Live from bloombergs european headquarters. Im Francine Francine lacqua appeared less into the markets. Lets check in on these equity markets. There is quite a lot of red. We are seeing from a lot of these investors telling us there is risk off of move. The selloff that drove stocks to a twoyear low is back on. Each of the stocks from the euro 600 down. This follows declines in asia. How much investors want to take some of those risks. Financial markets seem to be repricing Global Growth slowdown. Lets get on the second board. This is the price for gold. You can see gold advancing quite a bit here the bank is down 6 . If you look the price of oil. It has been fluctuating a little bit currently. If we have that up for you, it let me get it up for you. It is the one we are watching. It was gaining a little bit earlier. Whetherainst the main opec and nonopec will come together. There is correlation between a price in the markets. That is what most people are worried about. Is it to the bloomberg first word news with nejra cehic. Posted as well as refining profits to help the it felt 26 her from a year earlier. Rio tinto shares are lower after the Money Company scrapped its progressive dividend policy amidst the collapse and Commodity Prices. It sent up new spending cuts after a fouryear profit tumbled 51 . Am walsh set into an interview he expects 2016 to be worse than last year. We will bring you more from the interview. Network announced stalled last quarter. Jack dorsey wants to make the site more accessible. It has been unable to attract a wider audience. Francine . Francine thank you so much. Investors continue to run from risk. Riksbank continues to cut into deeper territory. Ats get to the bloomberg for market check with mark barton. Marco is todays game mark yesterdays gain has been wiped out. There it is, down for the eight day. We are at the lowest level since october 2014. Persists. Essage it could them the rate hike that the fed indicated at the end of last year, failing to assuage the fears about a Global Economic slowdown. That is the stock story. This is the central bank story of the day. Rates cutting interest further into negative territory,. 50 the repo rate to from. 35 percent. Just 10 out of the 18 economists surveyed by bloomberg forecast that move. It is a move to survive inflation. It is a move to stop the krone from depreciating. The riksbank has sculpted to cut rates further here it is market asn the fx well. A big message from the Swedish Central Bank today good check this out. We have already knew that the sovereign bond market was the best performing global developed bond market in the world. Check this out. The 10 year yield has fallen to a record low, 1. 31 because of the light. Been pushedes have so far into the distance. I cannot see them anymore. Crude oil dropping for its sixth consecutive day. We have fallen by 17 francine. 82 26. 82. That is the lowest since 2003. The latest piece of news, crude stockpiles have been delivering new york futures, expanded to a record day to show nationwide supplies drop pe drop. We are in turbulence. Francine market, thank you. Et yellen signals a delay market volatility anticipates the Economic Conditions will evolve. It will warrant gradual increases of the federal fronts rate. In addition, the committee expects the rate to remain for some time below the level that are that is expected to prevail. Financial conditions in the United States have recently become less supportive of growth. With declines and broad measures of equity prices, higher borrowing race for riskier borrowers and a further depreciation of the dollar, these developments if they prove persistent could weigh on the outcome on the outlook for Economic Activity in the labor market. Although declines in oil prices provide some offset, i do not to be the fomc is going soon in the situation where it is necessary to cut rates. Lets remember that the labor market is continuing to perform well, to improve. I continue to think that many of the factors holding down inflation are transitory. I dont think it is going to be necessary to cut rates. With that said, Monetary Policy is not on a preset course. That that would be necessary, obviously, the fomc would do what is needed to achieve our goals that congress has assigned. Francine chair yellen. How much will we see . The market has priced it in for the first half of 2017. My next guest has is that on january. This continue, kevin doran. Great to have you get are you surprised by the turmoil . There is no single factor that we can point to . Kevin i am try to remember the last time when Financial Markets were so disjointed. Seeeast since 2008, you can 2011, yet the euro crisis. I cannot remember the last time it was so disjointed. Francine we have been going around in circles. The markets are anticipating something that will then happen. You need to price what happens to these countries that are oilproducing, exporters. What happens when this unintended consequences . Kevin lets look at the bond markets. , that iss and 10 years a market that is pricing in zero no inflation for the next decade. That is what the bond markets are telling you. The bank it the Banking Sector is trading at less than half price. If i go to the proxy sector, with the proxy sector, if i look at the socgen, it is priced in at 70 to 80 decline. Francine this is the reality here at i remember when we were having the debate and yellen was saying she was going to write hike four times. Now it is a reality they can hike no longer. Has a feedbackl mechanism on the economy. , theinancial conditions monetary conditions are not there. The labor market is strong. There is no reason there is a slowdown in growth, but no reason to be looking at a recession. Francine china is a difficult to read. Are you not concerned this is a symptom of an ailing china . Were looking at a hard landing in china . Kevin called what we are saying this kevin we are seeing the friction affect. That is not going to be frictionless. What youre saying in the industry, they do not know they accept related what happened in the recent past. As a result, that whole industry [indiscernible] francine d think the market is irrational you think the market is irrational . The markets keep on falling everyday. Kevin the market is the worlds richest sentiment. What we are seeing is human beings as human beings. All that is taking place is human beings thinking i have my money in the market, it is currently falling. Francine we will explore that good kevin, thank you very much. Stay with bloomberg for more on the central bank it theme central banking thing. We speak to the riksbank governor. A lot more coming up today on today show on todays show as well. Google analyze the industries we will analyze the industrys prospects. Whether the u. K. Should remain in the eu. Total surprise. We will break down estimates, beating numbers. Francine will come back. It is not a total surprise that market turmoil and the risks we are seeing, financiers try to reprice risks means there is a selloff in europe today. On to show you the price of oil. What has been happening to gilts. The vti down the percent. That means for the first time in a long time it has touched below 27. Cents 26. 64. This is after we heard from Central Banks the additional stimulus is at the ready. Heard from janet yellen that she may not be able. O increase rate hikes we can see 10 year u. K. Bonds at 1. 30. Lets get to Bloomberg Business flash with nejra cehic. Spent on network equipment. The company cap costs in check. Zero Zurich Insurance reported a loss after damage claims. Tengion damagehe the tengion damage in china. Fell in extended trade after the social network announced that user growth stalled in the last quarter and said that sales will miss estimates. Jack dorsey wants to make the site more accessible but as the name thats what has been unable to attract a wider audience. Francine it has been a rough week for bank stocks. Down 20 on the months on the month. Earnings that missed estimates. They took a hit on the Investment Bank and potential legal costs. The deputy ceo says he remains confident that the industry is not in crisis. Today hasuation nothing to do with the situation we saw in 2008. We are not in this type of crisis, not at all. The Banking System in the world is much more stronger. The average capital has been doubled. We cannot compare the Current Situation with what we had to manage in 2008. The fear from the investors is coming from the potential no payment of the coupon of your debt. [indiscernible] situation is at the level that it is no risk for us not to take a coupon. In our situation, there is no fear regarding debt. Us kevin still with durant. When you look in the banks, banks have been taking a battering. Is does this come down to malletts. Malaise . Kevin the Banking Sector is example of how much bad news is priced into the sector. Numbers assocgens an example. On 60 euros with equity on the balance sheet. The market capitalization is 25 billion. While they are Still Producing returns on equity, it doesnt that sortense to take of writedown on the balance sheet. Francine i agree. Compared to u. S. Bank valuations are a lot more harsher on european banks. Why . Are we pricing and a possible breakup are we pricing in a possible breakup of the eurozone . Kevin so you look at what is been priced in. Youre looking at a slowdown, even recession within the eurozone economy, such that you have to write down 10 . This is the town with the cost of risks to nonperforming loans in the portfolio are falling. Francine what are the pricing in echo they must be looking at geopolitical risks. Is it Marine Le Pen. Is it Marine Le Pen . Discounted banks in europe happen for a reason. Kevin they happen because of the sentiment. The only thing that can possibly have that sort of that cement is if there is generally that sort of that cement is if there is generally lets not forget the chinese Banking System is insulated within the chinese economy. The people who lent money to the largely chinese domestic investors. Usecontagion effect that desk that you would see in the u. S. Bank system in 2008 we do not see the same level whatsoever. Francine do think that Deutsche Bank was unfairly punished . Kevin i think Deutsche Bank music take a serious look at themselves i think Deutsche Bank needs to take a look at themselves and decide whether they want to be in this world. Is european Banking Sector recapitalized. They decided which areas they want to be in. There are still your extended charters, your work your standard charters, your barclays. They are now producing returns into the high single digits. See youasily could ease expectancy. Francine up next, profit takes a tumble at rio tinto p it we look at why sam walsh says what will be worse than 2015. Coming up next. Francine francine welcome back to the pulse. Rio shares are down more than 5 . Spoke to sam walsh this morning. Industry is a cyclical and he goes through cycles. We are in a strong position to see us through every aspect of the cycle. The action we are taking in terms of reducing our costs and capital and revising our dividend policy actually means we will continue from a position of strength. Guy do you think 2016 is going to be the toughest year for the industry in a while . 2016 is looking like it is going to be a tough year. I said to our employees that i expected to be tougher than 2015. 2017 is too early to make a call on. We are very focused on ensuring the longterm stability, the longterm strength of the business. Francine for more lets bring in stuart wallace. He is our executive editor. We have a great story on bloomberg saying the mining industry. Now their dividend policy is in question. Stuart they are doing a sensible thing. To think about this way. They had a 10 year bull market, a progressive dividend market. Sam walsh pointed out tough times as likely to end anytime soon. These are principles these are perfectly sensible things to do. It is not cataclysmic. Ill think anyone will be disappointed. Francine what will they do with the cash . M a . Stuart i think they will look at projects. His of what we have seen companies trying to sell forward their production. That is not really a business that rio is into. Possibly. It is showing up that Credit Rating more than anything else. Francine how worried should we be about commodities . It is tough, but is it cataclysmic . Stuart for some of them it will be bad news. Maybe not a company the size of rio tinto. Dependent on three main commodities. Even so, it has a spread of assets. It is the small ones i would be worried about. Echo stored, thank you for coming in. I highly recommend you going on to bloomberg. Com. Way, below 27. We will be back in two. V. Welcome to the pulse live from headquarters in london, total Beat Estimates in production and gasoline and refining profits helped the Company Weather the crute slump and if fell 26 from a year earlier. Io tinto shares scrapped their dividends. The second biggest mine battling to keep the Credit Rating. Also set out new spending cuts after fouryear profits tumbled 51 . C. E. O. Sam walsh said in a bloomberg interview he expects 2016 to be worse than last year and sees a distress in Major Players in mining. Well bring you more shortly. Twitter fell in extended trade after the social network announced sales will miss estimates psms the c. E. O. Wants to make the site more accessible but twitter has been unable to attract a wider add yeps. Global news 24 hours a day powered by our journalists in news bureaus around the world. Francine . Francine thank so much, njera. Weve seen pricing of risks. Lets go to the news. Mark . Mark lets start with rio tinto where the price was down as much as 9 which was the biggest fall in september of 2011 and ditched the progressive dividend policy and set out new spending cuts as its trying to cave over the massive plunge in Commodity Prices that sent a profit down by 51 and the payout for 2016 wont be less than 1. 10. Its held to 2015 diffident to 2. 15. Joining the likes of others abandoning dividends as a safeguard against the big slump. In Commodity Prices, the shares were higher and up by 1 today and raised the outlook for 2016 emits growth in its brand and stronger order, profit and revenue will rise at a doubledigit growth rate and margin should be stable and net income rose better than expected 12 today. Were waiting for the arrival of casper rothsted who of ourse will take over as c. E. O. His tasko battle nike and become number one once again. We saw gen falling, frances second biggest bank, shares down 13 and Fourth Quarter profits missed estimates, earnings that the Investment Bank fell and set aside potential for legal costs and the bank signaled it may have difficulty reaching the profitability target this year because of headwinds that include record low Interest Rates and volatile Financial Markets and gen is down 13 . These are the big gainers and losers on the stock 600 today which is down by 4 . Look at the big gain by a country mile, mehta. Thats the most ever. Milan dmbing with a legal address in holland and run from pennsylvania in the United States says it will buy mehta in a cash and stock deal worth 7. 2 billion adding the Swedish Company special drug products and european operations. What a day for mehta shareholders. Francine . Francine thank you so much. Euro zone finance ministers are gathering in brussels to discuss a bailout review. The meeting comes as the stocks have dropped seven consecutive days sending equities to a 26year low. Lets get more from hans. How much additional cash does greece need and what are the stumbling blocks to access that cash . Hans the stumbling blocks are the colleagues of the review of one part of the program. There seems to be a great deal of concern whether or not theres a political will in greece to get these next stages done. What were talking about is the disbursement of 4 billion to 6 billion euros and gets them through the beginning part of the summer and not the back half and weve seen the process for the economy and particularly a stock market thats been battered and down to 26 year lows and you look at the historical chart, its not a positive story for greece. The last five years have been negative as well and we have competing economic forecasts. The European Commission said you had 0 growth in 2016 and greeces central bank puts it 0. 7 and theyre saying growth for 2016. Not a lot of confidence there. Pension reform, you look what greece spends, its about 15 of g. D. P. Its about twice as high as the average. You have average payments around 900 euros and 2. 3 million pensioners. Thats the big question. Heres the other one, francine. Whats going on in terms of cronyism since the current greek government. And in the last three months youve seen an additional government affiliated positions, the sereza party get position. Thats what the finance ministers could be focusing on and do they have the political will or the majority. They have a threeseat majority, the coalition in the house. Thats razor thin and strikes in athens and we could be back in brussels sometime soon talking about this. Francine thanks so much. One we have to keep a close eye on. Up next, total is a surprise, frances Largest Oil Company beats estimates by ramping up production in the face of slumping prices. Well break down the results coming up next. Saud