Skip to main content

tv   Street Signs  CNBC  August 29, 2016 4:00am-5:01am EDT

4:00 am
i'm carolyn ross. >> i'm louisa bojesen. here are the headlines. >> coalition partner had doubt at the challenging of the crisis. >> divisions over brexit. uk chancellor at the heart of a disagreement about access to europe's single markets. >> the governor of the bank of japan says he will act without hesitation on negative rates if the economy continues to miss the 2% inflation target. >> shares on the right track
4:01 am
this morning as the they win deals tore amtrak. welcome to the show. >> it's been six or seven months. >> unbelievable. >> gone very quickly. >> it feels like it's been a week, two weeks. how is it having a new little one? >> a bigger baby. beautiful, beautiful. best job in the world. one of the hardest jobs in the world. >> harder than this? >> beautiful. business confidence index falling to 101. little bit lower than the consensus. the overall business confidence falling to 99.4 vgs 103 in july and that is actually one of the lowest in the recent years.
4:02 am
we're still waiting for the spanish business confidence. we'll bring that to you as soon as we get it. it seems as though business confidence certainly has taken a bit of a hit. the august consumer confidence falling to 109. that's also below consensus versus a july print of 111. >> it's interesting because, of course, that's one of the things they're looking at from the u.s. whether or not business confidence is higher. when it comes to european markets here this morning, kicking off a fresh week with a slight bit of selling taking place on the european equity markets. most of these trading lower. somewhere in the region of 1% or so. some are closer to 1.5%. no trade in the uk. so it's a bank holiday. that carolyn is being celebrated all around my house at the knotting hill carnival. it's a mess. >> were you able to sleep last night? >> i checked myself into a hotel. i can't get in and out.
4:03 am
they close everything. all trains, taxis, buses, cars. nothing you can't get backwards or forwards. >> bank holiday. lots of you dancing in the streets. you have chemicals, construction materials and the auto sector in the region -- >> let's get back to the top story. ford is all about the fed. it's closer to -- speaking at the kansas city fed symposium in jackson hole. fed chair janet yellen said the case for an increase is strengthening. an exclusive interview with stanley fisher explains why he believes the rationale for a bank hike was building sniemtd we've had very strong hiring reports in the last three months. on average, as the chair said, 190,000 higher a month.
4:04 am
we have another report coming out next friday. that will probably weigh in our decision along with other data that may come in. so i think the evidence is that the economy has strengthened. the problem with this economy, there are so many numbers every day that you can -- >> that would solve our problem. >> you have to try and figure out what is the main thrust of what's going on in the economy. you can always find a set of data that will build a different case. that's the hard part. >> not a small set of data would be the gdp data. it's been fairly lackluster. an economy that is already lackluster. can't even manage half of that at 1%. is that the economy you want to raise interest rates? >> that's looking back and the numbers get revised very frequently. we want to be looking ahead when
4:05 am
we make this decision. not back. we're reasonably close to what is thought of as full employment. inflation rate this year is higher than last year's. it's still not up to 2%. but it's been growing. you ask what are the big numbers we look at. the big numbers are better than they have been for some time. then we're getting some feedback, some reinforcements from what's been happening on a monthly basis. >> two questions i know you love to answer. should we be on the edge of our seat for a rate hike as soon as next month and should we be on the edge of our seats for more than one rate hike this year? >> depends what stomach you've got for excitement. i don't really know. i think what the chair said today was -- yes to both of your
4:06 am
questions. but these are not things we know until we see the data. people get upset about us saying we're data-driven. i don't know what the alternative is. toss a coin or what? >> that's one possibility. >> it depends on what data we're going to get and how strong it is. because the picture is a very complex one. >> to be fair, we sat here, we talked in january and you talked about four rate hikes this year being in the ballpark saying that was an estimate, not necessarily a promise. do you feel like the fed is potentially behind the curve here? >> no, i don't think the fed is behind the curve. i think we're at a place where we ought to be. we've changed, obviously. as the economy was reasonably
4:07 am
weak for some time and furthermore, as inflation was very slow to rise. >> quick look at how the dollar is doing this morning. it is gaining strength against the euro, against the japanese yen, the pound. the dollar at 11175. >> the dollar didn't do too much in the wake of yellen's speech. a lot of people said fischer was the hawkish one, not so much janet yellen. let's delve into this. good morning, joe. thank you so much for taking part in this interview. look, la did you make of mr. fischer and mrs. yellen's speech in a lot of people said we're not any wiser after the jackson hole symposium. have you changed your views on how many hikes we're going to get from the fed?
4:08 am
>> i mean, not so much of a surprise that fischer didn't tell you whether he will hike once, twice this year just a couple of minutes ago. of course, the fed doesn't always either. yeah, the outcome of jackson hole was balanced and was very thin. this is not going to take currencies anywhere far. >> for dollar then, let's say we get one rate hike this year, whether that's september or december. is it going to be sell the fact once again for the dollar or how would you trade around it? >> i think any rate hike would support the dollar, of course. whether it's september or december or maybe early next year, just a matter of one or 2% move. i don't think -- i mean, the u.s. dollar has been in a range for rough live 20 months now
4:09 am
against the euro. it's 105 to 115. i don't think that that policy will be enough to kick it out of that range. that policy is -- it's not going to be too much of a surprise and the divergence between the u.s. and the eurozone is not going to rise. the distance will more or less stay the same. i can't see a big rally for the dollar at the moment. >> joe, good morning. it's louisa. the case has become stronger for a hike in september if you look at the actual fed speakers and their hawkishness and mark points out as well. lockhart, kaplan, george, the names go on. surely we must be pricing in more movement to come in the shorter term here than the hawkish stance that the fed seemingly has at this stage. >> yes. you saw a reaction on the
4:10 am
dollar. you saw it in the interest rate market. but in five, six, seven basis points. i think this is justified. it's not the fed will be slow. it can -- still possible to raise hike rates slowly. there's no pressure at the moment. don't want to -- the u.s. grove is really much depending on the consumer and the consumer is supported by the web. that means by a high ask prices. this is just too risky. whether the hike comes in september or december, i don't think it's too relevant. there's not going to be two hikes and it's going to be in a slow matter. >> joe, thank you very much for your time this morning. joe gore back, the head of currency and commodities.
4:11 am
50% of germans do not want angela merkel to stand as a fourth term as chancellor according to a new poll on sunday. merkel said her government was working hard to get other eu members to take their -- with 300,000 people expected to rife in germany in 2016. the deputy and coalition partner accusing the chancellor of underestimating the challenge posed by the refugee crisis. it's positioning ahead of next year's election. >> you know what, we don't know if she's going to run. if she had stated that intention, yes. in fact, she wanted to tell germany, the german people whether she was going to run in the spring of this year. then she pushed it out because of the refugee crisis because there was backlash from the csu. now it moves to next year. that's according to the report. >> move to next year in terms of when she'll say? >> whether she'll actually run
4:12 am
or not. >> long time out. >> let's move on. talks with the uk over brexit claiming europe would go down the drain if mishandled. the vice chancellor said britain should not be able to keep the nice things and taking no responsibility. she repeated the call for europe to take its time over the talks. teresa mae will sit down on how best to exit the eu. a number of uk media outlets are reporting that the chancellor philip hammond is at the center of a disagreement over access to the single markets. they want to focus on making sure that the city of london does not lose access to europe. may and several pro-brexit ministers are set to believe that britain will have to lose access to the single market in order to address immigration. as always, e-mail the show, get involved nice and early.
4:13 am
street signs europe at that's the e-mail address. also on twitter. >> carolyn -- or at louisa bojes bojesen. find us at street signs@cnbc. coming up on the show, can brazil's president survive as she goes on trial. an analysis when we return. don't go away. ught i was crazy to open a hotel here. everyone said it's so hard to be a musician, but i can't imagine doing anything else. now that the train makes it easier to get here, the neighborhood is really changing. i'm always hopping on the train, running all over portland. i ha to go wherever the work is. trains with innovative siemens technology help keep cities moving, so neighborhoods andbusines. i can ok 3 or 4 gigs on a good weekend. i'm booked solid for weeks. it takes ingenuity to make it in the big city.
4:14 am
4:15 am
hello everybody. welcome back. you're still watching street signs. the governor of bank of japan is ready to act without hesitation. speaking at the fed jackson hole -- governor kuroda said the
4:16 am
amount gdp is able to buy will shrink rapidly amid speculation that he might cut rates further into negative territory. dan murphy's -- not forgetting the japanese data coming out which could be interesting. retail sales as well. >> absolutely. japan certainly are the market to watch. hello to you both. just a quick recap of what we saw across the asian trading today. a lot of the major indices are closing out the session mixed with investors in our region. the prospect of higher interest rates after janet yellen comments at jackson hole. really outpacing the region today. recording this 2.3% gain. one of the biggest one-day gains i should say in three weeks. indeed a rally in the highest order. that weak yen giving export
4:17 am
stocks a boost. toyota, honda and nissan all making plus 2% gains. we also saw insurance stocks rallying. the nikkei as you mentioned was being well-supported by governor kuroda who used jackson hole to assure local investors that the boj would be approving murt monetary -- >> chinese mainland markets, little change: both indices closing out relatively flat. albeit be a modest gain. we were also focusing on the australian session today as well. the isx 1200 down almost 1%. 46-point decline at the major banks. all taking a hit. korea, indonesia, malaysia and singapore all looking like they'll close out the monday trading day lower. it's back over to you both. >> all right.
4:18 am
that, dan. set to face brazil's senate today in a trial expected to see her permanently removed from office. the senate is seen voting in favor of convicting the president who is charged with breaking budget laws. interim president would then take over full-time for the remainder of her term. the verdict is expected by wednesday. south africa's finance minister could be charged with -- according to local press reports. he may face a charge for allowing the early retirement of the head of the revenue service where he used to work. the gupta family plans to sell all of south african holdings by the end of the year. they've been dogged by allegations they've used close ties to win big government contracts. while the allegations have never been proven, the family says the decision is in the best interest of our business, the country and our colleagues.
4:19 am
a senior merger market specialist at nn investment partners in the hague. he joins us now. good to have you with us this morning. we're talking about the emerging markets and the bigger stories making headlines. you point out that indonesia and india are still leading the pack. what is it that's leading them to remain at the forefront of emerging market investment at the moment? >> the government improving their policy stance in general. we don't see that too much. i think india and indonesia are the two countries where you see convincing evidence of real structural change. infrastructure growth has been weak in most of the emerging countries in the past six years. >> with regards to south africa, with regards to the gupta family announcing plans to sell all of the south african holdings by the end of the year, that's
4:20 am
separate to what's taking place in the south african economy. what do you make of south africa given the volatility we've seen and coming from the currency markets coming from the -- >> south africa is an interesting case. it's sensitive to what happens with the global policy. particularly in the u.s. and europe. it's been benefiting from easy military policy in the last years. also last quarters. recently, getting more ready to hike again, the market under pressure. the key thing is really domestic now. policy risk in general. everything is happening now around the finance minister and maybe the risk that the fiscal policy comes with more pressure and so that's really the thing to watch. that has two sides as well. you could also say it's closer to the point that -- has to
4:21 am
leave. it's really a domestic politics to pay attention to. >> the overriding story overall is the first or the next fed hike. whether september or december. we just got back from jackson hole and still wondering when that next fed hike is going to happen. it seems they're complacent when it comes into inflows and equities as well. >> seen strong inflows and it has been to a large extent because of -- about the fed and the ecb and the bank of japan even. there's something else happening in the markets hopefully make the market a bit more resilient even if the fed hikes a bit earlier than expected. the markets have been so weak since 2010. improvements in gro
4:22 am
momentum. i will expect that to continue because of the easy monetary conditions. in the end, there's still the expectation, which i think is the right one, the fed, whatever they do, they will move gradually. if necessity hike in -- they hike in september, nobody expects them to be aggressive after september. if that's the case, the markets will be okay from that perspective. >> that's really surprising. you see emerging markets will be okay. it's pretty heavy -- when it comes to equities, they're trading at a one-year high. record inflows into bonds over the last seven weeks or so. do you not think investors will be -- you seem sanguine about the situation now. >> you just see that the immersion markets starting to improve. we have a big china risk, not
4:23 am
enough structural change in most countries. you see growth momentum i678 proving and capital flows not as bad. first it has to start changing. the markets have priced much of fed hikes already. the september hike is already priced for 30%. the december hike is priced by around 60% now. i think that the risk of a shock if the fed would hike a bit earlier is not as big as it was in 2013. >> martin, we often see big moves in emerging market to the downside if oil falls. this time around we haven't really seen that traditional correlation holding. why is it that we're not seeing more movement and more worry given the lower price of oil on these emerging markets. >> this is important point. we remember what happened last year. all prices came down sharply. i think at that time it was
4:24 am
really because people, investors thought that the declines in oil had a lot to do with emerging market growth. china particularly. now the oil price has been declining quite a bit, actually. but it was mainly because of supply. i think that as long as emerging market growth is improving, investors will not take this too negatively. it could still get worse. but for now, it's been digested quite well by the markets. >> before we let you go, let's round up your investment news. you particularly like indonesia at this point. you're still concerned about china. what are some of your other top picks and what countries do you want to stay clear of? >> yeah. so we like india and indonesia for structural reasons. some markets in latin america we like, argentina is a small one but that's an interesting one. colombia looks quite good at
4:25 am
this point. markets i would avoid are really the markets that are most sensitive of what happens with the fed. because if the fed would surprise negatively, we don't want to be in the market that are most -- places like south africa, like turkey and these markets have domestic issues which is very bad. and brazil is still a concern. the market has been very strong, but there i think investors got too excited about the potential for change, fiscal reform that we don't see happening too easily in the next few months. >> martin, thank you very much. martin bakkum at nn investment partners from the hague. the labor party is calling for richard branson to be stripped of his knighthood. they're saying he should lose the title as he's a, quote, tax exile who thinks he can
4:26 am
undermine our democracy. the labor leader jeremy corbin claimed he needed to sit on the floor of one of branson's trains due to overcrowding. branson's virgin trains released cctv footage showing corbin walking past empty seats. >> i do see that. >> on top of that, mr. branson was in a bicycle crash and twitter was all over that the end of last week. >> thankfully he's fine. >> i think he fractured his cheekbone. good bettering to you. hoping an inquiry into the retailer of bhs is shelved if he makes a voluntary contribution to his pension fund. news came over the weekend that retailer closed its doors across britain for the last time on sunday. sir philip has been criticized across the political spectrum since the collapse.
4:27 am
a sleep walker nearing the edge of the cliff according to the prime minister of -- he'll make greece's debt burden sustainable. they used an interview with the real newspaper to hit out at berlin's insistence on suffocating austerity measures. the liberal party backed -- the support boosts the chances of forming a government. does not guarantee him enough votes to win a crucial vote in parliament on wednesday. if he fails to win one of two votes in parliament this week, spain is likely to return in december for the third time in a year. third time in a year, wow. >> do you believe it? incredible. >> they're kind of doing okay. not having a government, i guess. >> the economy. isn't it propped up by low interest rates thanks to the ecb? >> yeah.
4:28 am
many would argue that. we need to take a short break. check out world markets live during the break. it's our blog. it runs throughout the entire european trading day. lots of good stuff on there. we'll be right back with more on street signs.
4:29 am
4:30 am
welcome to street signs. i'm carolyn ross. >> i'm louisa bojesen. >> germans don't want an r merkel to stand again after her handling of the migrant crisis. concerns over brexit. at the heart of a disagreement. >> the governor of the bank of jop will act without hesitation on negative rates if the economy continues to miss his 2% inflation target. shares on the right track as the chancellor company wins a $2
4:31 am
billion deal to build trains for amtrak. if you just tuned in, you are watching street signs. let's have a peek at u.s. futures at this early hour. the s&p 500 down. the nasdaq down by 2 and change. this after a jackson hole meeting. the dow was off by 50 points. only the nasdaq eeked out a modest gain. in terms of european markets, slightly underwater today. the zet rah dax off by -- we did get pretty poor consumer and business confidence numbers. roughly half an hour ago. that certainly isn't helping. keep in mind the ftse is closed today for the bank holiday. that's why trade across europe
4:32 am
is probably a little slower today. good morning. you're on the wrong side. free trade talks between the european union and the united states have essentially failed. gabriel added discussions have stalled because europe is refuse to go give -- amid the concerns that it -- speaking of cnbc earlier, the france's trade minister gave his take on why the ear to have failed. now, a senior international economist from -- he joins us live from paris. good to see you. with regards to the potential failing of these trade talks, how important would it be that we continue down the path of open trade agreements with regards to france's position at the moment?
4:33 am
>> well, i would say the latest data for france are quite reassuring. i agree with you, there are some structural issues and the closing of the trade, the fact that there's less and less trade activity, when you look at -- so the case for the u.s. and the world in general. you have the slowing down of world trade compared to world activity. that's quite a huge break compared to what you have witnessed since 1990. the impact on the french and colony will be substantial. i would say it's more second round effect. it's less so than germany for example with the exports accounting for approximately 25, 30% of gdp. a second round effect of the fact that with less world trade compared to activity you would
4:34 am
expect world -- to slow down. >> lauren, putting this in some numbers then. the second quarter gdp was on the disappointing side. if we are looking at -- failure, what does this mean for gdp growth in the near term? >> right. so q2 gdp which was confirmed at 0% is a disappointment. it's only -- so. it comes after a very strong q1 at plus 0.7%. q1 was boosted by several factors. for example, the sales of the -- tickets which boosted the household consumption and services. you have others come back to the normal level. gross is much lower. there's also the impact of several strikes and destruction in the refineries. oil refineries and that's on the
4:35 am
other hand would point to stronger q3. altogether, i would say this is on the downside surprise side. it doesn't really change our forecast, around 1.4% for 2016. this is not a very strong gross, but we believe it's slightly above potential gross. i would say fairly positive diagnosis is confirmed by the very sharp decline we witnessed in the french unemployment rate down to 9.9%. which is the lowest since mid-2012, which was confirmed from a different source, the national employment agency statistics for july where you saw another decline. altogether, it's a disappointment this q2 figure. it's not really challenging our percepti that there's a modest
4:36 am
recovery. now to come back to centered on guess with owe linked to a strong sector in terms of experts and -- obviously, what has been going on when you've seen especially -- the fact that there is a sharp decline in tourism in france. several people and companies are reporting around 10% year on year. that will materialize quite slowly and quite mildly statistical reasons considering the sources they use and the treatment that's used because of the series -- expect that to translate mildly in gdp. >> we have to end it here. thank you for that. senior international economist at axa investment managers. i have news coming through from conoco-phillips. the ceo saying he believes the
4:37 am
oil market supply will extend into 2017. cost cutting in the oil industry will also continue and no further dividend cuts on the cards. moving on, donald trump is set to make a major speechday. the republican presidential nominee is to clarify his position backtracking on plans to 11 million illegal immigrants prompting accusations by conservatives that he had gone soft on the topic. let's get out to tracie potts who joins us from nbc news on this. tracie, has he boxed himself into a corner? >> well, somewhat. because he's getting it from both sides now. from people on the democratic side, from his critics, who say that he never should have started out talking about building that wall in the first place. on the other side, those who really supported his tough immigration policy now backing off saying wait a minute, are you rolling back on this? trump has a big immigration speech as he describes it, planned for wednesday in arizona
4:38 am
for many months now has been in fact a couple of years has been the hot seat of issues for immigration because of their shared border with mexico. he's going to arizona to talk about immigration and he's going to have to explain what he's meant when he started out talking about deporting 11 million undocumented immigrants in this country and then saying he could work with people who were here illegally undocumented but they've been here for years and haven't caused any trouble. then he said, well, wait, first i'll have leave the country and come back illegally. a couple of different messages there and what he has to do is explain exactly what his policy is. >> tracie, we've been following the pharmaceutical development of mylan stateside and now frum also challenging clinton to release details, medical reports on her health?
4:39 am
>> well, donald trump's doctor more than a year ago said that he was in absolutely excellent health. the healthiest a person to ever run for president. then we questioned about that, the doctor said well, they kind of made me -- didn't say he was forced to say that. they were sort of waiting and needing to sign a letter indicating that it wasn't a thorough examination or a thought-out analysis of his health. donald trump is responding saying yeah, my health is fine and actually maybe we should ask more about hillary clinton. albeit willing to release more information. >> tracie, thank you so much for that. tracie potts from nbc news. coming up on the show, the battle escalates. we get the latest on turkey's military campaign in syria. stay tuned. we'll be back in two.
4:40 am
4:41 am
4:42 am
welcome back. the federal reserve is moving closer to raising rates. >> speaking in jackson hole, janet yellen said the case for a rate increase was strengthening. while vice chair stanley fischer says a hike could come as as soon as september. this is the report. >> after taking in the vista ten jackson hole, janet yellen took to podium said the feds are perhaps ready to raise the interest rates. in light of the solid performance of the labor market and the economic activity and inflation, i believe the case for an increase in the federal fund has strengthened in recent months. our decisions always depend on the degree to which the -- even
4:43 am
though the gdp report showed sluggish growth, above 1%. federal reserve vice chairman fischer in his cnbc interview dismissed it as a -- is reaching maximum employment. >> we want to be looking ahead when we make this decision, not back. we're reasonably close that who is thought of as full employment. inflation rate this year is higher than last year's, still not up to 2%. but it's been growing. so you ask what are the big numbers we look at. the big numbers are better than they have been for some time. and we're getting some feedback, some reinforcements what's happening on a monthly basis. >> or maybe two, fischer said yes if the data cooperates. it will be similar -- barring any signs of weakness in the
4:44 am
data. also a rate hike is left on the table suggesting growth could rise from 1% to 3% in the final two quarters. >> i think we'll have some strengthening in the second half of the year, yes. i think the economy is on a good track. i think the employment numbers show that. the inflation numbers are coming up slowly. they're below our targets still but moving in the right direction. >> among the gathered fed officials, there's fairly good agreement that rate hikes were gradual. steve leash man, cnbc business news, jackson hole. let's change gears. turkish forces -- territory held by isis and kurdish militants as both warplanes and ground troops continue to go up the syrian border town. we're getting flashes from the for men minister there. he says they're engaged in ethnic cleansing in northern
4:45 am
syria. they should immediately move east of euphrates and our common aim to clear the region of islamic state. let getoins us. this is getting messier, isn't it? [ inaudible ] are they trying to clear northern syria as they've been trying to do for a long time. they've been asking for this sort of crisis-free zone. everyone assumed this is not about the islamic state and fighting the islamic state and keeping them from moving into turkey but keeping kurds from standing in autonomous region perhaps. it's interesting if you look at the developments over the last several months. what have you seen? iran, israe. there's a kurdish problem for the iranians as well. they want to keep them contained. no matter how good the
4:46 am
relationship is between turkey and the krg, that doesn't stop them from bringing this conversation around to the islamic state -- also the rebel kurdish forces as well. >> what does it mean for u.s. forces and their access to the air base? what does it mean for the u.s. coalition overall? >> the question is right now -- ey is not only engaged in [ inaudible ] >> ethnic cleansing. going after groups that the united states is very much supporting for -- u.s. special forces have been working with them in their attacks against the islamic state for a while now. if there were -- that would implicate turkey in potentially taking out u.s. special forces. these are really big questions and quite tricky for a country that is a nato ally of the united states.
4:47 am
this relationship that they're developing not just with russia but iran as well, it's going to be very difficult to manage going forward i would think. >> the turkish military, the second >> yeah. remember, of course, they've had this great purging what we saw with the coup attempt. of course, they've been concerned about the fact that their counterparts doing things in syria are no longer part of the turkish military. you wonder about the lines of communication. >> the turkish foreign minister saying if germany takes the steps, they will allow lawmakers to visit the air base, which i'm assuming is in turkey. >> this is interesting as well. what's happening with the -- in. we'll allow travel if they meet the criteria and the turks are saying we won't be held hostage
4:48 am
to this maybe if we do or that. if you want us to keep ahold on the migrant situation -- a lot of heightened tempers and it will be interesting how the diplomacy works. >> with regards to the kurdish puzzle piece, because on one hand, the turks against the kurds, on the other hand are the kurds are also one of the major groups fighting isis on the ground, right? how do you -- they're also saying the common goal is still to fight isis. >> how dot turks play that delicate balance. >> this plays into the larger question of have we given up on finding stability. whatever price is the west really willing to allow other players like iran, like russia, like turkey now to go after what it is, their own geo strategic goals here. the west isn't going to commit more troops or commit more air power. they're really much more concerned with containing the
4:49 am
problem as opposed to solving the problem. >> thank you very much. talking about the latest going on with trading lower after comments over the weekend from iraq's minister that his country will continue output. if others -- cnbc was told that opec's freeze talks could be counterproductive. >> they will keep trying to hike up the price with verbal rather than physical actions. but i think that it's counterproductive because at some point the markets won't believe them crying wolf every three months.
4:50 am
at the end, i think it's counterproductive. some people believe there will be action. there will be action, probably in a couple of years when the shale oil story somehow has settled. >> they were upping the output forecast from the massive build. it says to me other players were it the russians, americans or in this case, norwegian interests as well, there's no interest in what they want and what works for them at the current price as well. a lot of other production coming online. is it enough for the increase and demand we're expecting? >> at the moment, the rate of demand is pretty high. we're talking probably around 1.5 million barrels last year. another 1.5 billion next year. this is higher than the production increase this year. if it keeps going, then at latest in the second quarter of the next year we'll have the
4:51 am
market balance. as i said, the action by the opec might become productive if the prices are higher than balance out will take longer because the shale oil companies not going to go bust and other producers like china, like mexico, russia are going to raise production. >> got so many opec meetings the last couple of months. all of them, pretty much all end with -- we didn't have an agreement in april, that didn't happen. didn't want to play ball. >>let say if the meeting goes ahead next month, it's supposed to happen and iran attends this time and says okay, we're willing to work on it but no one isdifference. because all these countries, opec producers are producing at record levels even if their
4:52 am
cutting won't make a big difference. >> the meeting is a red herring. in reality, nothing will come of it anyway. nobody is interested on an individual basis to cut at this time. iran, there is some understanding with where they're coming from. we want to get back to where we were. but we're willing to talk and be part of this. we're not saying no. >> on their terms. then you look at the many of them coming on board significantly with -- [ inaudible ] libya is still coming back. iraq as just mentioned. nigeria to some extent. u.s. shale -- we've gone from 50 to 50 40 back to 50 again. that makes a difference. >> we're talking about the fundamentals. how about we talk about the dollar impact. if we see one or two fed hikes this year, the dollar will rise. what does it mean for oil?
4:53 am
>> yeah. just a couple of months ago as well. we were talking about whether or not oil would be the driver of equities. where equities are going. we're flipflopping towards are we looking towards oil or other moves. we're settling in, we can handle oil where we are now. we were discussing the other day about isn't it okay that oil prices are where they are now? they've been a lot lower and certainly been higher. >>hat's true. >> we've had $150 oil in the past. aren't we okay at the current levels where we are? >> is that the new normal? that's the question. we heard comments from the ceo of conoco-phillips saying there are going to be more cuts. at least no more dividend cuts. this is what investors have been focusing on. any investor who held energy stock has been burned badly in part through the dividend cuts and the price declines. let's get back toulouse a looking at the markets. showing you what we're seeing on this bank holiday
4:54 am
monday in the uk at least. we have no trade out of ftse. all of the rest of the european equity markets are indicated lower pre-trade. we opened on the slightly negative footing this morning. we're seeing a little bit of selling taking place. the dax off by over a half a percent. the cac off by a half a percent. we're going to be looking towards friday payroll day. that's upon us once again. especially given the hawkish noises that we've heard from the fed following the jackson hole symposium there with some indication coming from the policy makers that could be still looking at a september hike. the payroll date is going to be very key this round. the sectors and what we're seeing in trade this morning. as well to recap, selling across the board as well. the best performing sectors out there. insurers, food and beverage and health care relatively flattish at the moment.
4:55 am
construction and material lower. utilities off by a half a percent. and auto is leading the way lower by just shy of 1% carolyn. >> catch you up on other news. marathon is reportedly growing investments across ireland, france, germany and the netherlands. according to the financial times, the $13 billion debt and property specialists bets those markets will benefit most from companies leaving london in the wake of eu referendum. property is a better retirement than a pension. this is according to the bank of england's chief economist. comments to the sunday times newspaper, andy holiday expected house price toss continue, quote, relentlessly heading north unless the supply crisis was addressed. former pension's minister denounced it as irresponsible. >> the bigger question as a pensioner, can you even afford a house no london right now? you got to play the duty first.
4:56 am
it's better to stick to your pension at least. >> doesn't cost you as much. >> initially. >> but also property is a better investment for your pension if property holds up. >> we always assume, we've had this million percent rise in property, it's going to continue forever. we saw a a crash in the uk in the '90s. who knows? that might happen again. it's interesting also, reading an article about the housing market in the states and whether or not we're in for a couple of surprises given that we've kind of controlled and regulated all of these areas in the financial sectors. but not quite so when it comes to the bigger mortgage lenders out there. you still have the fannie mae and the freddie mac's and the way that they prop up the housing market too. this article was arguing we need changes there to prevent troubles. >> what would you do, pension or a house? >> you can't live in your pension. but you need your pension, right? if you look at it from the
4:57 am
perspective, you need a roof over your head, maybe a home. in terms of the payments, stamp duty in the uk, we pay all these duties when you buy and sell homes. huge. absolutely huge. >> affordability is key here. >> the average home is nuts, right? >> what would you do? >> pension probably. >> that's also northern european. i tend to think that. we're taught to save from the minute we're born, right? quick look at u.s. futures. we're expecting them to open slightly higher. that's turned around in the last half hour. that's it for today's show. i'm carolyn ross. >> i'm louisa bojesen. be back tomorrow same time, same place. thanks for your company.
4:58 am
it's a very specific moment, the launch window. we have to be very precise. if we're not ready when the planets are perfectly aligned, that's it. we need really tight temperature controls. engineering, aerodynamics- a split second too long could mean scrapping it all and starting over. propulsion, structural analysis- maple bourbon caramel. that's what we're working on right now. from design through production, siemens technology helps manufacturers meet critical deadlines. i think this'll be our biggest flavor yet. when you only have one shot, you need a whole lot of ingenuity.
4:59 am
5:00 am
good morning. the dollar strengthens following interest rate reassurance by the fed. >> employment set to dictate trading thoney and your vote wih one month to go until the first presidential debate. trump still stirring things up on twitter. it's monday, august 29th, 2016. worldwide exchange begins right now. good morning. happy monday and welcome to worldwide exchange. i'm


info Stream Only

Uploaded by TV Archive on