World Markets Live - January 27 - CNBC Live Events
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CNBC Live Events

World Markets Live - January 27

We’ll be updating you throughout the day with essential breaking news, data alerts, earnings reports and all the major market movements.

  • Welcome to the live blog on this frosty Friday in London, here are your headlines:

    • A border tax battle sends the peso lower after White House spokesman Sean Spicer touts a 20 percent levy on imports from Mexico, but later back-pedals - calling it just an idea. 
    • 'Opposites attract', says Theresa May of the special relationship she hopes to forge with Donald Trump as the British Prime Minister urges the U.K. and U.S. to push back against the 'eclipse of the West'.
    • UBS sees its  full year 2016 profit compared to the previous year halve but posts better than expected fourth quarter results.
    • Hardware hurts profits at Alphabet while software supports Microsoft, as its push into cloud computing keeps paying off. 
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  • U.K. Prime Minister Theresa May has praised President Donald Trump's victory as defying the  'pundits and polls'. She made the speech to Republican lawmakers at a retreat in Philadelphia, ahead of her joint press conference with President Trump, due to take place today at 1 p.m. local time, or 18:00 p.m. London time. 

    Meanwhile White House Press Secretary Sean Spicer has suggested a 20 percent tax on imports from Mexico could help fund a wall on the border. This after President Donald Trump signed an executive order to begin preparations on the project. Spicer spoke with reporters on board Air Force Once.

    Spicer said the following:

    If you tax that $50 billion at 20 percent of imports - which is by the way a practice that 160 other countries do - right now our country's policy is to tax exports and let imports flow freely in, which is ridiculous. By doing it that we can do $10 billion a year and easily pay for the wall just through that mechanism alone.

    Which caused the dollar to rise strongly against the Mexican peso. The dollar still 0.66 percent higher as we speak.


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  • UBS has suffered cross-border outflows of 7.4 billion Swiss francs, which resulted in negative net new money in wealth management of more than 4 billion Swiss francs. 

    However the bank beat net profit forecasts and reported a near 50 percent rise in pre-tax earnings in the fourth quarter. 

    The Swiss financial giant said it had observed improved investor confidence, particularly in the US, but cited continued headwinds from low interest rates in Switzerland and the euro zone. 

    Over the last 6 months, shares in the firm has raised 27 percent.


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  • NBC's Andrea Mitchell has more on the meeting between U.K. leader Theresa May and Republican lawmakers.

    Click on the play button for that package.

    by david.reid

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  • Nathaniel Rosenbaum, Credit Strategy at Wells Fargo is on set and suggests his bank has a much more bullish call on Europe.

    He says if under Trump the United States starts to look for for alternative trading partners in 2017, Europe is likely to be a big winner.

    But Steve puts a fly in the ointment of that theory.

    I hear you but Europe cant' make cars as cheaply as Mexico and Europe certainly can't compete with the Chinese on consumer electronics.

    It is the U.S. consumer who will suffer.

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  • Her work is real. I will prove this naturally with the prosecution. But it's plain to see that behind this, the real question is: how to fight the winner of the conservatives primaries.

    That's French conservative candidate and Presidential front-runner Francois Fillon who has defended his wife's work as "real", after French authorities opened an investigation into claims she was paid with parliamentary funds while holding a fake job. 

    Speaking from Paris CNBC reporter Claire Fournier said the French people may accept the work was legitimate but are having difficulties understanding why she was paid as much as 7,000 euros a month for her role.

    Fillon has said he will cut excessive waste within government.

    Fournier said local French media is providing evidence that voters increasingly believe that Fillon is not to be trusted.

    Getty Images: Francois & Penelope Fillon

    Comment ()
  • Shares in Google's parent company Alphabet traded lower in extended hours trade, after the company's quarterly earnings missed analysts' estimates. Revenue topped expectations, led by YouTube and mobile search, but higher costs weighed on margins. 

    Alphabet reported higher investment in hardware and content, while its effective tax rate for the quarter jumped from 5 percent to 22 percent. 


    But 
    Microsoft shares rose in after-hours after it reported quarterly earnings that topped expectations. 


    The tech giant's cloud business was the star performer, generating revenues just shy of 7 billion dollars during the second quarter.

    That figure came in both above analysts' estimates and the company's own guidance.
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  • UBS beat net profit forecasts and reported a near 50 percent rise in pre-tax earnings in the fourth quarter. 

    The Swiss financial giant said it had observed improved investor confidence, particularly in the US, but cited continued headwinds from low interest rates in Switzerland and the Euro Zone. 

    UBS CEO Segio Ermotti says he has concrete evidence that clients are more confident and the catalyst was, in his opinion,  the new U.S. administration.

    Possible there was also a human desire for people to want to think more positively after so many quarters of negative thinking

    Ermotti said there  has been good momentum in US business and very solid business in Switzerland.


    The UBS boss says it is true that on a relative basis, the weighting of investments in the United States has been small, but recent steps have been taken to increase this.
    Comment ()
  • White House Press Secretary Sean Spicer has suggested a 20 percent tax on imports from Mexico could help fund a wall on the border. 

    This after President Donald Trump signed an executive order to begin preparations on the project. Spicer spoke with reporters on board Air Force Once.

    by david.reid
    Comment ()
  • Heads have rolled.

    Following the Italian accounting scandal, BT has said that Corrado Sciolla is to leave the business. Andrea Bono has been appointed to run the business in Italy.

    This according to Reuters.

    BT's earnings report scorecard is due in two minutes time.
    Comment ()
  • Here are your headlines at this hour.

    • UBS suffers significant outflows in its wealth management business. But earnings beat expectations in the fourth quarter, as the bank's CEO Sergio Ermotti tells CNBC he's seeing improved client confidence
    • BT's head of Continental Europe reportedly steps down amid the Italian accounting scandal, as the British telecom provider prepares to release its latest set of earnings. 
    • 'Opposites attract', says Theresa May of the special relationship she hopes to forge with Donald Trump as the British Prime Minister urges the U.K. and U.S. to push back against the 'eclipse of the West'.
    • A border tax battle sends the peso lower after White House spokesman Sean Spicer touts a 20 percent levy on imports from Mexico, but later back-pedals - calling it just an idea. 
    Comment ()
  • British Telecom, known as BT,  has offered up a third quarter EBITDA of £1.62 billion. The adjusted revenue over the same period was £6.13 billion.

    That sales figure exactly matching analyst forecasts.
    Comment ()
  • Tesco is to buy wholesale food retailer Booker for £3.7 billion. Tesco claims it will realize cost synergies of at least £175 million.

    Each Booker shareholder is to receive .0861 Tesco shares plus 42.6 pence in cash.
    Comment ()
  • Among lawmakers, there was some opposition to the idea of a border tax with Mexico. 

    South Carolina Republican Senator Lindsey Graham tweeted "Any policy proposal which drives up costs of Corona, tequila, or margaritas is a big-time bad idea. Mucho Sad."

    Graham: Worried about key imports from Mexico 

    It should be noted that hours after floating the idea, Spicer pulled several reporters aside to clarify his comments. 

    He said his remarks on the 20 percent border tax were not intended to be a roll-out of a new policy. 
    Comment ()
  • Dominic Bunning, FX Strategist at HSBC is highlighting the challenge for FX traders of "Twitter politics".

    He says recent claims of a border tax is providing only confusion.

    There is no set policy in the United States so the market is trying to price in where the peso should be in this environment. And then they come back out and say actually that wasn't real policy.


    On the recent run in sterling, Bunning says it is time to fade the rally.
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  • The presidents of Russia and the United States are to speak by phone this weekend.


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  • European futures look like this. The French futures are open but are just dead flat.


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  • Ford Europe has posted a record full-year pre tax profit of 1-point-2 billion dollars, closing out seven consecutive profitable quarters. However, the group warned that 2017 earnings in Europe would be lower, mainly due to higher costs associated with product launches and the weaker sterling. 

    Nancy spoke to Ford's EMEA President Jim Farley and asked if the automaker was concerned about a potentially weaker consumer environment due to Brexit.

    by david.reid

    Comment ()
  • Pretty flat as we open. A slight bias to selling.



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  • You know the drill by now. Click or tap on an arrow for the worst sectors.

     
     

    1 of 2





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  • BT's third quarter earnings and revenue came in line with company estimates, but were overshadowed by a profit warning issued earlier this week after the company revealed an accounting scandal in its Italian division. Earnings per share for the quarter more than halved, while revenue rose 32 percent. 

    According to people familiar with the matter, BT head of Continental Europe Corrado Sciolla will leave the company in the wake of the firm's accounting scandal in Italy. 


    Comment ()
  • UBS has suffered cross-border outflows of 7 point 4 billion Swiss francs, which resulted in negative net new money in wealth management of more than 4 billion Swiss francs. However the bank beat net profit forecasts and reported a near 50 percent rise in pre-tax earnings in the fourth quarter. 

    Shares on the slide however.
     



    Comment ()
  • Tesco is to buy wholesale food retailer Booker for £3.7 billion. Tesco claims it will realize cost synergies of at least £175 million.

    Each Booker shareholder is to receive 0.0861 Tesco shares plus 42.6 pence in cash.

    What Tesco swill use Booker for is not crystal clear but investors appear to see it a as positive addition to the U.K. retailers supply chain management.


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  • Just over ten minutes in to European trade and the indices look like this.


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  • Banco de Sabadell's fourth quarter earnings slumped by 51 percent year-on-year due to higher provisions against court costs for mortgage borrowers. Net profit hit 63 point 5 million euros, missing analysts' expectations. The Spanish lender said it will give a strategic update on 7th February. 

    LVMH top and bottom lines both outpaced expectations in 2016, with a diverse geographic mix of gains thanks to strong sales in Europe and the U.S. combined with a pick-up in mainland China. However the group's CEO, Bernard Arnault tempered enthusiasm, warning that low stocks of Louis Vuitton products and Hennesy cognac could weaken growth next year. 


    Away from earnings the CEO of Intesa San Paolo says he sees growth potential in tie-ups between banks and insurers. This after a recent report that Intesa is considering a joint bid for Generali with the German insurer Allianz. 

    Speaking on the sidelines of an event in Turin, Carlo Messina added that Intesa "feels free" to look at possible options to grow, provided they didn't hurt the bank's capital strength. 

    Comment ()
  • U.K. Prime Minister Theresa May has praised President Donald Trump's victory as defying the  'pundits and polls'. She made the speech to Republican lawmakers at a retreat in Philadelphia, ahead of her joint press conference with President Trump, due to take place today at 1 p.m. local time, or 18:00 p.m. London time. 

    Meanwhile White House Press Secretary Sean Spicer has suggested a 20 percent tax on imports from Mexico could help fund a wall on the border. This after President Donald Trump signed an executive order to begin preparations on the project. Spicer spoke with reporters on board Air Force Once.

    Spicer said the following:

    If you tax that $50 billion at 20 percent of imports - which is by the way a practice that 160 other countries do - right now our country's policy is to tax exports and let imports flow freely in, which is ridiculous. By doing it that we can do $10 billion a year and easily pay for the wall just through that mechanism alone.

    Spicer did later row back on the statement suggesting it wasn't policy but rather just an idea.

    Which caused the dollar to rise strongly against the Mexican peso. The dollar has moved higher against the peso again in today's session.


    Comment ()
  • CNBC's Pop Up Start Up gives 12 entrepreneurs a head-start through the expertise and guidance from some of the best business and retail brains in the UK. Each week two fledgling companies pitch their ideas to their mentors before embarking on a trip to manufacturing giant China to source their products. Here's a sneak peek of tonight's episode.

    by david.reid

    Comment ()
  • Another thumbs up for the Tesco deal from Neil Shah, director of research at Edison Group.

    Smart first mover advantage in tying up the food supply chain in the brave new world of online shopping, with Amazon the main disrupter and a pricing race to the bottom within the core grocery stores market catalyzed by Lidl and Aldi

    Comment ()
  • Analyst Louise Cooper is giving her take on the Tesco & Booker tie-up.

    One of the reasons for the merger stated in the press conference call is that Booker should help Tesco develop its own brand.  I think part of that is to help compete with Aldi and Lidl which have great own brands at very low cost.

    She thinks it could prove a better strategy than Sainsbury.

    Tesco has chosen vertical integration with the "merger" with Booker. Sainsbury's choose horizontal diversification buying Argos. Both deals show the continuing difficulties of the food retail business. Both strategies are worthy, although if you are committed to food retail, I prefer the Booker deal.  

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  • Shares in Tesco and Booker are leading the pack in Europe after Britain's biggest supermarket announced a merger with the UK's largest cash and carry wholesale supplier.


    Tesco CEO Dave Lewis said the deal is "completely on strategy" -- emphasizing that the Tesco recovery is well under way.  

    Lewis also said discussions on the Booker acquisition began a year ago and that former non-executive director Richard Cousins was NOT supportive of the deal.  Cousins surprised investors when he stepped down earlier this month with no explanation provided.
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  • Despite Tesco helping to bolster the FTSE 100, that index is joining the rest of Europe in a touch of selling.


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  • James Andrews, Head of Investment Management at Redmayne-Bentley has been talking with Nancy on set regarding how much U.K. consumers are going to wear as inflation price rises in 2017.

    He says this is what Tesco realizes as an issue and is why the firm is desperately trying to find ways to lower costs.


     


    Comment ()
  • Futures are mixed for the United States equity. 

    Wall Street is possibly playing it cagey ahead of Trump's meeting with May and any comments they make on a potential trade deal and Brexit.

    Durable goods and GDP data are both due at 8:30 a.m. ET, with consumer sentiment set to come out at 10:00 a.m. ET.


    Comment ()
  • Oil prices have dipped in session, with rising output from the United States the main culprit


    In other oil news and according to the Financial Times, supertankers from Iran’s state-owned oil fleet are sailing to Europe for the first time since sanctions were eased last year.

    Two mammoth tankers are on their way to the storage facility at Rotterdam.
    Comment ()
  • The dollar is on an upward trajectory against most currencies today. The currency benefiting from optimism over the U.S. economic outlook and corporate earnings.



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  • One lingering question over the Tesco deal is whether the Competition and Markets Authority may have a say given Booker's ownership of convenience stores across the U.K. 

    Booker owns the stores which are franchised to operators.

    Gary Hobbs, Senior Equity Analyst at Investec Wealth & Investment listened in on the Tesco conference call and doesn't see much fear from Tesco.

    CEO Dave Lewis was confident on the call of limited CMA interference as Booker doesn’t own the stores (all franchised) and where Tesco will have no influence over pricing. 

    Hobbs isn't as convinced however. He says  having so much of the convenience market in the hands of a single player is bound to raise issues. 

    Charles Wilson seen as a major capture for Tesco and already touted as Lewis’s heir apparent.


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  • Tesco shares jumped more than 8 percent today on the news that Tesco is acquiring Booker.

    Over 7 days, shares are up just 1.54 percent, after several sessions of declines.

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  • Tesco's plan to buy Booker for £3.2 billion has industrial logic, says Professor Alan Braithwaite, Chairman of supply chain and logistics consultancy, LCP Consulting.

    He says the move takes Tesco into the food service area, which is a growing part of the market.

    It will give the business the platform to further challenge in that market. It will allow the Booker side of the enterprise to leverage procurement and inventory so there is a margin opportunity too. This is especially important in the light of food inflation that is now accelerating with the weaker pound.

    If the deal goes through, Tesco will be able to add new services and increase response times, offering it a compelling competitive advantage, according to Braithwaite.
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  • A poor week for gold. The precious metal is set for its first weekly drop of 2017, under pressure from the dollar and waning demand.

    Here's a chart of how gold has declined this week.

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  • The U.S. dollar has strengthened towards the end of the week, climbing after President Trump's comments on Mexico.

    The dollar index is up about 0.18 percent so far today, but looks set to finish the week flat.

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  • A mixed outlook for U.S. markets. Future values predict the S&P and Dow will open higher, while the Nasdaq may fall. 

    The U.S markets are at or near all time highs thanks to the Trump trade momentum, so some falls or profit-taking should be expected.

    Comment ()
  • German prosecutors have expanded their investigation into the Volkswagen emissions scandal. The number of employees being investigated has risen to 37 from 21.

    Shares in the car maker are currently flat on the news.

    So far this week, VW shares look set to finish up almost 3 percent.

    Comment ()
  • These are today's top headlines with TL;DR, presented by David.


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