Glencore goes from doom to dividend in the space of year. We will break down the numbers. Its turn our attention to what is happening in the market. Show you what the gmm looks like around the world. Yesterdays solid session, and a big outperform a, italy up id two points, 2. 3 . This idea that maybe the ecb will step up and deliver for italy if we get a negative result in the referendum continues to move markets. Also what is happening with italy. Iron ore surging overnight in china. The medals are definitely doing well. As you can see on the commodity board. They continue to power ahead after the massive move we saw yesterday. The dollar is weakening, we down by. 3 of 1 . Mnucll watch what stephen hin does. Still trying to understand the parameters of what this new cabinet is way to look like. That is a significant factor. We will continue to talk about it. Bond markets waiting for data, there is an awful lot of data coming out of europe. Let me run you through where the fair value is. We are expecting a negative start for european markets. The stock safety cooled down by. 3 of 1 . Lets catch you up on Everything Else you need to know. Lets get the bloomberg first word news. Juliette chinas official factory gates has climbed to match a post 2012 high thanks to a credit your recovery of heavy industry. The manufacturing pmi rose to 51. 7 in november. Beating estimates. At the same time, and put prices jumped to the strongest rating since march 2011, signaling that inflationary pressures may be building in the worlds secondlargest economy. U. S. Treasury secretary nominee Stephen Mnuchin has outlined an economic agenda aimed at almost doubling the growth range of the current expansion. Speaking to reporters he said the new administration will boost jobs by making tax reform and overriding priority. Will beirst priority the tax plan and the tax plan has the corporate aspects to it, making corporate taxes sure we repatriate trillions of dollars back to the United States, and the personal income taxes, where we will have the most significant middle income taxcut since reagan. Seentte the dollar has its best month against the yen and more than two decades. As rising treasury yields at to allure. Nbacks along with allure. Along with increasing bets the Federal Reserve will raise Interest Rates this month. Markets are eyeing the prospect that president elect Donald Trumps policies will fuel inflation. Britains chancellor exchequer is visiting scotland to discuss the challenges of brexit. Dilip hammond will stress the need for the country to remain part of the u. K. He will meet first minister nicholas sturgeon and talk with Business Leaders in edinburgh. This comes after the government contributed a hundred Million Pounds to boost scottish infrastructure. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Crude oil prices are soaring by agreeing to the first Production Cuts in years. 1. 2 from opec and 600 thousand from nonopec. A total of 1. 8. So hopefully we will have a very high level of compliance. This all gives a positive outlook for the market. While industry has seen a high level of demand over the past years and i think it will continue over the coming years. The Oil Important for industry to have a healthy level of investments to balance supply and demand. That is what drove saudi arabia to rich differences with other producers inside and outside opec. Tosef lets take you back annemarie. It looks like saudi blank. What are the details . They did when he came to iran which is one of the biggest standoffs they had coming into this meeting yesterday. The saudis have agreed to let you rent pop more. They will be iran pumped more. Presanctioned levels, just over 3. 7 Million Barrels per day. A biggers are taking cut when it comes to that. Also the iraqis made some concessions. As a group, all of them are taking a cut except libya and nigeria. Those two countries have so much strife within weighing down on their production that they would not be able to handle any sort of Production Cuts. Yousef now we move on to the more difficult bits. Nonopec, how is that going to work . Russia was critical in this deal. Or for weeks they said they would not cut production and then yesterday in the meeting, the algerian oil minister told us that what they were they called and said we are willing to actually make a cut and making a cut even more than we 200,000, a cutas of 300,000 Barrels Per Day and the algerian minister told us when he came out of the meeting yesterday. Take a listen. During the meeting when we were drying up the accord, and we still had some Difficult Administration questions to solve which are essential, the Russian Energy minister gave the information that he would reduce by 300,000 barrels a day. Algerian oil minister speaking there. He was critical on getting rush on board. He flew to moscow and that with Alexander Novak and the focus turns to these nonepic members nonopec members. Opec is looking to them to tally 600,000 barrels a day. This is critical in order for opec to reach an agreement that these nonmembers and members outside the cartel will agree to put cut production. Yousef thank you. She has had a busy week, beginning to wind down. Maybe in some ways the energy story is just winding up. Joining us now, Jonathan Bell, who oversees 9. 5 ilion dollars on behalf of clients. Good morning. Does this change the investment thesis that Energy Oil Prices are climbing . Guest it is part of this reflation trade with trump. And it is an interesting thing. What you are saying with opec is they were struggling. Then you had trump announced was going to boost spending in the u. S. On shale. It would be tougher. There was quite a lot of pressure to say what is as look at what is happening, do we want to carry on with oil prices so low and if you cut production by 4 and boost the price by 10 that helps your budget a bit. Yousef opec has done what it has done. We have seen prices rise but if trump does what he says he is going to do them and that should increase supply. It should produce the fungibility of some of the stuff is well and and the ability to trade on the open seas and global market. That should be a negative. Guest we have heard ministers save because of the underinvestment over the last couple of years, the price would be rising anyway. You do not need to cut production. We have seen very little investment, theres going to be a shortage of supply. There is a bit of an issue here. If you raise the price that it becomes more attractive for shale producers, they start producing and you push up supply somewhere else and that is always the problem that opec has. This is the brand price of trading, 52. 29. Goldman sachs believes we can go more into the 60 area but then pull back from that. Is this as good as it will get for opec . I think it can carry on going a bit further than this. With shale production picking up in the u. S. , that will not happen than in the next few months. There is still a bit of oversupply in the market. It takes time for that to work through. That is yousef only in the short term. Guest you have problems because channel producers have picked up production by next may, that is when the next opec review meeting is. So what are they going to say than when they see the pickup . Flow forpretty good oil at this level. You have got this oversupply that is now falling out. That is hopefully going to be the best position for the next six months. We will have to see and six months time if shale has picked up enough that it starts becoming an issue. Shell, mi buying bp, conoco, mi just buying future contract in the oil market . You know that you can buy the oil stocks barrel benefiting from this. The oil stocks have a problem of dwindling reserve. Have overextended in terms of dividends, they have underinvested in reserves. If you are investing in your company shortterm you will get a boost. Find the companies that are geared to that. Longerterm you have an issue in the Oil Companies because of the longterm nature of that business. Yousef why do i pick up on this . Guest you could play the future and say i am going to make some money there. You could say i will find the Oil Companies that are geared to this and benefit but you would not want to be in the longterm. I would not want to buy stock, i am thinking i am buying it short term. Youre going to stay with us hopefully. Jonathan bell. 20 more to talk about. We need to talk about china, what is happening in the honda market. After that 30 year market, are we starting to get a little bit tired . Bowl over little exhausted . Global bonds have seen their 1. 7 monthly meltdown as trillion in wrappers. And bus to boom. Goes up in a year. We are expecting it to open 2 higher. The market selloff was lower. Classes are being made to revamp the u. S. Tax code, but how will the world react if america cuts Corporation Tax . That is a big question. This is bloomberg. London,7 44 a. M. In eight 40 4 a. M. In berlin. Lets catch up with what you need to know. Here is the Bloomberg Business flash with juliet. Juliette they plan to pay out one million 1 billion annually. They have seen the share price triple and profits bolstered by a coal and zinc rally. Llp isirman of bloomberg a senior nonexecutive director at glencore. Citigroup is considering moving some of its londonbased equity and are but if traders. After brexit is triggered. The u. S. Firm is already in discussions with the german financial regular about necessarily necessary approvals. A spokeswoman said we are evaluating options as negotiations between the eu and the u. K. Continue. Credit suisse has frozen dozens of accounts as it tries to determine if u. S. Clients are hiding any from the Internal Revenue service, according to a person familiar with the matter. Any client activity on these accounts network requires approval from a group within the bank. A spokesman climbed to comment. China declined to comment. Buyers of super luxury vehicles costing 189,000 or more will be hit with a tax from today. It is the latest bid to combat conspicuous consumption and promotional fuel efficient vehicles. That is your Bloomberg Business flash. Guy glencore called up three and 3. 5 . It was quite a november. Many in the bond market would forgetect as the as the shock election has had a massive implication for the markets. Not one that many people anticipated. For stocks, we have been hitting highs on all three. Four major u. S. Indices. For the bond markets it was a number november to forget. The bull markets ended with a bang. This is the Bloomberg Barclays global aggregate return index, it lost 4 in november. The deepest slump in the gauge since its inception in 1991. 7 billion trillion dollars have been lost in one month. If you can see. That is where you should be focusing, down here. This goes all the way back to 1990. That is the biggest outflow we have seen. Still with us, Jonathan Bell from stanhope capital. Should i have fixed income in might portfolio . Jonathan i would avoid fixed income in general. We have had this very long bull market you referred to. That has been influential on so many assets. That has come to an end. We are probably entering some sort of fair market. You need to understand that the bond we are market does not mean that you get a crash. Look at what happened pre1980 you had 40 years of losing money in real terms to bonds most years but only by around. 5 to 1 every year. You had this gradual erosion. Bonds will not make you money there are areas but generally yousef it hurts for a long time. Guest how does that affect other assets . When you have had a bondbull market that has even every other acid a boost, particularly if you think of Something Like equities where you are comparing the yield you can get on equities in red and returned you can get in bonds. Everything looks at bonds as a Reference Point. You have to change what your Reference Point is. It is not only impacting bond market, it is impacting the equity market. You will still get better returns. Will the low return continue . 30 years of muscle memory take teaches you a number of things. The reflective action is to have so much of the stuff in your portfolio. Even in the past you have not done that badly except for periods and sometimes you have done well. At who owns net bonds create central bankers. And Pension Funds that are looking to match long dated liabilities and they say we do on prices fall because our liabilities fall. We are happy. That is not a problem. They are the main holders. Most investors have switched out of long dated bonds. It is less of an issue. What they have switched into is you have gone down the credit spectrum so you go from government bonds to Investment Grade and Investment Grade to highyield. You switch into utilities, and so you need to look at your portfolio and say, have i got bond proxies that will be hit by that . Perhaps more than just saying i am fine, i do not have long dated bonds. Shall i sell anything that pays a dividend . How ugly it has been probably it has been bid up. Want companies that are consuming cash, not kicking out cash . Jonathan you have to look at two areas, the people that sold bonds to buy highyielding equitys, they are the people who are going to be selling out. Anything that is highyield not looking at much growth, it should be coming out of that. You have to look at your Fast Growth Companies. Your Fast Growth Companies have benefited from a low discount rate. Profitlow discount rate you make in 20 years time are almost the same as they are today. Once you start having higher Interest Rates the profits are not worth as much. Guy Jonathan Bell will stay with us. We are eight minutes away from the european open. Next, from bus to boom. Themoves in glencore, worlds biggest mighty trader said it will reinstate dividend. We will discuss that and a little bit more. It minutes to go till the market opens. This is bloomberg. Yousef it is 754 in london. 8 54 a. M. In frank heard. Lets talk about what we should be watching. One stock could be glenn per. Glencore. We are waiting to see how the stock opens on the trade day. At a policy of dividend reinstatement and what that means is we will see higher prices in terms of the stock listing. The stock has come back strongly from the beginning of the year when it was saying this is a great business, do not worry about it, well continue to perform and make necessary cuts and make the changes. It has turned around for him. Part of that is data out of china which he was describing as something of a black box. Coal has done well this year, copper has come back strongly, it and reinstating the dividend, who would have thought that . We are expecting a mildly negative start. That market open is four minutes away. This is bloomberg. Guy good morning. Welcome. You are watching Bloomberg Markets, the european open. Moments away from the start of european trading. Let us give you your morning brief. Opec lives. Brent keeps climbing, soaring. As christmas come early for u. S. Shale . Ending with a bang. The 30yearold bond bull market runs out of steam at a record one point 7 trillion is lost in the month. How bad could it get from here . From boom to bust and bust to boom. Glencore goes from doom to dividend. The opening price in just a moment. Let us take a look at where we are. We think were going to get a negative start for european equities at this morning. It was a very solid day yesterday. Greece and italy were the real out. Most market open down by 0. 3 . That me take you to the european open. This is the picture we find ourselves at the moment. To se is opening up 0. 1 . G by we are expecting a little bit more positive, some of the stocks opening flat. Are expected to open it negatively as well but again, not by much. Down by 0. 1 . At any index level, some would say, quite dull, but im telling you, there are interesting things going on beyond the surface. There are interesting things happening under the surface. Let us see what is going on. Perhaps, unsurprisingly, energy leaving those gains in the index up 1. 5 , really carrying it. Bob materials up, 2 5 of 1 . In the financials, middle. We will take a closer look at that shortly. Let us see how 10 year gilts are holding up. Currently, unchanged, just a tick higher for the yield. It stands. Opec reached at the first Production Cut in eight years. The Options Market went completely bananas. Youre looking at 580,000 trades, a new record. That redline is your average, options intion of the market. Very interesting as a lot of these traders try to make the most out of the sharp moves we have seen. Hes are some of the stocks we are watching for you this morning. Make anis planning to improved offer to their rival. Trying to overcome the options of the takeover. Now the improved offer, it will be improved over the previous offer of five euros a share. Pos up. N postnl up. Ubs put out a note saying commodity and equity prices have rallied hard this year and earnings momentum will need to have a Balance Sheet. We watching financials ahead of the italian referendum. A big protest vote comes through according to city and liquidity will weigh heavily on the shoulders. Let us talk a little bit about what is happening. To be specific. While we are on the subject, i want to show everybody this chart. Ig has had an interesting time of late in terms of his net worth. His is a chart of igs net worth. Lows, and he was banging on the table saying this business