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tv   Bloomberg Markets European Open  Bloomberg  February 14, 2019 2:30am-4:00am EST

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>> good morning. welcome to "bloomberg markets: european open." we are live from our european headquarters in london. i am anna edwards alongside matt miller, who this morning is in frankfurt. matt: that's right. stocks trade mixed. european futures trade higher as a germany narrowly misses falling into a recession. the cash trade is less than 30 minutes away. ♪ anna: time to talk.
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president trump considers a 60 day delay to china tariff increases. futures in the u.s. and -- feel the love. credit suisse beats the streets on the top and bottom line, with the lender maintaining a more or less flat --. we spoke to the ceo, tidjane thiam, earlier. >> we are going to outperform on a relative basis. -380: breaking up with the a airbus ascribes its slow selling -- itsmbo -- airbus slow selling superjumbo. matt: i am of course here in frankfurt because of commerzbank earnings came out this morning hader than that street anticipated on the bottom line.
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the sales growth looks a little slow and the ceo is going to have to revamp his turnaround plans to try and get some growth. , am going to talk to the cfo stephen engle's, 11:30 a.m. london time, 12:30 here in frankfurt and get the download on the numbers -- down low on the numbers and ask him some of the necessary question regarding deutsche bank and a possible merger. let's take a look at the futures this morning. there is optimism around trade talks that's helping to push futures a little bit higher, although not much. some of that o optimism could be priced in a little bit. cac futures up 0.4%. what do you see on the gmm? anna: i was just thinking that a buyout -- thinking that -- between german banks would be the ultimate love story.
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overall the picture across the asian equity session was a fairly mixed. there was positivity around the some of the chinese trade data and these comments that may be trump will give another 60 days for these talks on trade. we are kind of mixed, in limbo waiting. u.s. and european futures pointing higher. we see the australian dollar catching a boost and the yuan caught a boost in china because of that chinese traded data. germany narrowly avoided going into a technical recession. quick look at what's going on in commodities. brent crude and it wti moving higher this morning because comments from the saudi's are being seen as underlining their willingness to continue cutting back on production despite some of the stockpile data out of the u.s.. trump is said to be considering pushing back the deadline for higher tariffs by
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60 days. he has already indicated his willingness for letting the date slip if the countries are close to a deal being made. this as top of local trade talks resume in beijing. president has indicated he will need to meet president she before agreeing to a deal -- president xi before agreeing to a deal. chinese export numbers surprisingly recovered. outbound shipments rose just over 9% from a year earlier, while inbound deliveries slipped. there was a trade surplus of $39.2 billion. investors -- an investor who gain prominence for his defense of donald trump is an hot water of his own. he said it was a mistake to judge saudi arabia for the murder of journalist jamal khashoggi. he quickly backtracked, apologizing for his own words. his comments echo previous
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statements by president trump. theresa may teixeira brexit planet back to parliament -- theresa may takes her brexit planet back to parliament -- brexit plan back to parliament. lawmakers in her own party are said to insist that leaving the block with no deal must remain an option. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. bloomberg. anna, met. -- matt. schneider electric will review assets accounting for as much as 2 billion euros of ales as the french maker of power distribution limit looks to shed underperforming businesses. joining from paris -- as from paris on the phone is emmanuel babeau, the deputy ceo and cfo of schneider electric. you want to review your asset portfolio over the next three years. you say you want to make it more
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balanced geographically and in other senses. where does it look unbalanced to you? emmanuel: i think we really want to keep shaping the strength of the portfolio. we want to be playing in the future where we are a leader where we make a difference. if we identify businesses where we are not having this differentiation, where we are ,ower performing, lower margin these -- that's will really -- that's really what we mean when we say improving business. the: what is the effect of yellow vest protests on schneider electric? emmanuel: i would say the direct affect is limited. i'm not sure that a lot of things are being slowed down or stopped. would beay the effect globally on the french economy that could be slowed down by the yellow vest impact, and then we would be impacted. let's see what happens in
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u.k. portfolio? you of course purchased the industrial software maker last year, i think it was. what are your thoughts about assets and the u.k.? emmanuel: no, we own a majority stake in the company. we are just super delighted with this operation. no, there is no particular u.k. asset on the block. we are certainly committed to the u.k.. we will attempt to the outcome of the brexit, but there is no change in our planet for the u.k.. plan for the u.k.. matt: what about the industrial automation business? emmanuel: we have north of the 6 billion business and -- and industrial automation -- in
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industrial automation. it has been growing very fast. we really have a unique digital proposition and digital information. we certainly intended to keep growing the business. the outlook is super promising. anna: how excited are you about emerging markets? tell us about the chinese expectation, but also india. you have been buying assets there of late. emmanuel: yes. we also have a very positive view on emerging markets and we have been doing here fantastic progress in the past years. it is close to 45% of our total business. that includes china. china has been growing close to 50%. india is double-digit growth. these are obviously countries where we are growing very fast, probably gaining share. the future is very bright. matt: how fast and how much
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share? can you get more specific, especially regarding china? emmanuel: sure. china has been starting 2018 growing north of 20%. now we are facing -- everything was growing very fast in 2018 in china. we expect some part of the market to slow down. -- quite dynamic. certainly nonresidential and residential. when it comes to industry, we see some of the industry could be very dynamic, food and beverage, water, wastewater, mining, oil and gas. all of these sectors should continue growing nicely in china in 2019. anna: a slightly more personal question perhaps. i understand the french government has plans to require
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top executives of french businesses to have tax residency in the u.k.. i think you are based in london and maybe your ceo based in hong kong. is this something you are contemplating? emmanuel: anna: i am actually back -- emmanuel: i'm actually back in paris so it's not a question for me. i spent four years in london at the time of the acquisition and working on a visa, but i'm back in paris so it's not really a question for me. matt: all right, well, thank you anyway for joining us. a letter fascinating information from you. emmanuel babeau, deputy ceo and cfo of schneider electric. up next, we will speak to the , tom bladesnger erdoga after the german industrial company says it plans to turn a profit this year. we are available on dab digital radio in the london era. tune in. this is bloomberg.
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♪ anna: welcome back to the european open. 17 minutes to go until the start of the cash equities trading day. we are expecting to be a little bit higher at the start of the european trading day. there is some positive news around trade. our colleagues reporting that the trump administration is considering an extension to the trade conversation and deadline
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with china. we will see what that delivers. the asian session more mixed. let's get a bloomberg business flash. calling -- pulling the plug on its slow selling joubert -- superjumbo after only 12 years in service. it will seize deliveries of the double-decker jet in 2021. emirates, the only major buyer, cut its order. the ramp up of other models could upset some of that. the french government is said to be considering delisting energy giant. it would be the first step in a corporate restructuring to address the challenge of replacing the country's nuclear power fleet. the government owns 84% of edf. under the changes it is likely to get taken into apple state ownership.
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-- losses at credit suisse are eclipsing gains in the what management business. they posted a larger than expected loss in its global markets division but the bank saw less outflows than its competitors. ceo tidjane thiam says it geopolitical concerns are making him nervous. >> i'm always nervous. yes. well-known, whether it's the u.s.-china trade discussion. >> that is your bloomberg business flash. matt and anna? matt: thanks very much. debra mao in hong kong with your business flash. i want to quickly just remind viewers why i am here in frankfurt. commerzbank has come out with earnings that beat the street but says it will not meet its goal to cut jobs. headcount targeted -- was buteted to 36,000 by 2020
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now it looks like it will be more than 38,000. that is a target that commerzbank is going to miss and revenue is going to be fairly slow to grow as well. is going tohe ceo have to adjust his turnaround plan to some extent. i will talk to the cfo later this morning and asked him what the new plan looks like, or the ifered plan looks like, and he thinks they can still make it before being forced into a merger with a crosstown rival, deutsche bank. nejra: that -- anna: that is certainly a big talking point, the potential for consolidation in the german banking industry. let's talk about something that is not getting together, but breaking up. that is airbus with its flagship project that was the superjumbo. euros,st of 463 million they have made what some lenders have called -- investors have
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called the painful decision to cease production of this aircraft. they are going to stop and they put a bit of a timescale on that, putting a-380 into retirement essentially. they will have to announce the loss of a major new order of wide-body a-350's. that order has been reduced. over in the take cockpit over at airbus. we was speaking -- be speaking to the management -- we will be speaking to the management at airbus later on. revenue roseer's by 4% in the fourth quarter to fall in line with analyst estimates. they also posted falling profits but said it will post profits for the full year. joining us on the phone to talk about earnings is thomas blades, the ceo of bilfinger.
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let me ask if you're happy with the numbers as they stand in the fourth quarter? mark: yes, -- tom: yes, i am happy. i am very pleased with the results in the fourth quarter, but also for the year. anna: ok. the number that we were looking , q4ere was the q4 revenue revenue increasing 4%. i think the average estimate was for 3.11. let me ask you a little bit about what you are seeing in the german economy at the moment. the german economy, we have just had confirmation this morning, has narrowly avoided falling into a technical recession. tell me about your experience in germany. how much lower does it seem -- a slower does it seem -- how much
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slower does it seem? thomas: germany is our home base. we are seeing stability, because when we look at our key industries, oil, gas, energy and emissions, petrochemicals, these are all growing industries. we have shown improvement year after year and we have visibility. we are quite confident in being able to maintain growing topline and growing bottom line, also in germany. to look back here as well, thomas, at the numbers i have in front of the. it looks like your earnings before interest, taxes, and amortization jobs 8% to 38 million -- 37 million. looks like in the quarter you had a net loss of 10 million euros, bigger than the net loss you had in the same quarter a year ago. and my seeing these numbers wrong? thomas: you are seeing them
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correctly, but we tried to focus on the adjusted ebitda. matt: you are correcting me saying you have improved profit when in fact you have lost more money this year than last year. most people would not see that as an improvement. thomas: i guess it depends on what you guided. itdauided the adjusted eb martin between 50 and 75. -- somewhere between 50 and 75. years, we are calling it a -- we're quite happy with the results. anna: you are happy, thomas. conversations like at the moment with one of your big shareholders? what do they say about the strategy? thomas: they are pleased but
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satisfied. they see progress and when we unveiled the strategy in february of 2017 we said it would take a number of years and phases and many small steps. we are actually progressing through those steps. we give ourselves a tech market as we checked each box going forward. i can understand that they committed a higher share price than where we are today. as i mentioned, pleased but not yet satisfied i think would describe their mood. matt: thomas blades, the ceo of bilfinger. you can interpret these numbers a number of different ways. you are satisfied with your progress and say you will continue with progress going forward. we are minutes away from the open of stock trading. up next, we are live in geneva to get the latest on credit suisse. the swiss lenders trading unit has posted a bigger than expected loss.
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we will hear how tidjane thiam feels about that. this is bloomberg. ♪
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♪ anna: good morning, everybody. 54 minutes after 7:00 in london. francine lacqua is live in zurich fresh from her discussion
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with tidjane thiam about the numbers out of credit suisse. we are going to see how the shares opened in a few minutes time. what were your major takeaways? francine: i think if you break it down, it's a little bit of a mixed bag. he is quite cautious on trading in the future. he talks about the relationship between the u.s. and china, brexit, but overall if you look at the breakdown, so wealth management holding up, especially when you contrast it with some of their peers. trading lost money. it is very clear that he said he was not disappointed. he was disappointed maybe at the margins but he says it's -- of the trading unit. he says the fourth quarter was a way of stress testing the bank and making sure it could work under very stressful conditions. now we are trying to figure out exactly how he is going to grow the bank from here and whether he can address some of these trading losses. matt: we will see how the shareholders phil about his
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outlook best field about his outlook -- feel about his outlook. coming up, it's the market open. futures are pointing to slight gains this morning. ♪ this is bloomberg. ♪ anna: a minute away from the
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start of cash equities trading. let's have a look at the markets. tell you about some breaking news, we have heard from the activist investor elliott with regards to his holding gdp, and energy business in portugal. they have set the bid they have received on the three gorges product is not enough for shale or despaired -- shareholders. this is our market setup, the euro, .2% stronger despite the gdp in german flatlining, though they didn't escape a recession. -- did escape a recession.
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oil making gains. picture out of china fairly mixed. futures in europe suggest we will see a little bit more strength at the start of the trading day. .7% higher. the ftse 100 a little more muted in the gains we expect to see. if we open up the markets, 8:00 in london for 9:00 for matt miller in berlin. let's have a look at the european markets, a lot of earnings to factor in. the banking sector very important, numbers out of agricole and credit suisse. we also keep an eye on what is going on in airbus, we have announced they are going to after much deliberation, a long-running painful start. they will start production, so we will wait to see how that opens. this is the puncture -- picture
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on the ftse. i mentioned some highlights, but there are plenty more beyond. the sector picture as a way for opening prices in paris and frankfurt. energy is a weak spot, but despite the fact we see oil , sorry,oming down despite the fact that oil prices weakness onave the the stock. health care is an underperforming sector. utilities not doing too badly. screen, iat the mov can see that on the stoxx 600, we do have some stocks moving higher. only 105 moving lower. i can see that the news of airbus has been taken well by the markets. could they convince the market
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that this was the kind of aircraft that would work for them? it became something of a narrative over many years. that they have finally pulled the plug on that project and i can see that airbus is the biggest gaining stock, up by 5.3%. schneider electric also up after they had numbers out. ,e spoke to management returning money to shareholders and doing a strategic review. higher.moves can seeownside, you coca-cola and telemachus, the biggest fallers on the stoxx 600 including commerzbank, that went up by 4.9%. some slight gains here across european markets and in the u.k.. washington is said to be considering postponing
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chinese tariffs for 60 days. the world's biggest economy is trying to negotiate a solution. joining us now is ben jones, senior multi-asset strategist at state street. i want to start with trade, because we do everyday, but really, bank earnings seem front and center. european banks have been a huge disappointment. set any different in 2019? not, that is where banks -- we continue to avoid. there are many issues, key among them is that the yield curve remains flat keeping a lot of pressure on margins. even when you do lend, which is small, they are not making the money. so the loan growth we're seeing is very weak. that is why we are still seeing these rather underwhelming
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numbers coming through from banks. the other point i would point out is not exactly new or exciting. is ifs more controversial you look at the valuations of european banks, it a lot of people will tell you that that ictor is attractively valued would disagree with that sentiment. one of the more expensive places within the market. when you compare to these relative multiples or even comparing prices to root multiple spirit it is not -- multiples. it's not as cheap as people would believe. anna: let me ask you about the trade front and how much excitement we should feel. this is more than trade, magistrate and tariffs, but all of those other topics linked. intellectual property is a stumbling block, but you think there could be room to make
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progress. >> i would say that this is probably the easiest part that they could come to some form of agreement on. take a little bit of history. from thewas stealing brits back in the 60's and 70's, the brits stealing from others. japan was stealing in the 70's and 80's. we go through these cycles feeling commercial property china certainly has stalled for property over recent years, but it does not necessarily need to. , theirnese companies technology is as good, arguably, then a lot of u.s. companies. quite easily turn around and say we are not going to steal intellectual property there are going to put in clear, well-defined rules. we're building out a lot of roles in the domestic market. and if we do not need to do that anymore, trump to turn around
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and say look, i've gotten china to cave, to agree they will not steal. anna: we will see if that's hopefully -- how things play out. matt: first, happy valentine's day, then -- ben. i want to ask you what asset has captured your heart, when your head is saying this is going to end in tears? very appropriate for february 14. >> absolutely very appropriate this morning. i was trying to think about this on the way over. -- in terms of what i would answer my clients about, to be honest, we have a very well-defined process. but i hope my wife is not watching this, perhaps, but i did get sucked into one of these lustful affairs in 2017, like a lot of people, on cryptocurrency and bitcoin.
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i have to say i still have not completely come out of that, from a personal perspective, despite everything telling me i should not have gone on -- in. i'm probably not the only person who will give you that answer today. matt: for sure. in other parts of the you talk to clients about, thankfully for them. my first thought was carmakers. i love big, internal combustion engines and i want carmakers to come back. but it is not clear there are going to, there are a lot of issues including demand in
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loser from last year, can be a winner this year? >> it depends on where you are looking. in europe, i don't think so. like you, i am a bit of a petrol head. that might be another one of my poor investments. on the european side, there are a lot of headwinds. thinking about the trade situation, you have to start thinking about the second order effects between the trade deal in china. if the trade deal does get sorted, there will be risk to assets, but one of the losers in the long term would be the european car manufacturer. there are still very much focused on the internal combustion engine as opposed to a lecture, ev type of approach. imports takes more u.s. and the u.s. imports from china your,l, perhaps it is perhaps as the carmakers. carmakers are probably one of the most difficult sectors to value because the volatility in earnings we have seen over recent decades. i don't think they are all as cheapened, as unloved as people would have us believe.
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matt: all right, you will stick with us. benjamin jones, state street senior multi-asset strategist. up next, we bring you the stocks of the move, including commerzbank, a german lender up this morning after fourth-quarter results of the estimates by a solid 40%. i will speak to the banks cfo later this morning. this is bloomberg. ♪
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anna: welcome back. a positive trading day, the stoxx 600 up by 4/10 of 1% -- .4%. annamarie has the individual stock movers. a lot to choose from. >> certainly a lot. airbus up to the upside more than 5%. their earnings be highest analyst estimates on top of the news they are scrapping their jumbos as emirates cuts the book. commerzbank to the upside as well, there never income beat estimates. we're looking forward to matt miller speaking to the cfo there. 3%,astrazeneca up more than
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they're also saying new drugs will boost profits this year. i'll be talking to the ceo of it later. what analysts want to know is how they will restructure the company. they have been talking about this plan to do a cancer unit and everything else. anna: thanks. plenty of good interviews to look ahead to. germany has narrowly avoided a recession. europe's biggest economy stagnated at the end of 2018, trailing its peers. jones, senior multi-asset strategist at state street is still with us on set. we have got a charge of the german growth story under pressure, narrowly avoiding a recession. we spoke to a ceo who feels robust. -- who said it feels robust.
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how concerned are you? >> this is the interesting thing. last, all of the talk was about a u.s. recession. the u.s. was, in our view, a long way away. in europe, you are right on the cusp of it. is there, germany narrowly avoided a recession. economicu look at the and you do, that is. europe is still the biggest concern. it is also where we don't see the degree of pessimism priced into asset markets, despite some people arguing european equities are treat. -- cheap. worry about domestic growth in europe is a big concern for us. again, it will probably come on some of the earnings numbers. where do you see more of the
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disappointment? it domestically focused company's most of those other areas, luxury goods, for example, have much better numbers. the domestic story in europe is a key moment for us. matt: germany is running a budget surplus right now. there is no shortage of things for the country to invest in. poor, westructure is are stuck in the 90's in terms of digitalization. payment,es mobile everyone still using cash. chance you think germany will loosen the purse strings and start to spend the money? i think it certainly should but having been in germany over the beginning part of this
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year, i would very much echo your sense about the need to see that infrastructure spend. with markle stepping down, that is a longer-term play. to beeviously, perhaps potentially started to open up the loosening of the strings. there certainly is more talk and rhetoric. if that does come to pass, it will be positive. mi confident it is going to happen? i am not sure just yet. have a very fiscally responsible mindset a will take an awful lot to break them out of the mindset. if it does happen, it will be a clear positive and much needed. to talk interesting about when the next recession will be in the united states, and yet here we are with european data. if not recession, it looks weak.
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matt should be aware that the cfo says they expect the economy to be resilient. matt will be taking them a little bit later on. stay with us here on the program. let's have a look at the sectors on the move. insighta little bit of into what we have got. in total, it overall, the aggregate picture is a strong one for european equities. it is the food and average doing pretty nicely. numbers out of nestle earlier on. .25%. is up by industrial goods also higher, along with utilities. up next, we hear from the credit suisse ceo on the day that its trading units has posted a bigger than expected loss. this is bloomberg. ♪
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anna: welcome back, 20 minutes into the trading day. the banking sector earnings still coming. credit suisse is still confronting a similar problem that plagued early times. posted a worse
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than expected fourth-quarter overshadowing gains that this wealth management. francene asked of the ceo how he plans to grow the bank. nervous, but it is my job. but my clients are nervous. the uncertainties are well-known, whether it is the u.s.-china trade discussion, brexit. manner,, etc.. we as a bank do not control the environment. all we can do is the agile. supporting different needs for the clients at different points. good.alogue is very we have a strong pipeline. we're both in dallas two weeks
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ago, i saw a lot of clients came to see. it is a contrasted image. he still see quite a bit of confidence in the sector. dialogue, strong pipeline, the shutdown did not things,ple want to do not necessarily in the position not to. >> will it get worse as the euro goes by, or do you see a u.s.-china trade, once the dispute is resolved, that actually markets breathed a sigh of relief? >> i wish i knew. i don't have any particular insight. the discomfort of market participants comes from the uncertainty. the best analysis possible cannot give you an answer to that.
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low-cost, strong capital. we are positioned so we can stand downturn. >> if you look at your share price, can only recover when you have normalizing interest rates? >> it can recover, it is going to recover. i want to put a time on it, but you seen the effects of the results. yes, we need a tough restructuring, but we are well-positioned. i'm convinced we're going to outperform on a relative basis. m&a is positive. our revenue is up. the key indicators are going in the right direction. to keep on going, it will be reflected in the share price. and i hate to say this, but our valuations in terms of the price-to-book is sitting above many, many european banks today. cleaning up the balance sheet has caused a lot of value.
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in terms of what the market thinks, we are trading at .8 of value. losingbad we're still billions. as a loss is a limited, we track towards are 10% are o.t. target your -- rot target. that was the credit suisse ceo's speaking with francine lacqua. ben jones is still with us. we talked about banks, mentioning the valuation. francine also asked about the interest rate environment. what you think about the situation european banks are in from the perspective of interest rates? the ecb certainly does not look set to raise rates this year. >> no, absolutely not. the condition certainly are not there for the ecb to raise rates. it is slightly interesting, in --t, the ecb
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much, much weaker. inflation is rolling over and has to do with oil prices. but when you look at core inflation, that is preceded -- nonexistent at the moment. any kind of upward pressure on bund yields is absent. and then you have the ongoing political situation with brexit, with italy, with france as well, all lining up to keep it safe haven bond relatively well. probablyeurope are likely to stay low for some time. anna: and here is a topic i know is close to matt's thinking. i got a chart, member rate returns.
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it shows the worst performance over the past four quarters. bank,zbank and deutsche both at the bottom of that's created. consolidation has been talking about for his long as i have been talking about financial markets is this the year it happens? >> i think it is probably getting close. anna: and can you invest without that happening? >> i think you probably needed. -- need it. is it the sector to invest in before you get that absolute not -- before you get that? absolutely not. you get these big structural problems like interest rates. but looking at deutsche, metro bank, there's also a lot of idiosyncratic risks within the companies, which makes those types much more difficult. then jones, a state street
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senior multi-asset strategist. thank for joining us, up next, goldman. their responsibility for the 1mdb scandal. we talk about that next, this is bloomberg. ♪ this isn't just any moving day.
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trading day, let's get your top headlines. time to talk. trump considers a 60 day delay to china's tariff increases. european stocks and u.s. futures feel the love. going strong, credit suisse gains after fourth-quarter earnings beat the top and bottom line. the ceo tells us the outperformance will continue. >> i'm convinced we're going to outperform. we look at these numbers and see the signs of it. breaking up with the a380.
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airbus stocks surge as they scrap their low selling superjumbo jet after just a dozen years in service. good morning, and welcome. frankfurtmiller in today to interview the ceo of commerzbank, alongside anna edwards at bloomberg's european headquarters in london. for the banking story, you are there to cover it. that looms large. elsewhere, some other interesting earnings stories. these are the stocks that are doing this in europe, and we sorted by points, instead of by percentage, bringing out the biggest influence on the overall market. an honest heavy earnings day, that seems appropriate nestle, a big weight pushing the food and beverages sector. they are putting her up the cell, that is a lunchmeat business for anybody who does not know.
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3.9% higher. up by 5.3 percent after scrapping the a380 project. that is a decision that has been a long time coming at airbus, something of a changing of the guard. an interesting story we will talk about more later. schneider up by 3.9%. reviewing certain assets and returning money to shareholders. let's flip things around. two thirds of the stocks moving higher and only a third dropping. this is lending weight to the downside on the stoxx 600. -- with amoco down on the property side. downgrades coming through, some of the oil majors as well a little weaker. despite actual moves to the upside, oil is continuing its up -- rebound.
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let's get a first word news update for you. president trump is said to be considering pushing back the deadline for higher tariffs by 60 days. he has already indicated his willingness for letting the date flip if the countries are close to a deal. this as top-level trade talks resume. president trump has indicated he will need to meet president xi before. the results were likely boosted by companies ahead of the and -- the lunar new year. whilents rose over 9% inbound deliveries slipped 1.5% and left china with a trade surplus of $39.2 billion. patrick harker is adding to the voices calling for patients on a great tax. -- rate tax. balance, risks
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are slightly tilted to the downside. harper is a full voting member in 2020. trading losses in credit suisse are eclipsing and gains in the wealth management business. the bank posted a loss in the global markets, but the banks saw fewer outflows than many competitors. >> i'm convinced we're going to outperform on a relative basis. we see signs that. our revenue is up, the key indicators are moving in the right direction. to keep that going, it will be reflected in the share price. >> theresa may takes her brexit plan back to parliament. there are just six weeks before the u.k. is due to leave the union. the prime minister could face a revolt from anti-eu lawmakers in her own party.
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they insist that leaving a block with no deal would remain an option. global news, 24 hours a day on air and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. anna, matt. anna: thank you very much. goldman sachs is in trouble after their involvement in a scandal. their ceo spoke with us exclusively. >> they were complicit to the crime. the fact being the whole image of the country, the confidence to investors, now the state of the economy, they must bear responsibility. >> so you reject the argument it was a few bad apples. figure, anda
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probably the highest commission they have got is not feasible or in the top personalities is not away. >> should malaysia safeguard itself against formal -- foreign banks? >> know, we have adequate safeguards and policies. if you have crooks running the system, they can always navigate. it is important cap institutions in rule of law and credible leaders with very high ethical standards. >> i need to ask you about china, because they are also heavily invested on how it it gets resolved. you kind of relationship do want to see between china and malaysia?
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china is not directly complicit to the crimes. however, they were brought in, if at all, at the last page to try to resolve parts of the funding. clear have made it very to china they remain an important partner in trade and investments and we want to work very closely. but they have to accept the fact , democratic a new government. transparent and we have to be accountable to our people. it means that the original project must be reviewed. we cannot defend the costs. if we can achieve this understanding, then the price is acceptable, normal, transparent, and the project would benefit locals, then we can proceed. >> and you are referring to the infrastructure deal china
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started. let's get some transparency on your plan. become prime minister? >> that was an agreement among the party leaders, it is not just that i will assume office. so why do we not fix update -- a date? i want him to be effective, given the latitude to govern. so we cannot give him an immediate date. >> would you be happy to wait five years? would bemade clear he two years. anna: goldman sachs has since responded, writing that the bond offerings were designed to raise money to benefit malaysia and 100% of the net proceeds were
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deposited into 1mdb account. not a cent of those funds ever passed through any account controlled by goldman sachs in a huge portion of those funds were stolen for the benefits of members of the malaysian government and it is abundantly clear that members of the government and 1mdb lied to goldman. that is the statement from goldman sachs this morning. matt. matt: let's switch from malaysia and 1mdb to commerzbank, just coming out with earnings this morning that were up almost 40%. result, the stock rose almost 6% at one point now we are seeing a number of headlines from the cfo about targets they will miss in 2020. they will not achieve a return on tangible equity target of 6%, as you see there. we also heard they will not achieve targets to cut headcount at 36,000. over 38,000.ll be
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and they are behind their target on the digital ratio, whatever that is. have,ting the issues they say they didn't expect more of a tailwind from the german economy. it is getting less than maybe a thought it would have, although they do expect a rising rate environment to help with net interest margin. i will talk to the cfo little bit later on and bring bringing the interview 11:30 a.m. london time. up next, some of the stock movers from the others, including nestle, the world's largest food company, is up, as the ceo announces it is putting its lunch meat business up for sale. this is bloomberg. ♪
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matt: welcome back to the european open, 45 minutes into the trading day. looking at a mixed picture, you can see the ftse mid in milan. cap -- cac, .4%, the doing even better. it is the most romantic day in the year, and while some of you
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may feel lost at sea, others will just want to sail into the sunset with the one you love. venice is in jan swarts, president of princess cruises, the largest premium clues line in the world that plans to increase capacity by almost one third. jan, i take it that means the business is going well but you are increasing capacity. what kind of growth are you expecting in terms of revenue? >> matt, it is indeed a special stake. happy valentine's day. i'm here at the shipyard in italy and we are celebrating special construction milestones for three of our ships across two shipyards on one special day, valentine's day. anna: indeed. i understand the january and february are referred to as the wave season, because this is when you get some any bookings,
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gloomy and the northern hemisphere. what to bookings tell you about how the rest of the year is going to go? i'll leave the bookings report to the earnings call, but when i can share is that today at princess cruises we are very optimistic about our future, with five new ships on order in the next six years, we're seeing increasingly consumers investing in experiences, rather than things, understanding that vacations are essential to their health and well-being. what are you feeling in terms of costs? we've seen the crude price rise a bit. how much more do you expect to have to pay for diesel? and how much more are you having to pay for people? obviously, as a huge cost for acres line. -- a cruz line. have many costs
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including fuel and pay. but each year, we have unique you'll is a big peace at our cost, but that said , we are continuing to invest in amazing new technologies, new experiences for our guests. and we are seeing high repeat rates among satisfied guests. you your take on the global growth story at the moment. we spent a lot of time asking ceos and other business leaders about how strong their businesses are. where do you see any weak spots, worryeas that currently you? various year we see opportunities and challenges around the world, whether it is geopolitical, climate change and the like. but one of the duties of our business is that our ships are mobile assets and weekend move them to make supply and demand
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meet in unique ways around the world. the air raid sirens going off. jan swartz, president of princess cruises, thanks for joining us. let's get to the top individual stock stories with annmarie hordern. >> credit suisse to the downs are bit softer. they did have revenue for the fourth quarter, more than 1% above estimates. that is what the markets are focusing on. nestle to the upside, thinking about selling the lunch meat business. nestle has under pressure from an activist investor to boost returns. group plunging -- convatech group is
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down, double-digit downgrades to earnings. anna: and i thought that was a hot sector for m&a at the moment. coming up, the end of the superjumbo era. airbus scrapping its program, more on this next.
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anna: welcome back to the european open. 50 minutes into the trading day. equity markets on the front foot. equities around .4%. what sucks but one stock in focus. airbus scrapping its double-decker, marking the end of the jumbo jet era, in this particular form at least. production of the flagship model will end by 2021 after a handful of remaining buyers receive their last orders. we made this stock the hour because of the share price move we're seeing on the back of what doubt, a difficult decision to make, having backed the program to the hills of the last decade or so doubt, a difft decision to and trying to extend the market for this particular aircraft they have now had to make this painful decision that they are going to
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stop production. this is the share price reaction, up by over 5% this morning. you the tv show screen attached, the context around this. a lot of extra costs being doked about, some of that to with that. but they booked charges in total of 1.1 billion euros. the loss of a major order for widebodied a350's, and this all coming before the ceo arrives, i saw a colleague describing it as kitchen sinking. as the old ceo leaves, a new era begins. to discuss itus further is bloomberg's deputy head of transport, or he will be joining us to talk a little bit more about the story. it is a milestone, it really feels like a historic day for
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airbus. this was one of the most important storylines in this battle between of boeing and airbus, the dreamliner versus the a3 80, these huge, luxurious cruz liners of the sky. and it seemed like it would be totally that it was a horrible idea in hindsight. orders getting canceled, not many of them in the sky to begin with, at least as far as airbus
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is concerned. i have to say, personally, i have never flown on an 8380. -- a380. but if it's anything compared to a dreamliner, i expect it will be quite a good ride for the consumer unadjusted not work out for the company. bloomberg stephanie head of european transport is now with us. chris, what was the problem with the a3 80? >> if i seem obvious, but i guess it's just too big, is the conclusion we have to reach. years agoa debate between airbus and boeing as to what size plane the market really needed. airbus decided it needed the superjumbo, but the demand has not been there from of orders are not there, most airlines have not only a dozen, at most. where's the smaller twin jet planes like the boeing dreamliner have really cleaned up in the widebodied market. as never ass it popular in the u.s. as they wanted it to be? was that part of the difficulty? >> not is not popular, literally absent. compare it with a 747,
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which had a global customer base, was bought by u.s. carriers in earlier days and huge numbers in japan and europe, the a3 80 just has not featured. -- its is far too vague is far too big. have now worked on to high-frequency departures 80 tends toward better at crowded hubs where you need to squeeze passengers, other than the dubai emirates, what they have what they call a super hub. the a3 80 works well for them. matt: the dreamliner is a much anyler plane, and i guess plane is better than the a3. what is the best competition from boeing? the 747-8 is, to be honest,
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as much of a flop in many ways forhe a3 80 it was cheaper boeing to develop elevated not want to let the 747 go. they said it has been for cargo planes. it is done very poorly in the passenger market. but the competition is not a plane of similar size. a new version of the triple seven that boeing is developing. anna: thanks so much. a fascinating end of an era in aviation. chris jasper, deputy head of european transport. matt, you are in frankfurt tracking down the commerzbank story. hate to end on a downer, but commerzbank is having to cut down on these targets. matt: no longer able to meet its 2020 targets for headcount reduction or for a return on
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capital equity. i'm going to go talk to the cfo and see if he thinks they are more likely to be forced into a merger with deutsche bank, that interview at 11:30 a.m. u.k. time. this is bloomberg. ♪
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♪ president trump may push back the deadline for higher tariffs on china as the countries continue to negotiate. the recession, germany posts zero growth at the end of the fourth quarter is it a blip or the worst to come and turning it around, credit suisse is trading losses eclipses gains and wealth management. >> i am convinced we will outperform. we're seeing signs of that, positive.


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