Welcome to countdown this friday morning. I am manus cranny. We are in london, keeping you up to speed with everything that is moving on markets. And we have a couple of Different Companies that are reporting this morning. We are going to quickly tell you what is going on, we have hans nichols standing by. This is one of europes biggest steelmakers, First Quarter estimates coming in at 9. 5 billion, that is below the estimate of 9. 9. What do they earn from continuing operations in the First Quarter . At 243 million, that is just slightly ahead of the estimate at 239 million. But the First Quarter net losses , and terms of profits, there is a net loss that actually beats the sales level, coming in just under the estimate. That is the net loss that comes versus3 million euros, profit obviously a year ago, at 50 million. This is as europe implements tariffs on the chinese imports. This is as they review the with the dealing prospect of a slowing global economy. Flowyear earnings and cash forecasts still in range. That is the message coming from them. We will be speaking to the cfo, he joins me at 6 45 u. K. Time right here on countdown. Lets get to the hot topic, of course with the bank. We have hans nichols standing by. one of the key things we will look for is the outlook did they expect a counting year and a slight increase on net profits . One thing we just got was the Tier One Capital ratio, coming in at 12 . Before the last quarter, we had 10. 8 . We are still waiting to see what they have learned about the non performing loans there, what is happening in that sector. But it looks like the top line number is to be, but they are warning about 2016 being a challenging year. Manus a challenging year for the banks is probably the understatement of 2016 so far. Hans nichols thank you very much. We see japanese stocks plunge, after they come back from holiday. What really interests me in terms of the markets this morning is the bank of japan has on theey rate check alls bank of japan. They actually do something that would shock markets, actually moving without sending 24 telegraph messages to the market about what they are up to. One thing you want to keep in mind, the bears abound. This is a graphical presentation of the bear market them all of the indices tumbling 20 from the hive. That was back in may of last year. Trillion from Global Equities from the high last year. 8 million has been done, 50 of that damage that value destruction has been executed in the first half of this year. The curve is the flattest since 2007. It is it forced margin . Buyingns jamie dimon confidence. That is what investors are telling the market. Let us give you the risk monitor. Where is the money flowing . We know the asian markets are up to speed. But in terms of the other markets, the biggest twoweek again since 1998, anybody that has been in these markets remembers 1998. The Asian Financial crisis, there is verbal intervention. The bank of japan talking about a rough market, gold rallying. You are looking at gold really moving there, just coming off week in of the best four years. We are seeing gold just come back ever so slightly. Crude up some 5 . We are seeing a bit of a turn in some of these markets as we go to the trading day. To a certain extent, noncrude rallies by 5 . But gold is where the money is flowing. Let us get you up to speed with caroline. Chairne Federal Reserve janet yellen says the central bank is not to blame for the Financial Market this year. It is unlikely to unroll back the Interest Rate, winding up two days on capitol hill, she argued that the first rate rise has been widely anticipated, despite little angst in the market. The bank of australia is keeping the bank doors open to further rate cuts. The companies economy as the flexibility for further easing. Comes with the recent job strength, but the key question is the financial president , which will not be noticed for some time. The u. S. , russia, and other powers have backed an accord calling for troops into the syrian civil war. Theyre also demanding immediate delivery of humanitarian assistance to the besieged areas. We are doing everything in the power of diplomacy to try and bring an and to this conflict. Waya way that results in a of unified, nonsectarian, minorityprotecting, secular, whole state. Caroline we will be speaking to the u. K. Defense secretary Michael Fallon here on countdown. , the chairman and chief executive of jpmorgan, spent 26. 6 million buying shares of his bank yesterday. That is after it tumbled to the lowest price in two years. Sources say he believes it is cheap, after the global route in equities. Assets are down almost 20 this year. Global news 24 hours a day, howard by 124 journalists around the world. Manus caroline, thank you. Lets get you up to speed in terms of the asian session. Eb difficult day certainly for stocks. Yenknow the eyes are on the and the bank of japan. We know that governor kuroda at a meeting today. Will they want additional firepower to deal with the currency . Three years of monetary stimulus in the nation, all riddling for the Asian Pacific today. You see the regional benchmark declining, as well. Mixed performance with Industry Groups, almost all of them declining. Utilities barely getting again as we look across the broad market. China remains, as you know, reopening on monday. There is some speculation and suggestion that japan and korea bearing the brunt of the market volatility today. With china unable to ease or perhaps absorb some of the pressure. Take a look at some of the movers we have been following the across the region today. Energy shares in hong kong and elsewhere, as we take a look at some of the big mining names. Australia andng hong kong doing quite well, new crest mining a bit of pressure in the city session. Let us take a look at the others, so this retracement others is upward come a continuing to have a list on oilrelated stocks. These oil majors in hong kong had precipitous declines yesterday. You are seeing buying there, down just about 1 . Ridley checking in on south Korean Defense names. As the north korean situation istinues to intensify, seoul now cut water and sewer to the industrial complex. Theyre sending in troops to occupy. Three defense names, missed performance in the market thats all Circuit Breakers triggered on the small drop cap index. We dont see that everyday in the premarket. Manus no, thankfully we do not. We certainly do not. Let us see what the next trading session brings us here in europe. Now, do not blame the fed. That was the message from the chairman, janet yellen, yesterday. As she told congress the central bank was not at fault for the market turmoil. Janet yellen around the turn of the year, we began to see more volatility in Financial Markets. Some of the precipitating factors seem to be the movement in chinese currency and the downward movement in oil prices. I think those things have been the drivers, been associated with broader fears that have developed in the market about potential for weakening global growth. Below low risk inflation, i dont think it is mainly let us go back. Manus lets bring in colin mclean from Asset Management, it is not our fault. And the oil. N we are doing our job just raising rates. Colin i think they had too much faith in the central bankers. And they are perhaps running out of instruments. But they have been banking on the wrong issue, worrying too much about inflation and not recognizing the deflation risk. And there are a lot of indicators now that deflation is what is worrying the world. Manus we have been talking about deflation for six months. And that is not new. The sharkwe look at moves, the implied inflation rates, germany and the u. S. , we are seeing a fiveyear forward quite a slump there. And that probably points to this flat curve that is hitting the bank profitability. But it also points to the bank is down in inflation. Manus this is something we have prepared. Let me to show you this. This 30year break even rate, and as you say, this is viewed as no inflation the 30 years, according to the market at the moment. And of course, a lot of that is driven around this is a representation of 30year inflation this is driven around by commodities and oil. Look at the whip around, oil up by 5 . I mean, this whole lack of focus, as you say, the wrong focus by Central Banks but that is what has been driving equity markets for the past number of years. Will it get much worse . We are in a bear market now on the index, 16 billion has been wiped off equity markets since the high last year. How much more downside is there, or do we have to have this paralysis of fear they are talking about . To lose think we have that fear. And we have to see the Central Bank Stay with some interventions, particularly to address the fears people have perhaps over banks, overstimulation. We need to see intervention. But the underlying pattern on deflation manus i have to interrupt you, negative bond rates. There is no doubt about it. The market seems rather unsettled, we will talk about that in a moment. Is that really the your . Lower rates, more quantitative easing . Ran outo, i think they of monetary policy. We need fiscal policy, general stimulation. To bes Central Banks need targeted on wage growth, or Something Else that will do some impact on the economy. Do some good. Is reallye qe era overcome in terms of what it can do. Manus and in terms of this string of guests we have had through the door, we had stephen talking about the ominous year in bonds, they were rocked. The money has flowed out of equities into bonds. Is it as ominous a start for you . I hear what you are saying about overdependence on central bank intervention, but maybe this is just markets really fundamentally repricing that you do not get free money forever. Colin i think a lot of the intervention we will get is still joined up and targeting stock markets. There is a barometer of economic variety of regions. So i think whatever politicians and Central Banks do is probably going to support markets and encourage equities. Manus well, that brings me very nicely to negative rates, in terms of what they are doing in the stock market. The ecb first moved to negative and the the second one, bank of japan starts negative rate. I am not so sure. Let me rephrase that, sorry. Nevermind what i think the markets are not convinced. Do not think they would do much good at all. That is partly what has worried the markets. As recently, i think we need to season for banks look at this focus more on this deflation, rather than worrying about the recovery of inflation. I think it needs to see that Central Banks actually looking at the danger area. Manus collin, you will be with us for the next five minutes. Just a quick check on u. S. Futures. We are seeing equity futures get himself up off the ground at the start of the session. Oil rallying by 5 , gold coming off a high, asian playing catchup. At the moment, let us see how the rest of the day actually looks. Here is the setup. You have euro area gdp at 10 a. M. London time. A little bit later in the day, we have u. S. Retail sales. That is probably the real sort of capitulation number four markets. Risemists expect to see a in january. Tonight in hamburg, u. K. Prime minister David Cameron will give a speech on why he is focused on britains role in the eu. Nkingg up next, ba blues, Credit Suisse drops the most in 27 years. We will break it all down for you. You saw the financials, will it remain . It is 6 18 here in london. Let us get the Bloomberg Business flash with Caroline Hyde. Caroline manus, thank you. Bloomberg sources say that boeing is the subject of an sec accounting review, set to focus on the 747 dreamliner. Investigators are apparently looking into costs and sales forecast, following a whistleblower complaint. Boeing fell almost 7 on the news to close for its lowest in almost two years. They declined to comment. Bloomberg sources say Goldman Sachs, after they reached internal guidelines, they are involved in a potential investment with kuwaiti food in the middle east. Google will take more steps to comply, by removing links from all of its search websites across the globe. That is according to a persons familiar with the matter. Embracing the landmark ruler in court, the european top asking the Search Engine to remove personal information about themselves. And a bigger than expected profit in the Fourth Quarter, that is as earnings out of the Consumer Banking unit almost double. They confirmed they planned to pay a dividend and will be its first payout since 2007. That is your Bloomberg Business flash. Manus caroline, thank you very much. Banks very much in focus, have been since the start of the trading year. On snake holes is standing by in berlin. Hans nichols is standing by in berlin. Just give us an estimation, swinging to proffered at commerce bank, how do they stand apart from the crowd . Ratio is at 12 , right . Last quarter, it was a 10. 8 Deutsche Bank is at 11. 5 . They appear to be better leveraged than Deutsche Bank. Stock is down 33 , commerzbank is. Deutsche bank is down almost 40 . We do the numbers, it looks like the big beat was on that income, coming in at 187 million for the Fourth Quarter. Estimates were for about 156 million. That dividend that caroline was talking about will be the first time they paid a . 20 per share dividend, the First Time Since 2008. And on that site, they do look optimistic. It looks good. One note of caution, though. He did say the 20 16th would be a challenging year. They are still trying to write down a lot of these loans in the shipping and commercial real estate industry. That is going to be a challenge for them. But it looks like the last quarter of 2015 was a solid quarter, and they are fairly optimistic heading forward with not much more room to operate, when you look at this low interest environment. Which is affecting all of the banks. Manus lets talk about one ceo that did an aboutface, it is jamie dimon. He spent almost 30 million. This is a big demonstration, isnt it . 699 u. S. Ceos that of the the same in the past 30 days. Hans yeah, not all of them are officers. And you look at that number, there have been sales as well. But when you look at the universe of officers that are buying versus selling, buying is weighing thet selling. The stock was up some two point 9 . He bought some common shares, about 26. 6 million he has about half a million shares. This is not unprecedented for jamie dimon. Weighed2012, he also in. At that point, he bought 17 million worth of shares common shares. But he also sold at that time 13. 5 million of preferred shares. This time, we do not have a sell order. One other note on this,. His compensation for last year . 27 million. But a lot of that was in stocks anyway. But he is clearly taking cash off the family account, putting it back into the stock, showing support trying to inject confidence and a bank that he, personally, feels is undervalued. Manus well, a vote of confidence from the ceo. Hans, thank you very much. Lets bring in colin mclean from Asset Management into the conversation. Hans breaking down the commerzbank story. We are journeying to frankfurt, paying the dividend, when you look at the european banks what i have here is actually a position that these are the european lenders. My question to you is this. We are more oversold and now, ok, then we are even going back to the height of the financial crisis back in 2008. You know, catch a falling knife, i suppose. We could use all of the cliches under the sun. There is no doubt about it. These banks have been righted. How do you look at the industry . Colin i think it will be much tougher to make money with the yield curve so much flatter now, and as you are talking about on the forward expectation in inflation. It is a tough background. The european banks have not quite that the Balance Sheets in order, in the way that the u. S. Has. And i think particularly for that applies to ones were the market is targeting now. So what we seeing now on the share price is a reflection of what is going on underlying the default swap market. And also in some of these unusual capital bonds, be coco bonds chilling off sharply. Manus a member ranked return, there is the stock index on your screen for viewers. The top 600 banks down 17 . If we did a little bit deeper on thember ranking banks stoxx 600, ok, it is the italians and the greeks. They seem to have the monopoly. Do you think it is reasonable to down 43 , suisse Deutsche Bank down 39 . Is the market worried about a lack of strategy, a lack of exposure to investment . Banking is that the credit low . Continue inthey terms of their Investment Banking . Colin i think theyre going to have to restructure. For both of these, particularly Deutsche Bank, they have been trying to grow the Investment Banking. No sign a can really overtake america in this. I dont think there is the Balance Sheet really to do that. They need a more radical change. Manus what is that, to radical looks like . Colin it probably looks like the royal bank of forced to deleverage. But of the banks that have the problems in the central crisis, we have not seen that same deleveraging really go on and Deutsche Bank. Manus thank you very much. We have a lot more to get through. We will talk a little bit of brexit. Up n