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tv   Street Signs  CNBC  July 11, 2017 4:00am-5:00am EDT

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welcome to "street signs." these are your headlines the worldest biggest starting companies fall to the bottom of the stoxx 600 after deutsche bank downgrades adeco and randsted to sell. here in istanbul, minister alexander novak tells cnbc the opec/nonopec deal is having an impact on oil markets and more could be done to cut supplies. >> translator: if necessary, we
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can extend the agreement if necessary, we can increase the amounts that need to be reduced, or on the contrary, we can move to reduce them, but everything will depend on the ongoing situation. the white house defends donald trump jr.'s meeting with a russian lawyer last year as a new report suggests he knew the person offering compromising information on hillary clinton had russian government ties. and open for business! we speak to a number of france's top executives at the europlus conference as the chairman tells us brexit will be a boom for paris. >> we have now plenty of the elements in order to convince the uk to reach institutions which want to come back on the continent to paris well, it's a mixed bag for
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the european open just an hour after trading starts, resulting overall in the stoxx europe 600 being down by around one-fifth so far today let's have a look at how the individual european boards are opening up this morning, and we can see here that it's actually -- well, the cac is pretty much consistent at around negative 0.01% it is really the ftse 100 that's seeing the majority of the pain, down by almost 0.5%. xetra dax is one of the only ones keeping a reasonably solid foot in the green, up by around 0.2% let's have a look at how the individual sectors are shaping up this morning, and we can see again a bit of a mixed bag here. it's autos who are strongest here, up around 0.8% and it's food and beverages, real estate and health care seeing the biggest pain so, global energy investment totaled around $1.7 trillion in 2016 that's according to a new report
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from the international energy agency the report says upstream oil and gas investment rebounded modestly in 2017, this as the oil industry grapples with oversupply that is pushing down global prices. >> we should bring a lot of oil to the markets this is what is happening now. we are seeing a lot of oil in the markets, and as it is out of the process still under $50, and we expect it second half of this year there may be stabilizing if the demand is still there. >> staying with energy, abu dhabi plans to float a portion of its state-owned oil company, a plan to boost the profitability and gain access to new markets. this comes as oil-dependent nations battle with a glut of supply that has been pushing down crude prices. saudi arabia and amman also
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preparing to sell energy in a stake of their companies steve is joining us from the world petroleum congress in istanbul good morning, steve. >> good morning, jemma very interesting to see that move from the uie. the services side is a bit more downstream and a lot of their oil production activities, but it is so that the pressures are such that they want to try and raise money, even though we've got low oil prices and of course, the biggest deal on the planet that has barnes & noble talked about is the audi ram co-5% ipo. is it still on track i caught a couple of words with the ceo and discussed the investment program and indeed whether the ipo is on track, despite the lower oil prices. >> actually, our biggest capital program was in 2016 during the low cycle. what we are investing and what we are focusing is a long-term, and our investment is geared for the long term. this cycle, we have been through it for the last couple of cycles, and always we kept our investment and if you look at today, our
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investment in not only in the upstream, in the downstream, and in exploration and in particular, they're still continuing and even though we have the highest $260 billion of reserves, we have the biggest exploration program. >> let's get to our next guest, the co-head of oil and gas at credit suisse. good to see you, osmar you didn't hear what he was saying to me there, but a lot of people are questioning the underlying environment for corporate activity where we're going to see ipos, takeovers as well how does it look to you from a broad perspective? >> thank you for having me here today. there's no question that the recent decline of volatility in oil prices has tempered investor sentiment or expectations for capital-raising. we've had a record amount of equity raised, for example, the past two years for the u.s. independent shale players and the recent oil price outlook is certainly tempered that a bit.
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but we believe that's going to correct itself there will continue to be quite a bit of demand going forward. >> yeah. i think what is interesting as well, and we have to remember, the oil and gas world, we're not in a bubble. there are a lot of other things, including interest rate rise and the u.s. of u.s. corporate debt as well. they have made hay issuing corporate bonds while we've had record-low yields. is the interest rate environment a factor in this as well >> i think, again, different people, different ratings. investment-grade market's been on a record pace i think the high-yield market, which has been a very significant supply for oil and gas issuance, it's coming back, but i think given the uncertainty in the past couple of years, people have relied a lot on equity, but we'll see a significant debt amount as well. >> there's no doubt about it, and it's still the mantra here, whether you're one of the big oil or one of the smaller oil players. getting costs down is still the point. even if you see oil bottoming now, getting your costs down as well so in terms of the capital
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available to companies to go out and do other things -- now they've got their costs down or are getting them down -- have they got it to the level they want it to be at, and are they going to go out and start spending >> yeah, i think the oil industry has proven it's been very, very significant in terms of its ability to reduce cost, and it's not just cost, it's also technology advancements as well and efficiencies. i think all of those together has made industry much more efficient, but it still needs a reasonable oil price environment to generate the appropriate returns to attract investors, both on the public and private side. >> yeah. i get the impression, you never hear anyone specifically say, or very rarely, i need this price or i need this price, but if it had a six handle, the world would be happy in oil-producing land a mid-50s handle, they'd take that, but they're way below where they're happy. >> again, not all oil and gas companies are in a similar position there are some that -- i think all would prefer a higher price, but i think some will do a lot better with the current environment than others, and i think, again, the company
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industry overall has proven itself to be quite flexible and quite resilient, but if we remain in a low oil price environment, there will certainly be winners and losers in that and will probably lead to greater m&a activity as well as some of the stronger companies pursue some of these other opportunities. >> i always wondered about this. when the price is low, i would have thought it better with a decent balance sheet to buy it, across a whole of industries, but that's not how it happens. looking at this, bhp billiton deals, perhaps, price is higher, they feel they have the balance sheet to buy stuff price low, they stand aside, almost like the inverse of where they should be >> m&a is driven by confidence and people generally feel better in a higher commodity price environment than a lower one the other thing companies need to evaluate is the attractiveness of their positions of reserves and prospects they already have in house, versus going external and a lot of these companies still have very attractive portfolios. so they will be cautious even in a down oil price environment,
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but nevertheless, it will probably lead to more m&a in certain places and probably to more shareholder acquisition, which has been out there a bit, too. >> who's going to lead the m&a look, in so many ways, we talk about what the chinese are doing, what the japanese did and what have you, and the chinese, veracious extractive industries appetite and whathave you. will it come from there or emboldened u.s. players or the massive players? where is it going to come from >> it's hard to determine for sure, but people are looking at m ictio m&a throughout the cycle and i think you'll see potentially more consolidation in the u.s., but i think you're going to see m&a around the world, too. but i think people, their desire for m&a will certainly be impacted by their confidence in the future and where they think oil prices will be going. >> buyback is a thematic, such a huge part for equity markets as well, but looking on the other side of the coin, the issuance as well. the programs you're talking
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about, saudi aramco on its own, but do you expect to see more oil issues across the board? >> well, as i mentioned earlier, we've had a record amount the past two years i think you'll certainly see more, but again, we need oil prices at least to stabilize and hopefully go up. the other thing is a lot of these companies have more than just upstream businesses, so they'll look at potentially floating other parts of their businesses, whether it's midstream or downstream or logistics and so on. >> it's been a real pleasure speaking to you here in istanbul thank you. osmar abid, head of oil and gas for credit suisse. back to you in the studio. >> thank you very much. the news is coming thick and fast out of that conference. we'll be checking back with you later in the show, but for now, let's keep talking middle east, because u.s. secretary of state rex tillerson is in the persian gulf, hoping to help settle a dispute between qatar and its neighbors. tillerson stopped first in kuwait to speak with the amir and foreign minister he will also visit qatar and saudi arabia this week well, we'd love to hear from
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you. why not e-hail the show? our address is or get in touch with us on twitter. you can follow u us @streetsignscnbc. or please, reach out to me directly @gem gemmaaction. coming up, prime day is approaching, but how important is the annual extravaganza to amazon we'll find out after the break the future isn't silver suits and houses on mars,
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it's right now. think about it. we can push buttons and make cars appear out of thin air. find love anywhere. he's cute. and buy things from, well, everywhere. how? because our phones have evolved. so isn't it time our networks did too? introducing america's largest, most reliable 4g lte combined with the most wifi hotspots. it's a new kind of network. xfinity mobile. pearson is selling a 22% stake in penguin random house for around $1 billion in a bid to strengthen its balance sheet and return 300 million pounds of capital to shareholders. the british publisher will still
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retain a 25% stake in penguin. sanofi is buying the biotech company protein sciences for an initial price of $650 million. the french drugmaker will pay an extra $100 million upon the achievement of certain milestones sanofi says the deal will expand its flu vaccine portfolio. and a 0.5% drop in quarterly like-for-like sales that kept the quarterly guidance unchanged. the ceo says recovery is on track and first-quarter trading was in line with the company's expectations like-for-like global sales fell less than analyst forecast with a 1.2% drop in the first quarter. and amid growing investor frustration with a lack of structure reform in central and eastern europe, the ims is holding a conference in croatia with the aim of promoting greater integration between regional economies
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we're at the conference in right now. karen, i thought i was lucky going to the south of france for work, but it looks like the scene behind you is just as beautiful, if not more so. >> reporter: it is beautiful here, gemma, and it is absolutely baking as well. that 30-odd degrees here this morning. let's talk about the soul-searching from europe i think it's fair to say many are questioning the future of europe, particularly after the brexit vote, and a lot of the change being steered by french president manuel macron, who's even suggested treaty change, dare i say it. but led just take stock. there are still a number of countries that want to join the eu, and i can refer to nearby neighbors. you can see pretty much just to my right, montenegro, serbia, turkey, countries all lining up for eu but before adding more members to the bloc, it's worth considering whether the bloc itself to embark on more reforms. that is the thesis of this meeting by the imf talking about structural reforms in
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southeastern and southeastern european countries considering some of the growth rates to date, access has been a common goal meaning more stable growth rates across these countries, but as that starts to slow, there are question marks whether true, genuine, institutional reform is actually holding these countries back there are a number of academic studies which effectively point to strong institutions and stronger economic growth a bit of light reading for our viewers, if you want to read up on it. world bank report published theories on this recently. the conference will certainly turn the spotlight on what is breaking down behind the scenes. if you look at individual countries, for instance, poland, you've had a fight with brussels over the government's move to remove key checks and balances, real questions around the credibility of those institutions here in croatia, you have one company that is considered too big to fail. it is a major employer across the economy to the point where the turn of its fortunes is actually impacted economic growth forecasts, and then cast your mind to hungary, where there is growing populist
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politics, which suggests a fragmentation and lack of commitment to the institutional process, basically citizens have lost or are now in a system of dismay around whether they're actually going to be rewarded by the system so, with christine lagarde later today, best enacting reforms across europe, whether the gradualistic approach of recent years, effectively putting building blocks down and adding on top of those layers is required or whether a big bang approach is now necessary because you're seeing so much backsliding by politics in recent years the other question mark is whether we truly have open markets here and whether citizens are incentivized to make money and grow businesses in these economies because, of course, if they aren't, they pick up and move to other countries, which has caused this migration problem across europe. so, that discussion will be on stage with christine lagarde later today at the imf conference, and i'll be sitting down with madam lagarde as well to talk about whether institutions are failing globally so be sure to tune in as we bring that conversation to you
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live on cnbc tomorrow. gemma, back to you in the studio >> karen, thank you very much for that best of luck for the conversation this afternoon. should be fascinating. we look forward to hearing it tomorrow. now, switching tack. u.s. earnings season could see record returns, according to s&p capital iq the company expects growth to be led by energy, financials, and information technology energy earnings alone are expected to jump by 387% jpmorgan and wells fargo are expected to announce their earnings later this week well, i'm joined by peter rosenstrike, head of market strategy at swiss bank thank you for joining us >> thanks for having me. >> let's talk about what we expect out of the q-2 earnings season first of all, do you have such positive expectations? and second of all, is this yet factored into where stock prices are currently sitting? >> i think from the valuation standpoint, a lot is already factored in. we're not as optimistic as what
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we saw from the s&p numbers or forecasts. and we take things from a macro standpoint, so we look at things like the response of the u.s. consumer to the economic data, and we just haven't seen a strong recovery in retail sales, you know, so we don't expect the u.s. sort of domestic market to really outperform at this level. you know, we think that q-1 earnings were sort of pretty much as strong as they're going to get, and we're going to see sort of a deflation in q-2 and a slow sort of deceleration as we move to the end of the year. so we're less positive i think the big thing for us is the way the market reacts to what we think are going to be disappointing earnings you know, what we know now is that the fed and many other central banks are moving towards normalization, and the question is, when will that sort of trigger into equity valuations we know that moving fwowd that normalization globally that asset prices are going to be out of favor the question is when does that start coming into play in equity markets? at this point, we're only seeing
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it in fixed income, but you know, if the numbers start saying that, you know, growth is not there, earnings forecasts are going to be too high, maybe the equity investors start saying wait a second, now we're going to start taking some money off the table. >> listen, you pointed to a huge factor, corporate earnings and secondly, the fed. >> correct. >> let me throw something into the mix, the summer market slowdown in general, markets slow down. factor that in and tell us how your timing looks from that point of view. >> obviously, thin markets, we have extreme sort of overanxious volatility you know, we saw that last week. we saw, you know, over the last two weeks we saw about a 25 basis point rally in fixed income, and all of a sudden, you know, markets are saying mini temper tantrum that doesn't compare to what we saw in 2013 by any stretch, but that's the summer, the sort of jump off the bridge as fast as possible so, i think there is a likelihood of something like that in the equity markets, but i brought the two pieces together, the equity situation as well as the monetary policy
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situation, because they're inevitably extremely linked. you know, there is an extraordinary amount of questions or debate going on right now whether the last ten-year bull run was a function of improved productivity in terms of earnings growth or just a function of cheap loose capital inflating asset prices and the questions now in investors' minds are going to say, moving forward, what's really going to happen so, i think there is a level of volatility obviously, the end of the month, around the 27th of july, we'll see a lot of the big names coming out, and that's when investors should start paying attention. >> peter, let me broaden this out. we've talked mostly u.s. here. how about europe we've seen a lot of money flow into europe on equities. we've also seen increased hawkishness on the part of ecb president mario draghi. >> yes. >> how do you see the u.s. versus europe, equity as an opportunity going forward? >> we think the situation in -- you know, i think the european/u.s. interest rate as well as equity story is probably a little bit overbaked right now. draghi has an extreme amount of
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juggling act to balance in what we're seeing sort of in higher inflation in germany, good economic data, to sort of the slower parts in portugal and greece so you can't really just pull the trigger as fast as sort of say the u.s. with a sort of more unified view or outlook, you know so, i think the market's gotten way ahead of draghi on this situation, especially since he just used language at this point. we have the fed that's actually moving into the market, raising interest rates, putting together a plan for september on reducing balance sheets i think the play goes back to the u.s. and the u.s. dollar >> let me bring in one more country quickly. we're coming to the end of the segment, so a quick answer would be great looking at japan now, lack of inflation's been a problem in the u.s. recently, but in japan for decades. >> yeah, yeah. >> how will things play out from this point we've seen the yen weakening and weakening for the last month or so. >> yeah. well, i think japan's going to step out of this game. we know they're going to hit the top of their corridor for their pinning of the interest rate
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curve. they hit about ten basis points in the middle of the curve, and they sort of pegged it with unlimited jgb buyings and yen buying and 11 basis points so, i don't think they're going to be in play so much. they're also politically wounded, so i think it's going to be less about japan and more about what's happening in the u.s. i think the key for investors this week really has to be the bank of canada you know, that has been sort of the focal point for sort of overwhelming hawkish, the reverse dovish-hawkish flip that we saw, you know, in the last few years -- excuse me, weeks. and here we have the bank of canada's rate decision, and it will be very interesting to see how much has the market gotten ahead of itself. it's seeing about 67 basis points increase in the next 12 months that's a lot, considering that we're not seeing wage growth, we're seeing sort of weak activity
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the commodity complex is extremely sort of uncertain. you know, it will be interesting to see if the bank of canada comes out with raising rates or just sort of creeping towardsization and if they move just towards that slow, steady normalization, well, i think that's way priced into the market at this point and something that's going to pull back a lot of the canadian bulls. >> peter, given that we've brought so many central banks into the mix already, let me throw one in for a bit of variety. how about the bank of england? we have two speeches today we have a panel with ben broadband and also andy hardane speaking. >> i think the focus will be broadband. he's the middle of the road central banker here in the uk, and the balance between sort of dovish-hawkish really rests on his shoulders, and i think that's what the market wants to know, whether he's going to have sort of the wait-and-see approach, data-dependent carney view or something more hawkish that, you know, is saying that the brexit results and the economic data will continue to improve moving forward
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inflation needs to be tackled now. >> peter, thank you so much. peter rosenstreich, head of market strategy at swissquote bank, telling us what to focus on for the rest of the week with regards to equities. thank you so much for joining us today, peter moving on, amazon prime day is here, and ceo jeff bezos wants to make sure consumers feel they need to be a part of it special offers are all over the website. prime membership has grown steadily and now sits at around 85 million in the u.s. that's one reason for the share price surge with amazon outpacing its retail rivals over the last five years. well, we have to take a quick break right now, but do check out "world markets live," which is our live blog running throughout the european trading day.
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welcome back to "street signs. i'm gemma acton, and these are your headlines the world's biggest starting companies fall to near the bottom of the stoxx 600 after deutsche bank downgrades the likes of adeco and ransted to sell, siting employment levels russia tells cnbc the opec/nonopec deal is leading to positive signs in the market but more can be done to cut supply.
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>> translator: if necessary, we can extend the agreement if necessary, we can increase the amounts that need to be reduced, or on the contrary, we can move to reduce them, but everything will depend on the ongoing situation. the white house defends donald trump jr.'s meeting with a russian lawyer last year as a new report suggests he knew the person offering compromising information on hillary clinton had russian government ties. and a billionaire brawl. activist investor paul singer bids $18.5 billion for the texas utility encore, topping warren buffett's offer. well, let's talk markets for a couple of minutes here let's start by looking at how the u.s. futures board looks and we're seeing that it's the dow jones is the only one expected to open in the green so far. nasdaq, which was the strongest finisher of the three indices yesterday, is looking at an
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implied open around two points lower. let's switch to europe, where we're seeing a lot of red across the board. only the xetra dax is managing to stay above water, up almost 0.2% it is the ftse taking the brunt of the pain, down just over 0.5%, while the cac 40 and ftse index barely moving. currencies, not much movement here either. euro to the dollar pretty much flat, and we're seeing some dollar strength against the japanese yen, whereas if we look over at cable, we're seeing cable outperforming -- we're seeing it outperforming the u.s. dollar up 0.15%. let's move on to oil prices. obviously, oil has been in tremendous focus this week with the world petroleum congress going on, and we're seeing some pains. remember, after a choppy trading session yesterday, oil ended up finishing marginally up, but today it's actually trading down both wti crude and brent down over 0.5%. well, oil has been on the move, as we just mentioned, and this is largely on the back of
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questions about supply, which has had banks cutting their price forecasts. let's get out to steve, who is there in istanbul at the world petroleum congress steve, good morning. >> yeah, thanks very much indeed, gemma. look, a lot of people questioning the power of the opec deal to reset these markets as well. so, i spoke to one of the architects of this deal, of course, the leader of the country which basically will lead the energy department of the country that has the biggest oil production in the world. alexander novak, the russian energy minister, gave me a very long interview about why he thinks the deal needs longer before people start writing it off and how, actually, people should be very careful to say that this is as good as it gets, because they reckon they could probably go longer and deeper as well that's all part of the answers you're going to listen to now. listen in to also mr. novak's answers about whether he thought the deal would unravel as well let's listen in to a bit of analysis on the back
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>> translator: with regards to countries, the 24 countries that are a part of the agreement, of course, the situation everywhere is different, and it can't be ideal for everyone everywhere. we are assessing the implementation of the agreement as a whole, and on the whole, the commitment in the reduction is a little over 100%. and in this sense, russia is implementing its obligation in full, even a bit more than was planned. and of course, we are discussing this within the framework of the jmmc but globally, we need to look at the overall situation with the balance between demand and supply, and in this sense, in my view, the most important thing is to take a positive from the reduction of the industry surpluses that would have had a negative influence today if we hadn't done anything things would have been a lot worse. we are in contact with practically all the ministers, including the minister of kazakhstan, and i know that he
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is committed to implementing the agreement, and i think kazakhstan's position is fairly positive as well for the market so that all the decisions that were taken will be implemented >> but is the market already looking at the end of the deal and looking at comments, such as those from kazakhstan, saying there could be a free for all at the end of march 2018? >> translator: well, i think it's early to make these sorts of statements about how countries will be acting after april 1st. but in accordance with the situation we have today and the dynamics we see, we need to achieve a balancing out of the market and a reduction of reserves to the average for the last five years by april 1st of next year. and starting with the second quarter, gradually in step with demand, we need to move away from this deal i think this is the correct strategy, but today it's too early to talk about it because we still have nine months in front of us and a lot can happen in the market.
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therefore, we need to steadfastly implement the agreement and monitor the situation and see how the market behaves. a couple more words. when the first agreement was signed for six months, people immediately started asking me what's going to happen in six months, and then as soon as we extended it for another nine months, everyone is interested in what will happen in nine months it's an endless and eternal question we really need to see how the balancing goes, and the balancing is going very well and secondly, we all need to understand that this precedent that was created that opec and non-opec countries came to an agreement, means that we have an instrument that allows us at any moment to take any decision that might have a positive influence on the industry, and that this depends only on our joint cooperation. we are aiming to get out of this complex situation as quickly as possible if necessary, we can extend the
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agreement. if necessary, we can increase the amounts that need to be reduced, or on the contrary, we can move to reduce them, but everything will depend on the ongoing situation. >> and therein lies the point. a lot of doubters out there, and one can understand they're reticent to say this deal is working, given the fact that it's taking so long to get those down to five-year averages, taking a long while to find rebalance in the market, and indeed, there is the shale question, plus the fact that so many members within opec don't have a capital, nigeria and libya, and are producing way in excess of what many people thought they could do. but i thought the key was in the final answer, where mr. novak insisted on making the point to me that they can go deeper and they can go longer in their efforts to rebalance the market. so, maybe 1.8 million barrels isn't as much as they can go, and the end of march isn't the end of this deal as well and it will be interesting to see how they communicate that. and as i mentioned on previous programming, july 23rd, july
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24th, these are the key dates for the oil-watchers' diary, because that's when you have the meetings in st. petersburg, where the saudis will probably be there, and this jmmc will be there, where they will work out if the strategy's working or not and where to go from here. gemma, back to you. >> steve, talk about the supply side of the equation, but let's switch to the demand side. is there much chatter about the longer-term demand dynamics, or is it very much near-term demand-focused at the moment >> yeah, always. always a big focus on the longer term as well because you've got to remember, the ladies and gentlemen of the oil and gas industry do not make decisions based on the next six months, they do not make decisions based on whether we're seeing oil and gas fall a couple percent in the session, but it stems their confidence and erodes it over a period of time but yeah, these investment decisions are made over long term, and they believe that the figures -- now, whether you're the iea, which we've spoken at length on "squawk box" to them, whether you're the u.s. energy administration or opec or one of the multitude of other bodies,
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every piece of data spells continued demand for oil and gas. it may not be at the current kind of levels, which is around about 80% for hydrocarbons of the total mix as well, but there has to be investment across the entire energy spectrum as well and as we saw from that 191-page report from the iea today, a large amount of investment is taking place it just isn't taking place at the same degree on o&g, on upstream it's taking place in china, in india, and on electricity. and for the first time ever -- and this is one of the key findings from that iea report, spending on electricity, rather than upstream oil and gas, has exceeded, and that's very interesting as well. so, people are looking at electricity activity, looking at their grids, looking at their infrastructure and spending a vast amount of money there because they see the ongoing demand, in answer to your question >> steve, thank you very much for bringing us so many dimensions to the ongoing oil story. let's move out to asia now, where shares in japanese automaker suzuki fell as the firm came under scrutiny over possible misuse of vehicle
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emissions software we have more now from the nikkei >> hi, there shares in suzuki motor fell as much as 4.1% today after the news broke, bucking the trend as the nikkei index continued to decline for the second straight day. a media report said the dutch road authority found that suzuki models produced unacceptably high levels of toxic emissions during road tests. the jeep grand cherokee was also singled out for the same reasons. the dutch road authority conducted tests of more than a dozen carmakers, and the investigation was centered on toxic emission levels in diesel cars that appeared much higher than legally allowed during road driving, rather than under lab test conditions. the use of software to protect the motor from harm under certain conditions is allowed, but the test results are for the two automakers seem to be out of proportion with any need to protect the engine, and there are approximately 42,000 suzukis
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on european roads, and a spokesman at suzuki's japanese headquarters said the company was still trying to find out what had happened. the dutch agency had been investigating during the past year after volkswagen in the u.s. was found to be using software to cheat on emission tests in 2015. now, dutch prosecutors have said they would investigate the two automakers' possible misuse of a vehicle emissions software and that's all from the nikkei back to you. >> thank you indeed for that update. let's switch to the u.s. now, because "the new york times" reports that donald trump jr. knew the russian lawyer he had met with had russian government ties. the attorney had offered to provide damaging information about hillary clinton. the white house denies that the campaign colluded with russia to influence the election the nbc's white house correspondent, kristen welker, has more for us. >> reporter: tonight, donald trump jr. has hired a lawyer, becoming the fourthperson in the president's inner circle to
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seek legal representation as investigators probe possible connections with russia, this after trump jr. met with a lawyer with ties to the kremlin in june at trump tower just days after his father secured the nomination at first, trump jr. said the encounter with natalia veselnitskaya was to discuss russian adoptions then admits he was promised information about hillary clinton that might be helpful to his father's campaign now the senate intelligence committee wants answers. >> donald trump jr. will be somebody that we want to talk to. >> trump jr. has said he's happy to meet with the committee, tweeting "no inconsistency in statements meeting ended up being primarily about adoptions in response to further queues, i simply provided more details. also in attendance, jared kushner and then campaign chair paul manafort. the white house says the president learned about the meeting just days ago. can you say definitively that there was no collusion with anyone on the trump campaign in russia >> i can tell you as the campaign manager in the last months of the campaign, the
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winning campaign, that we did not meet with russian officials. and there is no collusion. >> reporter: nbc news has learned the meeting was set up at the request of a russian pop star, emen agalarov. agalarov first met trump during the 2015 miss universe pageant which trump owned and later appeared in one of the pop star's music videos. >> you're fired! >> reporter: a publicist for the singer tells nbc news "nothing came of that meeting and there was no follow-up between the parties. it took place amid a campaign in disarray one campaign official saying, "we had a habit of unplanned meetings with unnamed people." >> i don't think this definitively establishes that the trump campaign included with the russians, but i think it comes close to definitively establishing that the russians were reaching out, hoping it could move it in that direction. >> that was nbc's kristen welker reporting. well, let's stay in washington, d.c., where the u.s. treasury may remove the
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so-called earnings stripping rule that is intended to stop firms from reducing their tax bills by shifting profits out of the country. a number of business groups have criticized the directive since it was introduced by president obama. companies are supposed to be fully compliant by january of next year. it was part of broader regulation passed in 2016, which stalled so-called tax inversion deals, such as pfizer and allergan. well, we're coming into the final part of the show, but coming up on cnbc after the break, we'll be speaking to the ceo of amundie, yves perrier, about the changes in the industry catch that at 11:15 cet. your brain is an amazing thing. but as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain
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and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember.
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welcome back on "street signs. we have a little bit of breaking news hsbc expects the bank of can ka da to raise rates in july. they previously said they expected rates to be on hold until the fourth quarter of 2018, so bringing forward the estimates for a rate rise by the bank of canada by quite a lot. let's get back to some of the main stories on our news today. uk prime minister theresa may gives a major speech later today, where she is expected to restate her commitment to reform, despite the loss of her parliamentary majority she is also expected to challenge opposition parties to contribute ideas, not just criticize conservative policies. and may is facing now a new setback as she suspends a conservative mp for a racist remark lawmaker ann marie morris used racist language at an event about brexit implications. the mp had apologized for the
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offense caused by her remarks, which may called "completely unacceptable." staying with the uk, surveys from barclay card suggest retail consumers are shrugging off the political uncertainty resulting from the brexit vote and last month's general election according to data published by the brc, uk retail sales grew 2% last month the latest survey paints a similar picture, suggesting uk consumer spending rose 2.5% in june and let's head across the channel to france, where french prime minister ed ward philippe said he plans to boost investments to france by introducing tax cuts for the wealthy. speaking to the "financial times," he said the timing of this reform will be announced to parliament in the next few days. this move comes as a clear break from francois hollande's government, which imposed a 75% income tax on high earners and it's emerging markets
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that will take center stage at the europe plus conference in paris today with talks about sustainability and investment opportunities in africa. we have clair fournier joining us from paris. good morning i must say, i was in france last week talking to economic and business leaders, and there was a real sense of optimism about what will happen going forward now that we have president macron in place. are you feeling the same on the ground right now in paris? >> reporter: well, yes you mentioned the efforts of the french government to lower the taxes, scrap the wealth tax, and also lower the labor costs, which basically are the main obstacles for investors to come to france. and edouard philippe, the prime minister, is expected for lunchtime here at the organization that is trying to develop and to promote paris as a main financial
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the minister will focus on the efforts by the new government and president macron in order to attract foreign investors. i have with me right now christoph, the chairman of renaissance capital, who came to europlace. good morning to you. there will be talks about eme e emerging markets, for sure -- africa, the capital markets, chinese intrabank markets also but first of all, i would like your opinion on what we could call a communication operation by france today to attract investors. do you think paris could ever be a credible alternative to the city of london >> yes, absolutely given france's cultural ties and economic ties around emerging markets and the presence of major international french banks already in london and internationally and large pension funds like amundi, i think france and paris has a great chance to become even more of an international market than it already is. >> reporter: of course, there is a growing uncertainty on the american and european markets
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regarding monetary policy. do you think investors should look for alternative investment opportunities? i think that's what was in the renaissance capital notes recently >> yes, absolutely renaissance capital believes strongly that investors should be looking at emerging and frontier markets as they look for yield and growth in returns. we see very attractive opportunities, particularly in the markets where we operate in africa and in the middle east. >> reporter: what sort of countries precisely? >> well, we're very excited these days about ghana, egypt, kenya, particularly in these countries, consumer markets, and banks. >> reporter: and why these sectors in particular? >> we feel these sectors have are a very good proxy for the economic conditions in those countries and they're the first beneficiaries of the good macroeconomics parameters. >> reporter: for some, they're stressing on this morning on the development of fintec in africa.
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how does that operate? >> africa is one of the leaders. as many banks are not yet providing services consumers are looking for, the telecom companies that are prevalent across the continent have taken their place and quite a few young african companies have come up with quite attractive new technologies. >> reporter: let's look at the oil market in a recent note, renaissance predicted that oil exporters should accelerate most in 2018, and that's despite the imf forecasts of a barrel around $56 for the year of 2017 and '18 >> yeah, so we see oil staying within the band of where it is today, $45, plus or minus $10 per barrel but we think that the countries have diversified themselves significantly. and here particularly i look at nigeria, which during the 1980s when the oil price went down, nigeria's economy suffered significantly. but here with the diversification in consumer products, telecoms and banking,
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the drop related to the drop in oil prices has been much smaller and we're seeing a recovery much faster than we did in the '80s. >> reporter: i'd like your opinion also on russia, the g-20 summit this weekend. vladimir putin said the russian economy has definitely moved out of recession what's your takeaway >> well, we feel the same way. we see russian economy this year growing by more than 1.5%, and we're looking for 2% growth next year so we do see russia making a turnaround >> reporter: okay. christoph, thank you very much which will you be attending today specifically in terms of panels what are your interests here at europlace? >> well, i'm particularly interested, as i mentioned, about africa and discussion on the african capital markets and financial services sector. >> reporter: and it will be devoting a morning and also tomorrow to these topics thank you very much for being with us. >> thank you. >> reporter: and like i said, now the key moment of the morning will be when edouard philippe, the prime minister, comes to europlace and tries to
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encourage foreign investor bankers, particularly uk bankers, to come to france and maybe move jobs to france. so far, only one bank, hsbc, has announced that it will move 1,000 banks from the uk to france and like i said before, france is hoping to become a credible alternative for the city of london in the context of brexit. back to you. >> clair, thank you very much for the latest from paris. we're brushing up against the end of the show right now, but let's take a quick look at markets before we do that. we'll start with u.s. futures, where we're seeing the dow jones is looking to have the strongest open, up around 9 1/2 points, and nasdaq, which was yesterday's biggest gainer of the three indices, up around three points let's turn to europe, where we're seeing a real mixed bag across european markets. it's the ftse 100 that's feeling the brunt of the pain, down over 0.6% so far today. the xetra dax and italy's ftse
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mib both up around 0.2%. cac 40 pretty much flat. let's just pick up on one of the big movers today before we end the show, and that's pearson, which is selling a 22% stake in penguin randomhouse to joint venture partner for $1 billion in a bid to strengthen its balance sheet and return 300 million pounds of capital to shareholders the british publisher will retain a 25% stake in penguin. well, we have something quite exciting on tomorrow's show, and that's when we will bring you an exclusive interview with imf managing director christine lagarde, but that's it for today's show i'm gemma acton, and it's "worldwide exchange" up next
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good morning wall street could have a new wat watchdog president trump is nominating a new banking regulator at the fed. who he is and what it means, straight ahead. primed for record-breaking sales. shares of amazon rally with prime day in full swing. we'll tell you how much the e-commerce giant could make off of today's deals. plus, snap slips shares of the messaging app closing below the firm's ipo price for the first time the details of why, coming up. it's tuesday, july 11th, 2017, and "worldwide exchange" begins now. ♪ oh, snap ♪ oh, snap >> get f


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