's continue that discussion with the u.s. political analyst at ihs country risk. john, the two mr. cruz and mr. trump are trying so hard to disqualify each other. do you think it did move the needle at all? >> i don't think so. i think you're probably going to be supporting them now. both of them came out of the exchange well. he's totally right. no clear winners. there was probably a clear loser though and that was probably ben carson that stood in the background and didn't say much and complained to the moderators about the time he was getting.
everybody else did a pretty good job. >> what does it tell us about iowa? mr. cruz is leading going into iowa. is it a clear case that he's going to win it? >> i don't think it's a clear case. if we see anything in the last couple of days it's trump starting to creep up in the polls on cruz so it's hard to say. caucuses are always very difficult because you don't know who is going to show up and want to sit there for two hours before they cast their vote. at this point cruz is in the lead but trump isn't looking bad either. >> i know that we have some charts made up over mentions by name or by direct confrontation and it shows that cruz has been taking quite a bit of the heat or took quite a bit of the heat in the debate. on top of that the debate topics out there shows us that trump is still very much setting the agenda. >> absolutely. that's what you're seeing and that's what we have seen this entire cycle is that trump is dominating this debate. an election cycle where
republicans wanted this wrapped up early nice and neat that's not going to happen this time and a lot of that has to do with donald trump who is leading the field by wide numbers. >> the fight for new hampshire is on. the first primary taking mace on the 9th of february there. >> one week later. >> they put out some interesting pieces on the primaries and whether they're important and the pros and cons of the primaries. you could still argue they're not as important as what we think they are because voters that tend to vote there, they're the more extreme voters for whatever party. >> you're right. not only with primaries but also caucuses. look at the last few nominees for the republicans and neither one of them won iowa. at this point marco rubio isn't up at any of these states. so where does he get the traction? is its not going to be in iowa or new hampshire where does he come in first? nevada? later? does he have to wait until march? if that's the case it will be harder for him as the road gets
harder and harder going forward. >> stick around for a moment. the dust was still settling in south carolina and hillary clinton made an appearance on the tonight show with jimmy fallon where he asked about recent comments made by donald trump. take a listen. >> we had donald trump on. i don't know if you saw it? >> i didn't. [ applause ] >> i tell you what, he's a lot more obsessed with me than i am with him. >> you think so? you think so? >> yeah. >> we're talking to him and i asked him i said how do you think hilary is doing? and he goes, not good. and he said i haven't even started on hilary yet. and i was just wondering, does he intimidate you? donald trump? >> no. >> that's the thing. >> no. >> you just gave me the look.
yeah, no. >> that intimidated me. that look right there. >> if i'm so fortunate to be the democratic nominee obviously i'll run against whoever they nominate but if it's donald trump it will be quite the show down. yeah. >> u.s. political analyst at ihs country risk is with us and off camera you said she looks pretty relaxed. should she be relaxed given that mr. sanders is closing in. >> he looks good in south carolina and nationally she still leads but sanders is picking up the pace. we see it in iowa and national polls as well so there has to be a little bit of concern that something that was going to be a walk over is getting much, much more difficult especially as we see that sanders is out spending her as well as getting the grass roots organized in a way they can mobilize themselves on the polls. >> do you think republicans will be voting on different agenda
topics than democrats? >> absolutely. and you see it in debates all the time and the issues brought up in front of them. when it's a democrats debate. when they happen on saturday nights and the nfl playoffs they're always talking about inequality issues and employment issues, what is it about? foreign policy. all about obama taking away their guns. so yeah very much different agenda topics. these are placing to bases here and not to the general population. >> final question, i know it's a really tough one but who will be the presidential candidate for the dems and the republicans. >> i think clinton has a lot of backstop there. a lot of women will drift toward clinton. if hi to put my name out there at this moment she looks strong. as far as the republicans any direction. i could see cruz getting it. i think rubio as the establishment candidate he looks descent but you can't discount that trump is 15 points up in the polls. >> i'll try to hold you accountable to that. is bush out?
>> he's pretty much toast. it doesn't hurt to have $120 million in the bank but those poll numbers look stark. >> john, thank you so much for that. u.s. political analyst at ihs country risk. >> now switching to tech news, a brief outage in microsoft's xbox gaming network drew the ire of snoop dogg. the rapper called out bill gates to remedy the situation suggesting that he would take his business elsewhere. gates transitioned out of a day-to-day roll in 2008 but served as chairman of the board until 2014. i like snoop. are you a snoop fan? >> not really.
responsibility for the multiple bomb and gun attacks that left five victims dead. >> you would expect all of this uncertainty that thursday's attack threw up to really add to the very complex and challenging picture that emerging markets like indonesia are facing but over the course of today we have been doing reporting around this and i think it's safe to come to the conclusion that yes there is going to be an impact on the tourism sector but in the longer term i think indonesia is going to brush this one off. there will be a dent to investor perceptions but what a lot of people are telling us is that investors are encouraged by the fact that they believe the security apparatus and president has this problem locked down and contained. let me play you a piece of sound. i was talking earlier about
investor sentiment. this is what he had to say. >> initial impact yesterday was of course one of shock and horror. but by evening i think the strong sense from the international investor community and the businesses that we work with are that indonesia responded rapidly, professional, the police force seemed international standard. the president was on the scene within hours so that's enormously reassuring to the international business community. >> so i'd say the mood over here in indonesia and in the indonesian capital is one of defiance. it's one of resilience as well. in fact, if you have been monitoring twitter on this one of the trending hashtags when you translate it into english is we are not afraid so that sums up this mood. a very strong defiance in the indonesian capital and you can apply that to the business community as well and the economic conditions. we're also talking to the head of the american chamber of commerce. he echoed those views and he
said this isn't going to deter foreign investors. the case and point, the stock market it was karma today. the currency stabilize as well and a lot of economists we have been talking to still see growth in the region of around 5%. so it's not going to derail economic growth in southeast asia's largest economy. having said all of that this was an attack carried out by isis. this was the first major attack by isis in southeast asia and i think going to ward it's about the security climate. it comes down to this. it comes down to whether the authorities can determine whether this is going to be a one off attack or whether it's going to induce copy cat attacks and a longer term campaign of violence and destabilization in the emerging market. that's where we stand. back to you.
>> thank you. joining us live out of jakarta. now goldman sachs will be shelling out more than $5 billion to settle claims that it missold mortgage back securities ahead of the financial crisis. it will be slashing earnings by $1.5 billion. it's ceo said in a statement it welcomed the agreement. as well as a cash relief for homeowners and borrowers. sticking with the banks after better than expected fourth quarter results the focus is shifting to the next round of banks to see if they'll be continuing with the trend. wilfred joins us from the cnbc headquaters. we had a guest on yesterday saying the bigger banks state side are looking weaker compared to the regional banks. >> that's a trend to continue to
watch out for but most tend to be more retail heavy so i don't think it's just the absolute size. it's the type of banking they're exposed to and just touching on those jp morgan earnings, better than expected. also relatively upbeat commentary on the current market conditions. he seemed some what unupset by recent volatility. he did have potential commodity losses and that got focus. today the focus moves on to the likes of wells fargo and citigroup and that difference in the make up of the banks will be clear there and with that rate hike it will be interesting to see what their commentary is from the year ahead and what they expect from the fed and how that will impact the financial markets. another is black rock. those results come out at about
5:45 a.m. eastern. so toward tend of worldwide exchange we'll break those numbers and then for immediate reaction stay tuned for squawk box u.s. larry fink is guest host for the first hour from 6:00 a.m. eastern. so lots further indicators from the financial companies today and that's going to be very important for sentiment here in the u.s. retail sales are something to focus on today. it's pretty strong. they're suffering and the online guys are doing well. if this retail sales number is very strong might that help the likes of amazon and carolin i wish you all the best for your upcoming maternity leave. >> i'll be back and i'll be
sending plenty of pictures. and i'll tune in in the mornings or middle of the night for that matter. >> people have been writing in and saying is there a baby on board? >> there. >> it's funny though because if you look on screen you can't always see it. from the side definitely, you know. >> kwa hii can't hide it anymor >> let's have a quick look at u.s. futures. another down start to the u.s. trading session. the dow jones off by 252 points. the s&p 500 off by 27 and the nasdaq could fall by 80 points after we saw a little bit of a bounce back from the recent selling pressure in yesterday's trading session. the dow upheld by the rally and the energy sector saw a reprieve up by 4.5% but it's all changed in today's trading session again. let's move on to where oil prices are heading this morning. down both, brent crude off by 3.2%. wti crude 29.67. back below the crucial 30
handle. down 4.9%. you have to wonder what's going on today. is there a specific catalyst? i would argue no. more sentiment driven and investment flow driven and sanctions will be lifted as early as monday and that's still in the back of investors mind but crucially both brent and wti back below 30. >> we had, what, like 20% lower these contracts? since the beginning of the year give or take a little bit. some saying there's a bit of short covering in the market if you had really big positions out there and i wonder, a number of technical analysts say we go through these levels and maybe also not wanting to be too long over the weekend with all the important chinese data. which you'll be missing because you'll be focussing on more important things but a big week ahead. >> absolutely. it ties in with the next story. shares in bhp will be lower this morning after the company announced a $7.2 billion write down of its u.s.shale assets.
the largest ever impairment for the group as he layed the blame on the dramatic drop in oil prices for what he called a disappointing write down. the largest miner by market cap has not cut it's dividend since 2001 but that prospect is now front and center for investors. no surprise about it. this is a company that's been bought by in investors for its ability to continuously pay out a dividend and they pledged a stable and even rising dividend and that had confused a lot of investors. obviously you would take it if you can get it but now many analysts out there believe that bhp could be cutting it's dividend in half. citi came out with a note saying it's missing $4.5 billion from its capex targets for 2016 if it wants to pay out a stable dividend. this might be the big story. maybe it's not just many of the miners like bhp but also the likes of shale.
they haven't cut their dividend in 40 years. >> but many are saying they're going to continue with the dividend pay out or will be t last thing they will cut if they can get away with it and you have to wonder, are they just going to be squeezed out now? given the price of oil? because suddenly also it's an issue of whether it becomes cheaper for them to be able to import oil from africa or whatever that they import at really cheap prices as opposed to producing at home themselves. >> and you would think that defaults would continue to rise. we've seen some of them but the big wave maybe that's the big story. >> that's it for the show. >> yeah come back in and visit us after you become two. after you morph.
so carolyn thank you for this week and we'll see you in a couple of months then. >> yeah. >> that's it for the show as carolyn says. >> worldwide exchange is up next. you'll see louisa next week. >> bye. the flu virus hits big. with aches, chills, and fever, there's no such thing as a little flu. and it needs a big solution: an antiviral. so when the flu hits, call your doctor right away
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under pressure. global stocks ending the week as it started with wild swings. a sharply lower open on wall street. >> shares of the tech giant getting hit hard this morning as it's server chip sales miss the mark. >> ge selling it's alliance pliens business to a company for more than 5 beside. it's january 15th, 2016 and worldwide exchange begins right now. ♪ >> good morning and welcome to worldwide exchange here on