World Markets Live 2 - December 6 - CNBC Live Events
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CNBC Live Events

World Markets Live 2 - December 6

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

  • Good morning everyone, these are your headlines;

    • Renzi's resignation on hold - The Italian President asks Matteo Renzi to delay his departure until the budget is passed but the door remains open to a fresh round of elections in the new year. 
    • Banca Monte dei Paschi di Siena is told to prepare itself for a state bailout as a private sector deal to raise 5 billion euros hangs in the balance. Key investor Qatar is reportedly reconsidering the plan. 
    • French Prime Minister Manuel Valls makes his Presidential bid, declaring he wants to lead the Socialist party to victory after Francois Hollande declines to seek a second mandate.  
    • The CEO of United Technologies tells CNBC exclusively he got a good deal with Donald Trump to keep some jobs at Carrier in the U.S., after the President-elect took aim at the company on the campaign trail. 
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  • Matteo Renzi has agreed to delay his resignation until the Senate approves his government's 2017 budget in coming days. The outgoing prime minister formally resigned yesterday, but Italian president Sergio Mattarella asked him to stay on temporarily.

    Mattarella also signaled that he will not be calling for snap elections. He said it was important for Italy's institutions to "respect commitments and deadlines" adding that it would take time to find the right solution. 

    Italy's political upheaval could threaten Banca Monte dei Paschi's 5 billion euro recapitalization plan. 

    According to the Financial Times, senior bankers advising the lender have told BMPS to get ready for a state bailout, amid concerns key investor Qatar may now reconsider injecting money into Italy's oldest lender. The Qatari Investment Authority is expected to contribute one billion euros. 

    Shares in Monte dei Paschi plunged over 4 percent yesterday on the referendum outcome. The value of BMPS has almost halved in 2016.


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  • They have churned through 8 billion euros of recapitalization in the last few years.

    Julia points out why Banca Monte dei Paschi may have run to the end of the road in terms of fresh investment.

    For the wider sector, Julia says any "bail-in" of investors to BMPS may trigger fears of what happens with other banks. 
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  • James Athey, Fixed Income Investment Manager at Aberdeen Asset Management is on set describing the Italian banking situation as a "slow motion train wreck".

    He says it is unsurprising that Qatar as investors would reconsider 1.5 billion euros in to BMPS while there is so much uncertainty in who holds the balance of power within the Italian senate.

    Athey says what the European Central Bank will do is also heavily relevant.

     Athey: Rise of populism in Italy may delay BMPS investment 

    Athey says in Italy there are a number of retail investors who have interest in the Italian banking system so a "bail-in" is politically unpalatable.
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  • The Reserve Bank of Australia has held its cash rate at 1.5 percent -- in its last monetary policy review for the year. The Australian central bank also said that a rising Aussie dollar might pose risks to the country's economic transition, as it moves away from a resource-led economy.

    Japan's Nikkei also now closed, ending the day nearly half a percent higher.


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  • This 40 second tweet, also know as TL;DR, offers you a bite size rundown of the three top business stories from the Asian region.


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  • Russia may have trouble sticking to its pledges to cut oil production according to Marina Petroleka, Global Head of Industry at BMI Research.

    They produce in West Siberia, That's deep winter there. You can't just turn off a field without structurally hurting the production that is coming out of it.

    Oil prices eased early in Asia as crude output rises in virtually every major export region despite plans by OPEC and Russia to cut production.


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  • The end of the checkout line?

    Amazon has launched a grocery store without queues.
    Amazon Go - the company's pilot convenience store in Seattle - uses an app and computer vision instead of traditional checkouts. Customers scan into the store with an app, shop as normal, and the items are billed to their Amazon-dot-com account. The store is set to open to the public early next year.

    No lines, checkout staff or security guards?

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  • Warren Buffett's Berkshire Hathaway could receive a $29 billion dollar boost from the President-elect's proposed corporate tax cuts, according to a report from Barclays Capital. 

    Trump has proposed slashing the corporate tax rate from 35 percent to 15 percent, which would lower Berkshire Hathaway's net deferred tax liability to $21.6 billion dollars from $50.5 billion. 

    The Sage of Omaha endorsed Hillary Clinton in the Presidential election.  

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  • Louisa is at the Milken Institute Summit in London with Tony Fratto, Founding Partner at Hamilton Place Strategies.
     
    Fratto says the U.S. has been a two-party system for as long as he can remember and that is because the existing parties have been very good at being an umbrella organization.

    However he says that is under strain and changes could be afoot.

    It is very hard in the U.S. to break out of a 2-party system but I do expect the parties to make better attempts to embrace the broad range of voters. 


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  • At this hour, these are your headlines;

    • Renzi's resignation on hold - The Italian President asks Matteo Renzi to delay his departure until the budget is passed but the door remains open to a fresh round of elections in the new year. 
    • Banca Monte dei Paschi di Siena is told to prepare itself for a state bailout as a private sector deal to raise 5 billion euros hangs in the balance. Key investor Qatar is reportedly reconsidering the plan. 
    • French Prime Minister Manuel Valls makes his Presidential bid, declaring he wants to lead the Socialist party to victory after Francois Hollande declines to seek a second mandate.  
    • The CEO of United Technologies tells CNBC exclusively he got a good deal with Donald Trump to keep some jobs at Carrier in the U.S., after the President-elect took aim at the company on the campaign trail. 
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  •  Pier Carlo Padoan remain's the bookies favorite to take over as the Prime Minister of Italy.

    The next Italian Prime Minister? 

    Padoan is an Italian economist who has been the Minister of Economy and Finances of Italy since 2014. Padoan had been also director of the International Monetary Fund for Italy from 2001 to 2005.

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  • Jean Medecin, Member of Investment Committee at Carmignac says  it is clear that junior bond holders in Banca Monte dei Paschi have been more protected than bank investors in other European countries.


    Medecin says the first issue for Banca Monte dei Paschi must be to sort its process and "recognize its latent loan losses".

    In essence he is saying the bank should, as Steve articulates; "take the hit, find a clearing price for the assets and move on". 

    More on this story can be found here.


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  • Reuters is reporting that South Korean president, Park Geun-hye, has accepted a proposal for her to step down in April.

    Park says if impeachment is passed in the meantime, she will wait for the constutition's ruling.

    Park is under pressure to step down after accusations that a former close friend abused her closeness to the president to enrich herself and influence policy, as well as her handling of classified documents.

    President of South Korea: Park Geun-hye 

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  • Not a great deal of direction for European markets this morning.


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  • 'If it ain't broke...' says Fed to Trump.

    St Louis Fed President James Bullard has warned President-elect Donald Trump should not design fiscal policy as if the United States economy is in crisis. 

    Speaking in Arizona, Bullard said policies intended to boost infrastructure and overhaul the tax code "may have some impact" but "should not be viewed as counter-cyclical measures."

    Meantime Chicago Fed President Charles Evans echoed Bullard's view, arguing that  "you don't need explicit stimulus" given the unemployment rate is so low. 

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  • It's the busiest time of year for Amazon and its delivery partners like Deutsche Post DHL. Europe's biggest postal group says business is booming.

    Frank Appel, CEO at  Deutsche Post DHL Group joins the Squawk box show from Bonn in Germany.

    Steve asks is he is worried about the level of pay he has to dole out to employees who are on 18 euros per hour - seen as high for the industry.

    He responds that a recent deal with unions has secured a pay structure he is comfortable with.

    Deutsche Post DHL Group CEO: Comfortable with company pay levels

    Appel also believes while drones may remain a more specialized use, he sees the wider deployment of digitization as a crucial bonus to logistics.

    Geoff asks on inflation forecasts and Appel says while difficult to conjure an exact figure he doesn't see a mammoth amount coming down the line.
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  • French Prime Minister Manuel Valls has thrown his hat into the ring for the 2017 Presidential race, stepping down from his current role to focus on the run-up to next year's election. 

    The left-wing politician will take part in next month's Socialist primaries, after President Francois Hollande said he won't be standing next year. Valls is seen as more popular than his predecessor, taking a tougher stance on security and immigration. 

    Jean Medecin, Member of Investment Committee at Carmignac says he thinks it will be hard for Manuel Valls to  corral support from all corners of the French left wing.

    Medecin believes on the right hand side of the equation, Marine Le Pen, may benefit from traditional left wing supporters who back her statist style politics.

    Medecin: Tough for Valls to become French President

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  • Banks trying to shrug of any fears in early trade.




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  • Italy's political upheaval could threaten Banca Monte dei Paschi's 5 billion euro recapitalization plan. According to the Financial Times, senior bankers advising the lender have told BMPS to get ready for a state bailout.

    The stock down about 1.5 percent at the open.


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  • A slight bias to the downside across the major indices in Europe.


    In the periphery, a slightly more positive atmosphere.


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  • Sanofi is reportedly eyeing a bid for Actelion. According to a Bloomberg report, the French drugmaker has made its interest known to Actelion -- creating competition for Johnson & Johnson who made an offer for the Swiss biotech company last month. But Sanofi has reportedly not yet decided whether to make a bid.

    ABN Amro has agreed to sell its private banking group in the Middle East and Asia to LGT, a business run by the Princely family of Liechtenstein. The group has approximately 20 billion dollars under management, and will nearly double the size of LGT's private banking operations. Terms of the deal were not disclosed. 


    Heating and Plumbing supplier Wolseley posted higher profit in the first quarter as strong growth in its U.S. business offset weakness in the U.K. and Europe. The United States accounts for about 80 percent of the company's profits which came in at 303 million pounds for the three months. It forecast future profit in line with expectations.

    And shares in IG Group have opened steeply lower after the U.K.'s financial watchdog, the FCA, proposed stricter rules for CFD products. 

    A CFD, or Contract for Difference, is an agreement between two parties to exchange the difference between the opening price and closing price of a contract.  

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  • The Russian Micex hit an all-time high in Monday's trading session as the recent rise in oil prices and the ruble boosted shares.


    The benchmark index closed just off record levels with the Dollar-denominated secondary market the RTS, hitting its highest point since May.

    Evgeny Fetisov, Chief Financial Officer of the Moscow Exchange is on set and says the recent rises are a pleasing result of increased volume.

    Fetisov says interest rates going down for Russia and the declining inflation rate allied to a stable ruble should set a positive tone for the Russian economy.

    The CFO also argues that a rising oil price will help the mix and that stocks will start to rise in a few months.

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  • The U.K's Financial Conduct Authority has cracked down on CFD trading, proposing stricter rules. That has sent spread-better shares in Europe deep into the red. 


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  • Bank of England governor Mark Carney has rejected the idea that monetary policy has increased fear of globalization. In a speech in Liverpool he defended the role of the central bank in softening the blow of the financial crisis and said lower interest rates benefited lower earners. 

    Sir John Gieve, Chairman of Nesta and former Deputy Governor of the Bank of England is on set and says he believes Carney and the Bank of England's actions have, on balance, been positive.

    Sir John Gieve: Ructions ahead from Brexit 

    Sir John says he would maintain the policy of QE as there will clearly be Brexit related headwinds coming down the pipeline.

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  • Sir John Gieve, Chairman of Nesta and former Deputy Governor of the Bank of England says Mark Carney's record as Bank of England Governor is looking fairly healthy.

    On the whole since he's arrived inflation has been pretty low and growth has been pretty solid.

    Sir John Gieve: Mark Carney is doing a good job 

    On whether the Bank of England should allow the U.K. economy to slow to allow for future growth, Sir John says that sort of theory is easy to postulate "from the commentary box" but when you are running a country, it is a a different story.
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  • An increase in the number of retail investors trading CFDs has prompted the U.K. regulator to place stricter rules on the service. 

    The FCA says it is concerned with the number of suppliers of CFD trading and the amount of leverage and losses built up by customers. 

    On analysis of a sample of client accounts - the FCA said it found that 82 percent of clients lost money on CFD products.

    Those stocks shedding massive amounts of value this morning.


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  • Just moments ago the former Deputy Governor of the Bank of England, Sir John Gieve spoke about the impact of the new FCA regulations.

    These regulations apparently designed to protect retail investors.

    Hit play to hear his view on this breaking news:

    by david.reid

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  • Institutional Stockbroker and Corporate Advisor Numis has downgraded CMC Markets to sell from hold.

    Numis said its position on IG Markets, another spread-betting firm shedding value this morning, is under reviews.

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  • Reuters is reporting that Banca Monte Dei Paschi (BMPS) top management is to talk with the European Central Bank officials today.

    Reuters also stating that  a BMPS board meeting has now been postpones to Wednesday or Thursday.

    In Rome, Julia says the ECB has been putting pressure on BMPS to come up with a capitalization plan by the end of 2016 and the question now is while that deadline be extended.

    BMPS shares under pressure again 

    Shares in Banca Monte dei Paschi have shed more than 85 percent in value this year.
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  • In the last 30 minutes, Germany's constitutional court has ruled that phase-out rules imposed on nuclear power operators in the country are partly UNconstitutional.

    The court said that utility firms' complaints "against accelerated exit from nuclear energy were partly successful".

    The decision paves the way for these companies to sue the German government. Shares rising for affected firms.


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  • An increase in the number of retail investors trading CFDs has prompted the U.K. regulator to place stricter rules on the service. 

    The FCA says it is concerned with the number of suppliers of CFD trading and the amount of leverage and losses built up by retail customers. 

    A contract for difference (CFD) is a financial instrument that allows traders to invest into an asset class without actually owning the asset. 

    Further it is an agreement between two parties to exchange the difference between the opening price and closing price of a contract.  

    CFD providers are down near 30 percent in session.


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  • Howard Shore, Chairman of Shore Capital joins us from the Milken Institute Summit in London.

    He is someone who voted for the U.K.'s departure from Europe and despite owning a boutique investment group says there is an opportunity for the United Kingdom to do well in capital markets.

    Do we de-regulate and become the Singapore or Hong Kong of Europe?

    Shore says he has the strong view that Britain will have the continued access to the single market and that proceedings will "be like a divorce" with negotiation needing to take place.

    Howard Shore, Chairman of Shore Capital 

    Shore says his analysts expect a strong flow of business over Christmas.
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  • The current bull market is 3 months from turning 8 years old, and one month from becoming the longest on record. But it's behaving as if it's much younger, as Michael Santoli reports here.

    by david.reid
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  • Portuguese 10-year paper at a one week low. At one stag, yield on the paper was down 14 basis points on the day.



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  • After watching their share price crater by 30 percent, IG Group Holdings has issued a statement.

    The spreadbetter says their initial view is that FCA proposals could enhance client outcomes, will furyther consider implications of consultation paper and will respond by 7 March 2017.

    Notably IG makes the point that the FCA proposals do not appear to apply to firms operating outside f the United Kingdom.


    As a reminder to the background of this story an increase in the number of retail investors trading CFD's has prompted the U.K. regulator (FCA) to place stricter rules on the service. 

    A contract for difference (CFD) is an agreement between two parties to exchange the difference between the opening price and closing price of a contract.  

    The FCA says it is concerned with the number of suppliers of CFD trading and the amount of leverage and losses built up by retail customers. 





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  • Oh for the benefit of hindsight. 

    Tracking the Dow would have given you a ten percent yield so far this year. Not bad in this low rate environment. 

    The Dow is the best performing of the major indices.


    Later today U.S. markets are tipped to open marginally higher.


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  • Michel Barnier, chief negotiator for the preparation and conduct of the Negotiations with the United Kingdom on Brexit is currently speaking in Brussels.

    He starts by noting that Brexit is uncharted and legally complex. He says he expects economic challenges to arise on both sides of the English Channel (or La Manche for our French based readers).


    He says he has visited 18 member states so far to discuss Brexit with the rest of the EU countries to come by the end of January.

    Barnier says he is assembling a team of 30 people to help conduct negotiations.

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  • Barnier expects that an agreement on Brexit could be agreed by October 2018. This takes March 2017 as a starting point for negotiations, as suggested by U.K.government Theresa May.

    He says the European Union will define the framework of Brexit negotiations and interests of members in coming months.

    Talking only 4 questions Barnier says the EU will seek ways to preserve the success of the Irish peace process.
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  • Barnier is answering only in French, so I'm taking a Reuters translation. He says all process of ratification must be done by March 2019 so an agreement on the deal must be in place by October 2018.

    Barnier says any deal on future UK-EU relations would be legally different from withdrawal and therefore cannot happen concurrently.

    he says a transitional agreement can only come after the U.K. explains what it expects or wants from a final arrangement.

    He says he doesn't know what a "hard or soft Brexit" means.

    Sterling has dipped almost imperceptibly since he has started talking.


    Here's a  teaser. Barnier says Norway's model of budget contributions might be one that Britain could ape.


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  • European banks are rallying today after the investment bank Morgan Stanley issued new rating and price targets for the sector.

    For instance, shares in Deutsche Bank are up more than 4 percent today after Morgan Stanley raised its price target.

    The German lender's U.S. listed shares are also up around 2.8 percent in premarket trade thanks to the re-rating. 

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  • As a result of new ratings and target prices from Morgan Stanley, the European banking sector is up around 2 percent today.

    However, it's been a tough year for Europe's lenders. The sector as a whole is down around 13 percent this year.

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  • Vice President Joe Biden has revealed to reporters he may make a big presidential bid for 2020. Here's a quick video with the latest news.


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  • The euro rose significantly on Monday after hitting lows of $1.05, as investors seemed to brush aside the result of the Italian referendum, says FXTM Research Analyst Lukman Otunuga.

    The mounting fears of political instability in Europe, uncertainty over the Italian economy and fears of Italy leaving the Eurozone were pushed to the side with risk-on propelling the Euro higher. 

    While the short term gains in the Euro are very impressive, it may be too early to gauge the impacts of Sunday’s referendum results with more time needed in the New Year to digest the reality. There still exists a layer of uncertainty over the next steps Italy may take and such could encourage the European Central Bank to extend its QE programme at December’s policy meeting. 

    Although sentiment should logically be bearish towards the Euro amid the uncertainty and anxiety, bulls have prevailed.

    This is how the euro has performed over the past 7 days. Currently the euro is down around 0.2 percent against the dollar .

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