Transcripts For BLOOMBERG Countdown 20160810

After results from the box office. Signing on with a deco. The numbers are crossing right now and we have the revenue. The net income is 190 million 184 million and they are maintaining the guidance. The last time we spoke to the we had this again today and we are joined here and this is in just a few moments. About something going on in the markets. This is the bond yields and it went down again. There are 10 year Government Bonds and the bank of england hit a speed bump. And thed is Building Bank of england has one third of the Government Bond market. They are one of the best performing bond markets in the topicand this is a tough down there and there is talk of votedhment and the senate in favor of the impeachment trial. Is a cracking reward and it is one of the best performing currencies and new york is opening later and how high will this go . And this is not even 5050. Opinion, it their is at a rich level and there will be three and i. The dollar weakened for a second. 5 of theare down the volumes are below the normal volume that we monitor here. These are your markets and we are going to asia with rosalind chin. Dont from has caused saidoversy again and he that those who back gun ownership can stop Hillary Clinton and that he wanted to abolish firearms she wanted to abolish firearms. Clinton may be physically targeted by the gun lobby. President s say the downing of a russian warplane has created a shadow. There are there was a long conversation about carrying gas to europe. Sales wereuarter and cut. Offset america helped this. One Million People have visited and expansion plans are underway. Is the original product been greatction has a great Tourist Destination in the summer. They will repair the budget. He repeated a view that Monetary Policy is unable to get the for across the world. Global news is powered by 2600 journalists. On can find the stories bloomberg. Thank you very much. Markets. David, take it away. Good morning. Higher and weis are getting a slight tailwind some have suggested we may be entering a short time of consolidation and there are markets like hong kong and you canhat are up and look at what has been happening are a lot ofe youumer stocks and it shows the consumer is holding up well in china and we are looking at attractedd this has so much money from the start of this month and it has driven up the value of the currency. At what point will this get counterproductive for the economy . And goes across the markets it is a rare session where it is down across the asiapacific. Are a look at this and we drop of the a big dollar. Expanding the Quantitative Easing Program and hitting a stumbling block. They failed to find enough to reach a stated goal. Back in 2009 it was 9 00 today. Officials had a warning that the brexit will come to a cost to the Financial Services industry, no matter what the government secures in the negotiations. Britain could lose Single Market access. Preserving it will require membership to the economic area with considerable cost to the Regulatory Regime. This is the rub of this issue. Is 24 billion pounds of management. This is the second day of hud and the market are not playing ball. Less this isccept the first time that a mission has technically failed. Is this concerning . Two things. You not have been offering the right price and they could be and it on with liability is not good to get this in the program. It stalled for a it and too early to say. The 30 year Government Bond yields in the united market has ahis spread that is negative for the first time in eight years. The Pension Funds need some kind of return. Are you convinced that this is done . I am not. Anything i am thinking about with my colleagues is the equity be low and it could andrest rate environments investors struggling to get return. Between theship is growth and yield equities and it is breaking down. This does not look like it is going away and i agree with the people that there are going to be hikes. They are optimistic. It is a subjective intonation. The u. S. Gets there and the yield might go elsewhere. Mark carney has lambasted the bank of japan and lets have a look at this chart that shows you the transmission mechanism and it has never worked better. Is in 2008 in 2010. Lets show you the cycle in the retail rates following in the past years. Perhaps we should not be so quick to and best rates. I think they have it right. It is like the americans making sure the money gets to retail spenders and it does not seem to work as smooth over here. This is through mortgage europe, therein ,s not mortgage holders and this time around, of course, the governor said he is reducing the Interest Rates and that it has to be passed on to lenders in the streets and it has not happened. Twoome stage, the money has enter. You call this helicopter money . It is an attempt you individuals in Society Additional cash. Sometimes, that is unacceptable will stop we will get the first results from and we have this interview on bloomberg. At 11 00, we have a monthly the Monthly Oil Report and there is a Rate Decision from the bank of new zealand. Coming up on countdown, a hit movie. More on results and an interview with bob eiger. We speak to the ceo of the Recruitment Firm about the earnings impact of brexit and he tells bloomberg that he stands by his decision to award a bailout. Stay with us. Mike on will speak to the pulse. This is bloomberg. It is overcast and i have this on the hang seng. It is an interesting move with we are weekss and iger says it is so good and it is breaking ground on the expansion. Is one of the most it is one ofps and the most populist countries in the world. Quite involved and we have built something very complex and unique. The reaction has been great. The intent to visit is very high people are staying longer showing the people enjoyed the product a lot. Product in theew over one Million People we have Broken Ground with expansion. Give us some advice. As you say, you have had a lot of success and you have worked with the most Senior Leadership and other companies have not had as easy a time. It is not an easy answer and i are not sure that other situations are the same. Anda is a wellknown entity it is a trusted brand and it somea lot of candor and say it is going to take too long. Markets andn the how the product will perform. There are multiple segments with the beijing and shanghai trusts , as partners, they have been aeat partners and it is complicated market that has a lot that does not meet the eye. They come from a variety of it isent directions and not necessarily good or bad, but they exist stop the patients that we have shown has paid off and we are respected for having it. It was not easy to negotiate and it was not easy to filled. Our partners have been with us it shows the product we have created. 77 have eaten on the profit predictions and we can talk to ceo still with us. Highs and iking new want to have a look at this. Volumes and you can with newon the days record highs and the volume was of of the average for the year. You, lookingcern at this momentum . It does. On this program, i have said the u. S. Will have a bump in the road and we have come to an end of the road. Youre right that what is happening is a combination of volumes. There may be a squeeze going on here. Understanding to what is causing this. There is the end of the rally look at the production and it is ok. Is something i prepared for you from earlier. Low and hedgear funds have increased and this will continue to drop. Getting to the issue, if you said that you thought we are peaking in america and they are drawing down by i percent are 10 , there was a call that this would drop and the drawdown could the extreme. 510. By the end of the year . Who knows . This will come when the fed increases Interest Rates and people will panic, saying this is going to drop in and they will change their minds and get bullish under the equities. The fact is that the valuations are stretched. The valuations are stretched boosting andns are it lays in Government Bond holdings. Shift, what this does this say to you . It is breaking down and what something coming back to normalization. Normalizationthe take you . I wish that i knew. Recruitment results and we will speak to the ceo. This is bloomberg. Shot of thee imperial palace in tokyo. Dollaryen trading dollar down, yen stronger. 101,25, moving significantly. Slightly risk off evaluation. Some news now on the german utility, just after 6 30 in london. 7 30 sitting down in berlin. First half net loss of 3 billion. This is specifically in regard to the charges and revisions, the powerplant that the company was hoping to left in september time. 0. 09 billion and provisions for contingent losses at the company. The headline is a firsthalf net loss of just over 3 billion euros. This is being driven significantly by provisions for the current losses. Those come in at 9. 9 billion almost a, trillion. It is a solid operating quarter according to e. On. Despite the numbers, the spinoff is right on schedule. Earnings for the Overall Company at 2 billion. Really they headline is the right down. If we exclude them from the numbers, let us rip out that adjustment, and this is what youve got. A miss on the adjusted earnings and 1. 7 billion, the market was looking for 1. 91. And coming in at 2. 9 billion. A little bit more as we go to the day. Let us get to daybreak on your mobile nterminal. You simply go nowhere during the start of trading day without clicking that. We have this bloomberg daybreak. This is we have. Canave the news that outgun the United Kingdom and the nato allies. This is according to a british assessment. The kremlin will use the conflict in the ukraine to really perfect a hybrid warfare strategy. Outgunned by the russians. Almost full circle back to the cold war, that kind of story. The next tory is the new one, the brazilian real trading down. It is a cracking story. The Brazilian Senate has voted onfavor of putting dilma trial. She is going to face charges about breaking budget law. And every time you see this move closer to impeachment, and a more formal protest, you see the real go bid. One of the strongest market currencies. And a report this time in the Financial Times that the world ands staff association, international search, yes, calling in the Search Company for the replacement of the president , as he starts a campaign for a fiveyear a second term fiveyear term. Now, let us focus in on currency again. The dollar has weakened on speculation that Federal Reserve will be slow to raise Interest Rates. Caroline hyde is on the move. Berlin. Tanding by in the dollar has gotten slightly better offered. At the moment seeing it as a story of weakness of the moment, down against every Major Trading partner. Phenomenal news to look at my bloomberg, you have the world currency rancor. Every singleee major currency trading in the green, versus the dollar. We are up in particular on the south korean. Keep an eye on the aussie dollar, the kroner, commodity related as x market. Really among the g 10, this is a sea of weakness for the u. S. Dollar today. That is interesting as we move into the other u. S. Treasuries, many feeling stocks are trading in bonds to the dollar right now. Have another look at the fx. Yuan. You and eye on the this is a sign of volatility, or the lack thereof. E,is is the chines a story of dollar weakness. But notably the volatility, on my screen, the lowest we have seen since november. Look at where we are trading, currently in the red circle. Clearly, volatility coming down. There is hope of stabilization. We saw yesterday some of the data coming out of china that stabilizing somewhat in deflation, expectation will not see a suppression, a deep appreciation from the government and particularly. And Monetary Policy coming from thechinese, could stem removal of money from china. And quickly, a quick look at oil. In focus, down below 43. Weekly u. S. Data once again showing the glut is nowhere near over. Blue line is wti prices. And the white line really does show you how high inventories remain. Manus caroline, thank you very much us focus in on the numbers, reporting net profit slightly ahead of analysts estimates. The Worlds Largest Staffing Firms in the Second Quarter trend Growth Continues in july. We are joined now by the ceo alain dehaze, on the phone with me from zurich. You are the bellwether for what is going on in the world. People are saying you had a good run of job numbers, better in the u. S. , are we really on recess and watch in the u. K. . What can you tell me about those two markets. Alain so, as you stated, we delivered a solid secondquarter results, in line with expectation. The growth was modest, at 4 . Half, also a good first the margin probably flat at 4. 6 , so maintaining or leading profitability. Now, regarding the evolution in the markets, in the u. S. , we had a softening of the growth. Q2. Ad a 1 in we see the strength continuing, with different, let us say, different trends. Everything they were forecasting and the solutions, many driven are still positive. We have positive in medical and science. And in finance and legal. And we did have negative Growth Office of general staffing activity. Regarding the u. K. , we are pleased with our growth. Moment, we do not see any Material Impact, regarding the brexit. For sure, we also had some customers win, and we are very pleased with that. And we see a continuation of the strength, both in the u. S. And also in europe, and more particularly in u. K. Manus alain, when you mention brexit, that takes me nicely to the last time we caught up with you. You said that in the u. K. There was an increasing hesitancy about hiring skilled workers. What has been the ship . What are the conversation people are having . Our u. K. Companies hesitant to hiring u. K. Nationals any insight you can give us . In terms of the brexit reality and impact . Alain at this stage, we do not see any Material Impact of the brexit. For sure, we are working with a lot of local customers. For sure, also more specifically for us, we have been pleased by commercial activity and some new customers win. But being in the u. K. Or in europe, we do not see today this impact of the brexit vote. For sure, they can take time. You know, it takes at least two fors to possibly wait exercising this article 50. So, we will see how it will interrupt. But at this stage, no natural impact. Manus one of the lines that has been used in describing france, one of your biggest and most important markets, is stagnation. One of the phrases used by many commentators. The imf is warning about structural on a. What can you tell me about the state of affairs in the French Market . Alain q2, we had 3 growth in trends. Th two different it was good, adecco. But mainly due to the strikes and the bad weather conditions. But then, we had a rebound in june. And we see that this growth has continued in july and even at the beginning of, august, so we see a continuation of the modest growth in france. And i would say that a slow recovery in france, foreshore september is a very important month for our industry, more particularly in france, because that is the moment when the companies are coming back from the holidays. They look at the order book, and we will see at the beginning of september if we have more visibility about the end of the year. But at this stage, this slow recovery is continuing. Ehaze, the adecco ceo. Joining me from zurich. Theurn our attention to erdogan, rouseff, and Vladimir Putin deepening. Yousef gamal eldin joins us with the start of the hour. Take us inside. Yousef remarkable how quickly this rapprochement has happened. Having a good chat, saying they are going to set up a joint fund. Ment they have not given any details about the size or what executive it will invest in, but investors are likely the change in tone when it comes to the political spectrum in turkey. This is a chart that shows exactly how people are feeling. The moving average convergence, one of my favorites, manus, you can see here that a lot of the signalsave those buy flashing. In fact, 42 now have those signals, compare that to two weeks ago, 0 of companies on that exchange had any buying signals whatsoever. At the highest level in several months, as well. The other fascinating part of the story is of the recovery extends to other asset classes. And we are seeing that on the fiveyear sovereign debt spread, now currently at 248 basis points. From the turkish government as well, those deals are easing. Across the board, a recovery. Even the Turkish Airlines optimistic that tauris will come back. But how far will this go . Still considerable skepticism, but let us see how it all plays out. Manus . Manus skepticism abound. Are slowing. And that is possibly going to usurp sentiment. Yousef gamal eldin, thank you for joining us. Speaking of the putin and was thet erdogan, this first meeting since the downing of that warplane by turkish forces. Ouring us from moscow, editor very good to see you. How significant is this meeting between the two . This is really a big priority for both countries to demonstrate, that ties are back on track and they will fight concerns that they might be isolated by pressure from the last, so they really pulled out all the stops to show that theyre getting back to being friends, being in a czarist palace outside of putins hometown. They had a meeting, as well as a larger one of business groups. Manus this is greatly important to focus on donald trump, the world theater of politics. Putin im not isolated, and turkey, i can do what i want. How quickly is his likely to happen . How real is this . Greg on the economic front, there is some skepticism on just how fast it will happen. Most of the ties were broken after the downing of the russian warplane in november. And after an apology in june from turkey, the russians began loosening that. On,it has not turned back quite like turning on a light switch. It sounds like a trade ties will take some time. The russians have said turkish food shipments may resume, but only by the end of the year. And we do not have final word yet on final russian tourists flooding back to turkish beaches. Nut at the same time, erdoga highlighted that two big Energy Projects are likely now to be getting back on track, of powerline and nuclear deal. Manus thank you for the potential rapprochement. Greg white, our correspondent. Still with me is sarker. The world breathes a sigh of relief, if you had turkish bonds on your books, you breathe a sigh of relief when moddys did not cut. Yousef was talking about this chart. Not a bullish signal inside two weeks ago. Here you go. 42 and is then bowl, flashing a buy signal. Does politics usurp value . Saker not necessarily. Still some uncertainty because we are not sure there are elements, that they may try for another coup. Ogan has massive popular support. But it is clear that turkish funds are cheap. Manus there is a reason why something to keep, saker. Saker if you have growth and 3. 5 , which they do, and he has buildup rapprochement with president putin, which must scare political point of view in america, the stream of income in the company is opened. It opens up the gas line. So there is a good news story. But you are right. The coup. Moneymake, bunn certainly at hermes, we call it a buy. This is part of a much bigger story of thinking that emerging markets as a whole are interesting play. Manus would you be bond, equity, currency. Not naming that name, but saker in turkey, we are buying primarily stocks, companies which we think have very strong longterm value, and which are very cheap, compared to the longterm average. Longterm look, you and i have been around this for months. When you buy into emerging markets, it is a risk. It is what were talking about the last 10 years or so. Part of the game, right . Manus it is. Part of reality. I have another one. I think if you want to play the political bounty outofthebox, i have over punned myself. Saker go to brazil. Manus you dont want to go to brazil. Emerging market shopping rally up 10 . You can say everybody was right. But money has come back in. 27 bufferan real, target, by 11 on target, Political Risk . It is. The brazilian real, when you see those headlines this morning, where does that put you in terms of trading space . Saker part and parcel of the investment trading, still more waiting in asia than we are in south america, but brazil is interesting. In general, emerging markets are interesting. And we are beginning to see that with many of our competitors going back. The prices are attractive now. They are no longer as premium as they were a while back, and economics do not change. People forget. The longterm emerging markets or does not change, they you come a long way, but more attractive than developing markets. More attractive to us, they are a buy. Saker you did as the long enough for me to get my asset rally. Are we in a goldilocks scenario . We cannot have a chart on the machine without a bloomberg theme. Are we in a goldilocks situation . This is how we create this, live on tv for you. Are we in a goldilocks situation . Saker it was a complete buying signal, ultimately, certainly a time when you can see the emerging markets and developing markets, yes. Manus saker, stay with me. Coming up on countdown, no regrets. The former italian minister mario tells bloomberg the stands by his 2012 decision, to avoid the bailout. That is coming up next. Qe conundrum. The bank of england hits a snag. Dory, disn finding eys his movie. And the ceo , bob eisner. This is bloomberg. Manus you are looking at a beautiful shot of new york. 1 52 a. M. Futuresere he are in u. S. Equities. You arey unchanged welcome. It is countdown. That is the number of bad debt plating italys banks. The federal system mains to big to fail, to big mistake. Mario monti says he has no regrets over rejecting a bailout four years ago. He told bloomberg the rescue would have worsened the debt crunch, rather than extinguishing the fire, threatening the italian state, we would have propagated into a banking system. Ker, fromcountdown, sa hermes. Monti would say i did the right thing. I did not take a bailout, and i made judicious and prudent decisions back in 2012. Except bad debt is now exploded. Not a smart decision now. Saker which they cannot write off that debt. On his side of the equation, summit you mentioned to me before we came on air, looking at what happened in spain. They took the bailout. It is still barely moving. I think the problem he has used is looking at one side of the equation at what he did. He could have gotten away with not taking the bailout, which is fine. Provided he changed the Bankruptcy Law. The problem that italy has is at the Bankruptcy Law is such that you cannot get your money back quickly. And as a result of that, the banks cannot sell the bad loans to anybody else, except a massive discount. So italy in fact is the worst gridlock that anywhere. This is an academic argument. Did i do the right thing . Of course a gimmick is the right thing. But did you saolve the vessel you could . You might have been right in not taking the bailout, but you should have changed Bankruptcy Law. Not taking the bailout and not taking the pregnancy law, italy is in a worse place the rest of europe, although it is implicitly supported by the ecb. Manus we have a graphic, let us keep it up. This is the world bank in terms of effective government. Italy is worse than greece. I think this is the personification of what you were saying. Is it still in your mind ineffective . Looks like we are getting to dealing with the issue. Will they, should they, bail . Saker they can do something. By the way, there is an italy and greece difference. Italy is the Third Largest economy in europe. Remember, we set economically speaking, i love greek. But it doesnt make a difference. Italy does make a difference. 360 billion on the banks, of which 200 is never recoverable. It is massive. Summing has to be done, or else this will put strain on the european bloc, particularly post brexit, where people are jittery. Let us see what the central bank does. Manus volatility. Let us bring our attention to this. In terms of volatility, this is volatility on the euro. And i find this fascinating. We are at the lowest level in two years now on Euro Currency volatility. 6. 3 . There is a repression of volatility going on globally, is isnt there . Saker i can Maker Program more interesting. [laughter] i will try to figure out. Right . Manus let us push the envelope. We have less than 60 seconds. We can up with you that hard. But when you see these kind of repressed volatilities, would you buy protection. I am trying to look at risk, the worlds volatility, do you buy some protection . Saker as a fund, we do not buy. But we dont buy protection, but as exercise understand the market, we look at how easy it is to buy protection. And is particularly cheap. It is actually so cheap, it is almost absurd. You can buy protection for very little. And that is because volatility manus why would you not do that. I know the constraints in your fun. Saker if youre a normal investor, volatility allows me to achieve. Manus the closing lines, protection is cheap. The ceo of hermes investment. Thank you for joining me. Coming up, we will talk about qe. This is bloomberg. Extra fee Institute Warns that leaving the eu will come at a cost to the Financial Services industry. Donald trump hits the headlines again with gun control comments. Some see as an assassination threat to Hillary Clinton. Repairing relations. Turkey and russia begin mending ties ruptured by the downing of the jet last november. Erdogan meets putin in st. Petersburg. The thirdquarter sales profits topped estimates thanks to the strong box office. I am manus cranny. Futures are getting a little bit low. We are pausing for breath. You have had a cracking month on some of the equity markets. By. 3 of 1 . The ibex going through an opening rotation. This is hardly what you call a dramatically lower opening. Down. 2 of 1 despite oil having nadir. Back from its nymex 4258. Brand is trading five entry of 1 . There is this little bit of pause for thought. We have a little bit of breaking news, i will get to that in a moment from itv. Let me put up the risk radar for you. We will run through that. We will posit the executive markets, that is a hangover from asia. We ran up 3 in the past few sessions. The volumes are a little bit less. The dollar is offered. How real is the prospect of a real fed hike question mark . Ead fed hike dollar. And you have to love them for their brazenness. They take free three rate hikes from the fed reserve. The dollar riyadh. The senate voted in favor of impeachment. The lower house is discussing some of those details. Keep an eye on the brazilian real. Down. 8 of 1 at the close of trade last night. Are you ready for the bond markets to turn around us to mark turn around . And this is ticking down slightly this morning. Equities are lower and the relationship between bonds and equities essentially broken. Andan bunds are down japanese Government Bonds are negative one percent. Some of that breaking news now that i mentioned to you, Entertainment One rejected it basel for a bid from itv. Itv, many times people have suggested how are they going to grow their business . It would be through buying content. One rejects the takeover bid. The bid was from itv. One and entertainment the stock is dying over the past year. 25. 37. 7 does that offer value . Not exact the outfitting with a premium. Those are the main markets. E have the first word. Rosslyn the republican nominee told a rally that what he called Second Amendment people, those who back and ownership could step them a credit rival Hillary Clinton from becoming president. He said he wants maybe something there is something they can do. Although that would be a horrible day. Clinton may be physically targeted by the gun lobby and trump was attacked for that. Was an offset of a cool down. The ceo says one Million People have visited since they opened in june. We build something that is very large and very complex, very unique in the sense that there is a lot of it, original product and shanghai disneyland. It opened flawlessly. The reaction has been great. Interestingly enough, the visitation has come from all over china. It is taking great advantage of shanghai as a Tourist Destination particularly in the summer. the duke of westminster has died. Family had a fortune of 19. 4 billion pounds. Increasing to a five month high in july. It landed up for third month as eu u. K. Votes to leave the in june. The yield has since gone back following a betterthanexpected u. S. On a permit report. Than 120ews and more countries. You can find more stories on bloomberg. David inglis is standing by to take us through the latest on the markets. A real break below that went to level. How does that translate into the equity story . That youry good point are making. Japan is closing up shop. We are getting some pressure. We did get pressure on the equity markets. It was not just a strong yen story, it was more about a week dollar. The dollar got whacked silly. Down in every single currency. I will talk about taiwan and what it is doing to the taiwan dollar. A 12, 13 month high on that currency. Have a look at equity markets. We are still slightly higher there we go. We were going for a fifth straight day. The split today, we were looking at 55, 60 of stocks on the way down, 35 or 40 on the way up. The rest are unchanged. People suggested we may be entering one of these very short times of consolidation a four we retest those highs. It had a big drop in the dollar when japan opened this morning. That is a two day look at the taiwan dollar. Have a look at this move. This is counterproductive. Let me give this a few more at seconds to update. Have a look at this move here in the taiwan dollar. Lets get back to the intraday chart and look at what is happening with the dollar again. A clean break. That is when the cash market opens and treating at these levels for the most part. Topping the day 101. 44. Very quickly before i had a look at how the bond markets did. Manus david ingles with the latest from hong kong. We ran into a stumbling block on day two. It failed to reach the stated goal. It is the first such failure since it initially started quantitative easing in 2009. That was as investors proved are willing to part with their holdings of longer dated wants. The bank of england will announce a response, we will get that at 9 a. M. Today and we will bring that to you. The institute of fiscal studies has warned that brexit will cost the u. K. Financial Services Industry no matter what the agreement the government secures in its negotiations with the european union. It says the banks will be hit hard if britain loses a Single Market asset. Preserving that access will require membership in the European Economic area. And with potentially considerable costs of a Regulatory Regime that the u. K. Will no longer be able to shed. Joining us now to discuss markets and more is our guest. Key strategy at blackrock. Thank you for joining us. A lot to contend with today. Equity markets taking a little bit of a pause. What do you make of the blitz that happened yesterday . The market to my for me this is smart Guild Traders who want to press the market. The first failure of qe since 2009. Does it unnerve you slightly . Allocate what is happening to something we have seen happening in the markets theright some time which is search for yield. It is interesting that you asfied traders and behind this. It is interesting to think about the position of Pension Funds and Insurance Companies as well. If you think about the funding gap and what is happening, i believe that that is part of the story. I would reconcile that with the hunger for yields that we will continue to see in these as it class returns. Manus this is a 30 year government want, this is representation, 30 Government Bond yields, record low after record low. Yield, doarch for guilds in a postbrexit world, are the risks not rising for a gilt . In guilt tells you that the question [indiscernible] coming through very clearly. This is part of a broader discussion in terms of how are investors going to continue to deliver to the policyholders and the Pension Scheme members or to their investors some form of return . And this is part of the story. You go around the globe, you see the same issue cropping up and that is where i think you see emerging markets, equities and debts becoming particularly high demand for investors. That is where you see dividend payers, dividend growers. Manus 1wood maintained that that reaches taking investors, i am not saying beyond mandates because that would be illegal. And goodness knows nothing would happen in that form, did i say bpi . You have just used the word flow and that is what i want to get to. Are there any idiosyncrasies in terms of flow, we have the ftsi and three 50. What is going on in the flow that i can take away from this . Guest if i look at Exchange Traded flows we have seen consistently [inaudible] in the market that movement from investors. You can make sense of it. Logical. A bigger exposure to national diversified businesses, that is what investors are looking for so that tells me that there is concerns bubbling below the surface. Questions that i ask myself every day is volatility is unusually low these days given everything that is going on in the world. When you look under the bonnet and look at the day in and day out, day on day numbers of frequency of movements above 2 by you see that is higher than the historical low. So why the outright level of volatility seems to be subdued, there is something below the surface. Manus who will get low the surface very shortly. You have trumped me on the charts. The first time on the show someone trumps me with a chart they are welcome anytime. Thank you very much from blackrock. Results onre on the the interviews. That is next. Stay tuned. Francine lacqua will be speaking exclusively with the prudential ceo on the pulse. This is bloomberg. Manus 7 17 a. M. In london. We are back around 130. And oil, this is going to be our focus. This is crude oil at 42 60 cents. We are down ever so slightly. Saudi arabia is telling the opec it pumped 7. 6 Million Barrels a day up from june. Two people with knowledge of the matter telling us that production has hit a record. Keep your market share. Do not let anyone take your customers. If youre hoping for a offsitement at the meeting and a potential freeze that seems to be dissipating. No huge reaction in the crude market. We are coming a little bit last monthlye record. The last time a hit this was in june 2015 when it pumped 10. 5 6 Million Barrels. Records that is a level there. We will come back to that in a moment. That is oil. Very much in focus. Lets reset and talk about shanghai. Disney oh and the gates to Pretty Amazing complex. The ceo bob iger said the parks prospects are so good it is breaking ground on an expansion and he told david weston about the significance of the project. The most is one of important steps the company has ever taken. The biggest investment we made outside the United States in the most populous city in the most populous country in the world. There was a 17 year journey for me from the moment i set foot on the property to when we got the cut the ribbon. I obviously was quite involved. We build something that is large and complex, very unique in the sense that there is a lot of it. Disneyland. Duct in it opened flawlessly. The reaction has been great. Interestingly enough, the visitation has come from all over china. Advantage of shanghai as a Tourist Destination particularly in the summer. Awareness is extremely high. People are staying to honor two hours longer per visit and and vision. The per capita spending has been strong. We had estimates but we are just guessing about how we do because it is a brandnew product in a brand new market for us but we are extremely pleased with what we have seen so far. Well over one Million People have visited since it opened june 16. The prospects for this business that really strong, so much so that we have Broken Ground with expansion. Feel great about it. Western, givelast us some advice. We talk a lot about china and doing business with china and western companies, u. S. Humvees go to china. He spent 17 years my you have had a lot of successes learning how to work with and work with the most Senior Leadership all way up to the top. Er committees have companies have had a tougher time. What advice do you have for those who want to do business in china . Yes i thought about that question because i have been asked it a few times. I am not sure any two situations are the same. We came to china as a known entity in the sense that disney is well known in china and certainly not only a trusted rant but a trusted company. It took a tremendous amount of medications, a lot of candor, a lot of perspiration perseverance and tenacity. There were times when we were saying it will be too long and too hard yet we did not do that because we believed in the market and we believed in how our product would perform in the market. We never backed down. We had to create a tremendous rapport with not only our partners at multiple segments of the government from beijing to shanghai and ultimately, you build the trust where they believe what youre saying because you are saying speaking the truth and you have some faith in them and frankly, as partners, they have been great partners to us throughout this process. My only advice would be it is a big come a complicated market is i think anyone knows. It is a market that i think has a lot that does not meet the eye in the sense that even a you may feel because you spent a lot of ,ime there you are an expert there are a lot of surprises, they come from a variety of different directions, not necessarily good or bad but they exist. You have to have real patience and real commitment to be there. I think the patients we showed paid off not just because we hung in there but we were respected for having that patience. Our partners have been with us all along and we all feel great about not only the partnership with the product we have created. Lets bring you a little bit of breaking news. If you are traveling to paris from london. On euro store it will be a tough august. Real workers are to go on 70s of strike according to the rmt. It will take place across two august totaling seven days. Let me give you some of the slight detail. Atday, august 12, they leave zero 1 a. M. Until 11 59 p. M. On monday. August 15. And three days over the Bank Holiday Weekend on august 27. This is the third dispute on the railways with rmt members. If youre making traveling plans on euro star for your Bank Holiday Weekend at the moment that looks as if there are strikes set to take place. Lets talk about markets. We are just under 40 minutes away from the start of european trade. Had arica, the s p has better reporting season. Beaten predictions and 56 have topped on sales projections. Our guest joins me now. Those kind of numbers make for great reading. Does the flow of money tell you you are topping out . There is the solidity of runs that is running out of steam. I do not see that. You might have a crystal ball but if i look at investors behavior that is not coming through you. If you think about the intraday features that products have, they give you a very good pulse of the market. U. S. Equities have been the biggest category in Exchange Credit flows globally. That is massive. Third biggest the month since december 2014. Were definitely nearing there is one of two types of money. Retail money late to the party or institutional reaching for dividend yield. That have an insight where comes from . It guest we tend to say that the u. S. Market is 50 split between retail and institutional. Defending depending on the different flows. I think that the dividend part that you picked up on in terms of the institutional parts of the segment is part of that. I do speak with investors and i have heard that. It is part of the story. It is a significant shift. I would not underestimate it. Its december 2014 we have not seen this so it might mean something. Manus i am the resident skeptic. Saudi arabia hitting a record of production. Just bounced back out of that. This is quite an important backdrop toeatrical the equities story. Your perspective on oil . What reading through what large investors are doing, were still believing in the stare of stabilization. We do not see major threat cap ring and i see these released in in exchangesee and products. We have seen record numbers with u. S. Equities and emergingmarket, assets in general have been the big winners in july. The consensus was pointing toward concerns about oil, you would not have seen such numbers. Manus thank you very much. Thank you for joining me today. That is it from me. We will be back in the morning. Equities are better. A quarter ofdown 1 . This is bloomberg. Welcome to on the move. I am guy johnson alongside caroline hyde. His is what were watching. Program stumbles on day two. What will mark carney have to say at 9 a. M. . Meanwhile inco pushes its Treasury Holdings to a twoyearwill european and japanese buyers snatch them