Evolves. Well have to be careful for how that goes for france. A crude reality for bp investors. Shares sink after earnings hit a tenyear low, as the oil giant misses expectations with profits falling for a second consecutive year. Fiat chrysler says his vehicles are fully emissions compliant. And chinas fx reserves drop below 3 trillion for the first time in three years despite trying to stem the currency outflows. Hi everybody. Good morning. Welcome to the show. We have an hour together. Its good to have you with us. I want to kick off with some flashes. The iranian Supreme Leader is responding to President Trumps recent statements with regards to iran. Hes stating no enemy can paralyze the iranian nation. Hes saying that trumps demands that iran be afraid of him but irans response is no. Hamani also showing iranians will show their response to trumps threats on friday, the anniversary of the 1979 revolution. This on the back of the Ballistic Missile the iranians tested. They say it did not go against the u. N. Resolution that was put in place. The u. S. Says it is a violation of that. Well continue to watch that. European equity markets. Were an hour into trade. We were slightly mixed on the open. A bit higher at the moment. Just sitting steady at the stoxx 600, and were seeing that reflected in the European Equity marke markets. Ftse, xetra dax, cac 40, ftse mib all higher. The french banks, too. The french banks are bucking the trend to the down side. Not seeing gains. Youll notes likes of bnp paribas lower. Fullyear revenues rose by 1 despite a lackluster market in 2016. Net income was up by 15 from the Previous Year at 7. 7 billion euros. The french bank proposed a dividend of 2. 70 euros per share. Lets get the details on this nancy joins us from paris. Investors trading bnp paribas down substantially. What are they focusing on . The big factor sis on the Fourth Quarter income figure which fell shy of expectations. As other analysts point out at ubs, on an underlying basis this was a beat. Part of the strength in the net income coming from the corporate and Institutional Banking segment. This apart from the retail segment which continued to show weakness both on revenues declining right here in france and also at the italian unit as well. Perhaps investors were hoping to see the Retail Business pick up a bigger share, boosting domestic markets which has been trailing the performance on the cib for quite some time now. Nevertheless, performance over the full year was strong. Investors are also honing in on the outlook, the big 2020 plan that bnp paribas unveiled yesterday targeting r. O. E. Of 10 that fell shy of expectations. First and foremost, looking back at the year that 2016 had in store for bnp paribas, i asked the ceo whether he was concerned about diverge against between the cib and the market. You look at the total bank, the year, 2016, started in a lackluster way. So the bank has evolved quite strongly during the year. If you look at total bank, top line is up 1. 1 . Interest rates are in the low areas. Our cost of risk improved well by 14 . Costs remained under control. In the end we clocked in at 7. 7 billion euros, which is up 15 . At the same time we have a di dividend of up 17 compared to last year. Thats how the bank performed. When you look at the breakdown by divisions, does it concern you that the french retail side within domestic markets is still lagging . If you look at our businesses, cib has been doing well, domestic markets, when you look at the loan volumes have been doing well. Theyve been growing loan volumes in all of their areas. Its true if you look at france, there is a bit of an impact of the low rates environment. It is true. That has improved during the year. We see loans pick up again during the year. We have 4. 2 growth in the last quarter. To be frank, one of the other things that weighs on what we see is that the stock markets have not been very positive. There has not been necessarily a lot of activity going on. Well have to look how that evolves during the year 2017. I would remain careful when it comes to guidance for france. The bnp paribas cfo striking a confidence tone on some results, including the reduction in risks overall. They have a plan to reducing costs. But he did strike a cautious tone on the domestic markets saying they have to keep careful watching the guidance here in france. He did not mention specifically the politcal risks, but i asked what the bank was doing for political surprises coming up in the election. When everything happens, typically there is time in which things unfold and we are adaptable. If we go back to the brexit topic, there is things changing. We are a european bank. We do have clients in the uk. And for us the most important thing is to keep serving unit clients. Well see how these things unfold and see if we have to do changes on the fringe to continue to serve those clients. That question is applicable everywhere. We will continue to stay adaptable. Thats the message coming from bnp paribas as we approach a big election season here in france. Overall investors will be perhaps taking a look away from the results this morning and focusing on that 2020 plan. Analysts from ubs saying again overall that r. O. E. Target of 10 may be below some expectations, but these are made on conservative consumptions, and Lars Machenil saying they are staying on guard for political activity. But they are confident that theyre moving towards a new Investment Plan that will continue to reduce costs for the bank going forward. It appears investors remain unconvinced this morning. Back to you for now. Great stuff. Behind you, it looks like the eiffel tower is cut off because of the fog. Yes. I know. Foggy, rainy day here. Like half an eiffel tower. Nancy, thank you very much. Well chat very soon. Shares in bp trading lower after Fourth Quarter underlying replacement cost profit fell below a millions, missing forecasts. The Lower Oil Price weighed on the numbers. Bp said it expects 2017 Capital Expenditure to be 16 billion to 17 billion. We spoke to Industry Analysts after the earnings to get their reaction to the numbers. Bshgsz p wip has to figure oy will pave their way in the world with 55 oil, the answer is they cant. And theyre keen to try to lift their skirt and tell you what they got from a production and Development Aspect specifically. But these numbers today in hand have to be deemed disappointing. Most of the pure companies have taken the break evens down to 50 or less. Bp does stand out. They reference having to make more investments in some portfolio additions they made over the course of the last quarter or so. If you talk about a 60 break even, on our forecast or using future strip that means they would not be breaking even in 2017. Statoil missed forecasts in the Fourth Quarter as 2. 3 billion impairment charge weighed on its earnings. The Norwegian Oil giant posted a net operating loss of 1. 9 billion, against expectations for more than 2 billion in profit. Statoil is keeping its dividend policy saying it will spend the same amount on Capital Expenditure this year. Tim edwards us with us this morning. Very pleased you are here. Talk to us about what weve seen in earnings so far and a whole bunch of Companies Reporting this week. You say 70 s p 500 Companies Report on the 7th of february. Around the next three days a third of the index reporting. From what weve seen so far, the broad picture is so far so good. Weve seen around twothirds of Companies Beating estimates. Not too exciting, companies very good at beating estimates and managing down expectations. 5 Earnings Growth verses a year ago, 8 . So far so good. Particular areas that stand out. For example, financials. Yes. Financials have been doing well and also have the potential to do better. That is a trend related to u. S. Regulation and potentially taxation. So financials so far have been reporting good earnings. Thats highly encouraging for the markets. On the less impressive side, we just have been talking about, the energy companies. They have disappointed. That uptick in the oil price we saw for much of last year has very much softened and the trend diminished. Were not seeing great earnings reports from the energy companies. Why do you think it is theres so little volatility . So one of the really interesting things about the markets at the moment is how much news there seems to be, how much excitement there seems to be and how Little Market volatility there is. This is true for europe and the u. S. Also true in expectation terms. So the vix, which is our forward looking measure of volatility is very, very low. One way to think about this is to understand that in the current environment there are winners and losers being created all the time. Individual companies are moving around just as much as they usually do. Whats missing is the thing tying them together. That correlation. So with that, as Interest Rates move up, as it is differentiated set of risks and opportunities, we see a lot of Stock Movement but at the market level its all canceling out. Its the power of diversification. How does european volatility compare to what weve seen in the u. S. . You see a similar story. Part of it is driven by strong spreads in sector performances, part driven by spreads in countries, different currencies. Winners and losers. When you drill down and look through a microscope at an individual company, theyre moving around. When you zoom out and look at the overall market, you see low volatility. There is something of an exception to this in europe where there are a lot of concerns coalescing around late march early april, which relates to the french election. You read my mind. We have seen a jump in french yields or an increase in french yield yields following polls that say le pen could be a follow up to macron or fillon. Do you think the safe haven is buying u. S. Treasuries again . Youre taking a risk there. I think german bonds will be the safer option. The interesting thing is going to be will this play out similar to the comparisons that you can make, populist movement, populist national movement, polls are all wrong. Maybe a lot of fear leading up to the election. If its anything like last time, that fear will collapse and compress no matter what the result is. In that i think looking at french and german bond spreads is an interesting indicator. Looking at european volatility and looking at the european currency, the euro is also going to give you a sense of how much concern investors are building up around these events. Okay. You segued into a currency chat. Stay with us, so we can get back and talk more about currencies. By all means get involved. Many of you always get involved too late. I already have gone home. I cant do the show from home. The address is streetsignseurope cnbc. Com. Or also find us on twitter louisabojesen. Im happy to incorporate any questions or questions that you might have. Coming up here on street signs, hitting top gear. Honda and Hitachi Announce plans to collaborate on electric vehicles. Well hear what is driving the deal in a couple of minutes. Also we will be talking more about disney and cybersecurity. King arthur ready washington charge empress wu charge in chinese king arthur charge let your reign begin. Evony, the mobile game. Download now. Good morning. Welcome back. Youre still watching street signs. Im louisa bojesen. Pandora shares hitting the bottom of europe after warning of a slowdown in 2017 revenue. This is the danish jewelry maker. They expect a 13 to 18 rise in revenues this year. This as pandora expected an increase in net profits in the Fourth Quarter and announced three extraordinary dividends. Fiat chrysler shares are selling off after french investigators referred the automaker for a possible prosecution over diesel emissions. A spokesman for fiat is saying its vehicles fully comply with emissions standards and it was ready to cooperate with authori authorities. And honda teaming up now with hitachi to jointly produce motors and catch up in the electric vehicles market. The nikkeis makiko has more. The two firms announced this afternoon a plan of a joint venture for electric vehicles. Honda has been long known for keeping all of its r d in house, but as the focus shifts from engines to electric vehicles, it was struggling to stay in the race. And hitachi started out as a motor maker. Washing machines said to use the same technology are extra durable. Drawing in an established motor maker, honda hopes to have a new line by the end of the year. They hope to increase profit by selling motors to other auto makers as well. Honda said that by 2030 around twothirds of all honda cars sold in markets overseas should become electric, including hybrid vehicles. That explains how much importance the firm is placing on this tieup. Hitachi is uniquely positioned as a parts supplier since it is invested in batteries, autonomous driving technologies. It also shows how relationships between carmakers and parts suppliers that used to be bonded with connections are rapidly changing. Back to you. Makiko, good to see you. Thank you very much. Chinas Foreign Exchange reserves have fallen to a sixyear low. Data from the pboc show that reserves fell by 12 billion in january and are below 3 trillion for the First Time Since 2011 this drop marks the seventh straight monthly decline as capital outflows pressure continue in china. Then we have the u. S. In the u. S. An Interest Rate hike in march could be on the table. Voting fed member Patrick Harker says another increase of 25 basis points should continue. He supports three rate hikes in 2017. The u. S. Tenyear treasury yield suffered its biggest oneday slide since june. Referring to that in our chat a couple minutes ago. Investors seemingly sakie i see Political Uncertainty in europe. And mario draghi defended euro. Mr. Draghi fought back against claims from the Trump Administration that germany is manipulating the single currency. Its latest report to congress released on october 14, 2016, the u. S. Treasury itself stressed that germany does not manipulate its currency. The reason is that germany does not satisfy all three criteria used by the u. S. Treasury to identify unfair surcurrency practices. February 11th marks the First Anniversary of the socallsocal socalled dimon bottom. There has been no significant pull back in the stock since. Dominic chu looks at the biggest winners. Reporter this week will mark the oneyear anniversary of that market bottom we saw on february 11, 2016. One that a lot to of people out there call the dimon bottom, but jamie dimon bought a lot of his own stock, 500,000 shares of it on that day. His stock has been on a tear since. Like the overall market. If you look here, just since that february 11, 2016 period the market has gone up by about 25 . Had you bought the overall market or jpmorgan shares you would be looking good now. As for how the sectors have performed. The s p 500, you have some real winners and losers. On the winning side, the financials. Better by 40 just since that dimon bottom date back on february 11, 2016. The worst performing sector in the s p 500, telecom services, up by 3 or 4 . The high and the low if you will there. As for the dow overall, again, financials leading the way higher there. Look at some of these winners and losers. Goldman sachs has been a better performer among the banks, up 71 since that market bottom. Jpmorgan up 64 . American express up 53 . So mega cap, large cap financial names doing well. Since the dimon bottom. Jamie dimon made around 17 million off that trade alone. When it comes to market timing, he seems to do well. As for other banks, not too shabby. Dominic chu, cnbc. Tim is still with us. Tim edwards director from the s p, dow jones indices. Why is greece back in the headlines . The first reason is the last time we kicked the can down the road and we reached the point where the can last hit. In particular its back in the headlines because the imf, which is part of the group of people that are giving greece money has said we cant keep giving money if its unsustainable. Theres an internal debate between the imf and the european political leaders as to how strict, how loose they should be with greece and whether or not there should be an aspect of debt relief. This is a slow process. It always has been. But were coming to a trunk point around the 20th of february, we will come to continual crunch points around those negotiations is greek sustainable what do they need to do, and most importantly if the imf withdraws, will the european sovereign nations be required to themselves fill the gap and give more money to greece. That might happen in an environment where there are National Elections in many european countries. Add that together, thats why greece returned to the headlines. These National Elections, a lot of people are saying even with this taking place in greece that france is still the big uncertainty, and that this is the one that could upset european markets substantially. Do you anticipate a lot of repositioning both in debt and equity markets based on france . I think the last year or so we really have moved to a market environment where macro trends, politics are fundamental. We were talking earlier about the oil price, and what was important there is opec which is political. And these Political Trends are very much focused on france at the moment because of that risk of a surprise. There are also dutch elections. I dont think people are too excited about that. Later in the year well have german elections. Again, the potential for a surprise result. Its not zero. So i think people will be focusing on it.