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 is worth a lot more and we are going to come out of 207. 05 t fail, up by a decent recovery, coming off the lows, but a bit of context in terms of where he came from is always important in all of this, so a better year for those down. Jonathan bell still with us. When you think about where the miners have come from, it has been an impressive performance. When you take a longerterm chart, they did have a terrible time before that. Is there is money to be made in the Mining Sector . Are you going to go back up to the size . Jonathan what this really reflects is what has happened in china. The low point in january of last year when everyone was cautious isthe chinese economy, china the biggest consumer of metals. If they were slowing down, the was going to slow down and hit the miners. Than what you had was this boost in demand in china that was stimulated by the government and that has fed through to increase demand for metals. Zincook at copper, nickel, across the board, these are all rising. It comes down to what is your view on china . Also is a short him boost shortterm boost for potential growth in the u. S. , but i think you have to think, where is china going . At the moment, it looks as though china will continue growing around the 6. 5 level so that gives miners a bit of time. Guy i want to get the start to work properly and make sure it is looking correct. The pmi data today back him out of china for the manufacturing sector, as you say, driven by credits expansion, we saw Governor Carney yesterday, his concern about the credit story in china, concern about what is happening in terms of the leverage ratios that exist there. My question is, how much further have we got in terms of that credit expansion story to continue working . The idea was that china is not going is going to migrate away from old style industry to new style industry and there is a lot of evidence of that helping, but of that happening. I will point do they stop doing that and come back to this idea, orit a kind of abrupt halt something that takes a while to work his way through . Jonathan i agree with you entirely that china has a problem. It is investing too much and needs to adjust the economy. It is borrowing too much. If you look at what is happening to the growth in gdp, this is more than matched by the growth in that. That is unsustainable. In petdebt. That is on the in debt. That is unsustainable. They are borrowing from themselves very similar to japan, where you saw debt growing over years and years and you ask, how can have such a high debt gdp when you are borrowing from your own consumers . That is where china is. Im convinced if you did a proper marked market on chinese bank loans, you would find a lot of them are insolvent. That is where they would be if you had a proper analysis. But you dont need to have a proper analysis if you dont want to. So you can let them carry on. At the point and need capital, the state can put more capital into chinese banks, so even where i think you have banks that have a problem, that does need to lead to a problem lead to a collapse at this point. At some point, it has to stop. You cannot just carry on growing your economy by borrowing more and more, but it may be two or three years away. Guy stay with us. At many more to discuss on the subject. Jonathan bell with us on the open. A note on glencore. The Parent Company of Bloomberg News, peter brower, senior independent, nonexecutive director at glencore. Important to make that clear. Up next, a thing on the pulse of the italian economy. The latest on the referendum. A little later, nothing is certain. Even taxes, it seems. What will donald trump policies hold in terms of Corporate America . We will have the remarks on his treasury secretary pick. Later, putins power display here at his annual state of the nation address. We will cross to moscow for a preview of what he is going to say. All of that coming up, this is bloomberg. Guy welcome back. You are watching the european open. Mrr. Get up the sssp let us check in and see the dividend story. Only mail doing very well better than expected numbers. Let us take a look at this. Big companies, all exposed to the oil and gas industry. Royal dutch shale doing very well. Anglos in the mix. It is the commodities trade driving the story this morning. Carnaval, the three main losers on the stoxx 600 this morning. That is get details on what you need to know. Here is the bloomberg first word news with sebastian. A credit fueled recovery of heavy industry. The manufacturing pmi rose to 51. 7 in november, beating estimates. At the same time, in put prices jumped to the strongest reading since march 2011, signaling inflationary pressures may be building in the worlds secondlargest economy. Sebastian the dollar has just seen its best month against the yen in more than two decades. That is along with increasing bets that the Federal Reserve will raise Interest Rates this month. I can find the prospect that president elect Donald Trumps policy will fuel inflation. Philip hammond will stress the need for the country to remain part of the u. K. He will meet first minister nicolas sturgeon and host talks with Business Leaders in edinburgh. This comes a week after the government committed 800 Million Pounds to boost scottish and the structure. Infrastructure. This is bloomberg. The underlying concern of a no vote is maintaining stability. The populist fivestar movement would seek to exploit matteo renzi to force an early election and take italy out of the euro. Our italy euro chief joins us now. As we work our way towards this weekend, looking interesting to say the least, what are the major developments we are getting out of the last few days . Thats 24 hours, late yesterday, former italian Prime Minister and head of the European Commission finally came out publicly and stated he was going to vote yes on the referendum. He said it was a soft yes. He still had problems with, you know, some of the measures in the reform of the constitution way the italian way the italiae will be elected unreformed, but for all of these semi popular ure dan in the last few days. Guy what are those data points going to tell us about this vote this weekend . Will it change peoples thinking, do you think . Dan i dont know. I dont think it is going to be a game changer. Data thate economic will be coming out this morning could be interesting. We have a forecast for gdp confirming growth rate of about 0. 3 of the third quarter. , unemployment may come down ift slightly, and those numbers are good, renzi can use those as weapons as he heads into the weekend for the final hours of the campaign to show his government and his policies are starting to have an effect in a very tepid recovery that has been going on in a to leave for the last few years. Guy there is all kinds of scenarios floating around about what could ultimately have an here. When i dont hear much about, and i asked this question because markets have become increasingly bad of pricing in the right outcome. The market appears to have priced in a no. Can you walk me through what a yes would look like . Dan a yes obviously would be a very big victory politically for renzi. I think, beyond the political aspects, that is, i guess victory, he probably remains in power all that he would have to have some consultation with the italian president. I think you have to look at the italian banking industry. That is kind of what is in the back, lurking that here. A no vote obviously would probably create lots of turbulence. You have to bring big banks, wanted the pesky monta dei paschi. Unicredit will be announcing their plans around december 13. A no vote clearly is going to cause more turbulence and really, these banks are going to be heading into volatile markets, trying to convince investors to buy stock in these banks and, it is just not a great scenario for those Financial Institutions if that happens. Thank you for taking the time. Dan liefgreen, our bloomberg italy bureau chief. Still with me, Jonathan Bell. I joke because essentially, hadit and trump, if you taken the opposite side of the trade, on both of those, you would have done very well. Some people dead. Italy, in some ways, is one you can play a number of different ways. You cannot play through the euro , which both the dollar and sterling you can play the brexit and trump vote via. Via. You can play it by the italian banks. Let us talk about the banks and a little bit more detail. do i want to go anywhere near them . B how much turbulence could there be if we had a greek style banking crisis in italy . Jonathan the simple answer is i would not i would not go anywhere near them or invest in italian banks and assuming we have a no vote, they will be hit because they have a problem. They need to recapitalize. Italy has a problem as a country. The banks and particular have a problem with nonperforming in particular have a problem with nonperforming loans. It just makes the country almost ungovernable in the way that the constitution works and the way the powers are split between the different areas, so simple answer is they still get nonperforming loan problems and have an economy that is not growing. I think you should be looking elsewhere. Guy let me just throw something into that idea. Mario draghi said hell do whatever it takes. Italy is a country that relies on its Banking System for the transition mechanism. Those banks have to function if italy is going to have any hope whatsoever of closing the gap with germany. Mario draghi and the ecb have a meeting on the eighth. We wake up monday morning, thursday, ecb meeting. Can i assume the ecb will do whatever it takes at the meeting to make sure italy does not become a problem . Jonathan they will do what they can. They will do what they can to try to support it. You dont want a systemic banking crisis and a country that may start with a small bank and move on to others. Alive to that. Do you want to invest in bank that have an issue of nonperforming loans, need recapitalizing prior to the recapitalization . I think youre better off waiting and saying let us wait until the problems are sourced out. If you are interested in banks, look at the u. S. , where they have sorted out their banks, and you can invest their, make money, it is a growing economy. What im trying to understand is the symmetry of the risk that we have year. If you exclude the ecb for one moment, the downside is massive, draghi put ina the italian Banking Sector . Jonathan you could have that on the basis that they wont go under. They still need recapitalizing and have a nonperforming loan problem. Yes, it is a balance, but i dont think it is something you want to participate in. Guy great stuff, jonathan. Thank you very much indeed. Up next, trumpian reform. How will the world react . That story, next. This is bloomberg. Guy welcome back. 22 minutes into the equity market cash session. Let us talk about some of the big stories out there at the moment. Amongst the many reforms from president elect donald trump, taxes has been pretty high on the list. He has called for a protax, progrowth tax doctrine. His treasury has picked Steven Mnuchin who has made bold remarks. The tax plan has both the corporate aspects to it, lowering corporate taxes so we make u. S. Companies and most competitive in the world, making sure we read history trillions of dollars back to the United States, and the personal income taxes where we have the most significant middle income taxcut since reagan. Reagan. Ce think about what happened during the reagan era. Jonathan bell still with us. Good reform of the u. S. Tax code be for an investor into the u. S. Equity market . Jonathan well, it is significant. The issue in terms of repatriating money to the u. S. , which is going to be a real boon guy that is the homeland investment act style move that went into buybacks, largely. Jonathan yes, i expect we will see the same. People with large deposits are the people who have done by beth before. They will bring back the money and you will see an increase in buybacks and investment. Buybacks will be the main area. That is a big boost to the u. S. Market. That is a positive. It also of course gives a boost to government revenues because they will receive some tax on the money repatriated and that will offset some of the losses by cutting taxes elsewhere. Then, you have been got this big fiscal boost to both cutting taxes and the infrastructure spend and why the market is being so sort of bullish recently in terms of trump victory, has been that you get the fiscal boost. That is going to grow the economy. He can look at better gdp numbers. The flip side of that is higher in just rates. Guy so which is more important, the tax changes or infrastructure story . Jonathan tax changes certainly. Initially, those of the big story. They are quicker. You can get those through. The infrastructure, they need to spend in infrastructure under hillary or trump anyway. That is going to happen but take longer to come through. We dont know what congress will agree to. Republicans will agree to the tax cuts. The infrastructure spending, they will be a bit wary about. You may have to have some sort of coalition with democrats to pass it. Guy you put the tax first, just from a market point of view jonathan the market is concerned. He can be pretty confident of the tax cuts. The boost that gives, and then think, there will be some infrastructure but is it 500 billion over five years or whatever . We will have to wait and see. Guy that is look at the riskfree rate. We back off that. Looking of return i am at in terms of some of these investments will have to go higher, as you say. How much hired you thinking market is going how much higher the think the market is going to mark that up . Jonathan you have to look at inflation. It is not just the return you need to make but the return plus inflation. The problem you have with the Trump Presidency is you have this great fiscal base but at the same time, him saying im going to start putting tariffs on, start sending workers back, and then you start thinking, what are the issues that creates . That creates inflation. Stuff. L interesting jonathan, great to see you. Thank you for sharing your time with us. Jonathan bell, cio. Up next, not christmas, but actually coal. Guy welcome back to Bloomberg Markets european open. We are 30 minutes into the trading day. A fairly flat story for european equities. Yesterday, a much more solid session, but today, marking time. Reading awfully close to the italian referendum. Uprolls coming tomorrow. Glencore, one in particular we need to be paying attention to. Dividendsinstate its year. It plans to pay out a minimum of 1 billion annually thanks to a rally in coal and zinc. The parent of Bloomberg News is a director at glencore. Joining us now to discuss the results is jesse riseborough. It has been quite a year. Clear, banging on the table, his company was not going under. A year on, the story looks so different. What has changed . A remarkable turnaround. I dont think anyone would have predicted what has happened in the last 12 months. It is supported by commodity prices, cold, zinc coal, zinc. Secondly, management and asked did a pretty drastic that it up Debt Reduction plan. They cut the two Dividend Payments for this year. They shut some mines, drastically cut spending, and that really changed the fortunes for this Company Going forward, but you know, last year, we were sitting here talking about the comparisons to lehman brothers. When you put it in that context, it is quite a dramatic piece of orbit movement there. Of trading piece Corporate Movement there. Guy trading. How much is this down to what is happening on the Trading Platform and what happens in the coal phase, as it were . Jesse trading has been one area for glencore that has been quite steadfast in his downturn. Last year was around the same level. The industrial division, the mining division, was the real point last year where they were struggling. Prices were very low. They were struggling to turn a profit. Going forward, profits would be heavily linked to the new dividend policy the announced today. Guy so what next . Jesse they like to do a deal. As he looks around the landscape in front of him, hes stabilized it. They are not taking water on anymore. Guy where does he take this business . Jesse that is a really good question. He had a reputation for being a real swashbuckling, aggressive dealmaker. That typified the companys early existence as a public company. One of the key lessons they learned from this is Balance Sheet and they are not going to burden the Balance Sheet with the same amount of debts they put on in the past so i think they are bit more conservative than they have been previously perhaps on the a making, but they are in a much better position to be opportunistic in a comes to the old. That is what they talk about, being opportunistic here it at the same time, the commodity price rally has meant that valuations are going to be higher and the amount of stress in the market, there is not as many of those around. It might be tougher to do a deal but they are definitely looking. We look at everything guy let us leave that to one side us leave that to one side and talk about one particular area and that is what is happening in coal. The link between glencore and coal is pretty clear. Glencore is the top trader in coal. He got a boost in its stock to date. It will continue to do so as donald trump was elected president. A spectacular year. There is a number of charts we can show you. This is one of them. This is coal getting smashed higher, and the chinese contract for coal has come up a little bit, but nevertheless, has been doing really quite good business. Some of that is a speculative money, and quite a lot of it is speculative money, but you saw the pmi data today. Chinas industrial, old economy, continuing to do well. Benjamin sporton, ceo of the coal association. Well thiss on set as morning. So many subjects we need to sort of focus on. Let us stick with donald trump first. Pro coal. What are the details of donald trump being procoal and what does it mean for your members . Jesse there are benjamin there are a range of things that are interesting about the top election. He has spoken positively about the role of coal in the u. S. Economy and has talked about wanting to support core mining jobs and the Coal Companies and reducing regulation across the business in general and also being very strong about the role of infrastructure, so i think aose things all bode well for future for coal in the United States given a think we have had quite a tough number of years through regulation right by the Obama Administration and of course there has been a challenge of competition. Guy the gas issue is important. Is it just delaying the inevitable . Gas is cleaner than coal and easier to manage. This is just delaying the demise rather than providing a bedrock on which the industry can grow itself . Benjamin the gas price has proved to be volatile in the u. S. I think that as a focus on exports, that will lead to increases in the price of last in the years to come and that will continue to make holding competitive. Even under make coal competitive. Even under obama, they were forecasting it would create a quarter of the generation. Coal will continue to play a big role in the u. S. It will continue to be a strong industry. There is always going to be that competition from gas and the renewables. They are able to operate in competition and fairness with other sources of energy. Coal story ise interesting but the coal market is decided in china. This chart here. How much of what we have seen in howrise of coal prices, much of what we have seen is speculative money being rebar, steel, iron ore, how much of this is speculative and how much is real . Again, i come back to the pmi data. Chinese heavy industry is still on something of a credit driven tear . Jesse a huge amount has been speculative. One of the key factors that movepinned the coal price has been the decision with antennae by the government to change a policy of the number of working days at these mine sites from Something Like three to 30 days, 380 days, and that has reduced chinese production. There was a tight squeeze for both of those forms of coal and that has pushed prices guy skyrocketing. Glencore, wellplaced benefit. The worlds biggest exporter, took production last year when prices were low, so potentially, they could bring some of it back on, but silver far have been reluctant to commit to that. Guy what is the coal industry in tennessee going so far from here in china sea going in china see going from here . Benjamin the International Energy agency last week in their World Energy Outlook said in 2040, looking quite a ways down the track, coal will be writing half of the Power Generation in china, and they have been incredibly focused. We always hear the story about china being focused on low emission technologies and green energy, but part of that focus is in these renewables and a big part of it is the focus on low emissions Coal Technology as well. Miners in china are focused on how do they reduce emissions in Power Generation, looking at modern high efficiencies, and beginning to do work on things like carbon guy you can retrofit with that technology . Benjamin highefficiency, low emissions plans, various omissions that come from coal, are they retrofitted today . There is a program of shutting down less efficient plant and building larger, cleaner replacement in their place. Capture andcarbon storage can be retrofitted as well. There was an interesting piece of work earlier this year that set at least one third of the u. S. Im sorry, the chinese cold fleet could actually be retrofitted with Carbon Capture and storage. Guy it seems like the end of coal. We are not seeing that in our future. The end of coal for the rest of the world is something that is some way away . Benjamin yes. It is being shown the reductions and demand that have come from europe and the u. S. In particular are more than going to be upset by what is happening in china, what has happened in china in particular, but there are other important regions in coal market as well. Southeast asia, the International Energy agency says the mantra coal there are going to grow by 4. 6 a year every year through 2040. In india, it is expected to double in the next decade as well. Even china is not be big story it has been over the past few years in terms of looking at the future of coal. India and Southeast Asia are going to play a really Important Role there. Guy thank you very much. Andks to jesse riseborough, benjamin sporton. Up next, opec lives. The Cartel Strikes a deal that sent oil soaring. It is the real winner. U. S. Shale. Something for nothing, you could argue. Vienna. Ive in this is bloomberg. Guy welcome back. 43 minutes past the hour. Bloomberg business flash. Here is sebastian salek. Sebastian they plan to pay half 1 billion annually. The worlds biggest commodity trader has seen its share price triple this year. Eight coal and link rally. Zinc rally. D citigroup is said to be moving some of its londonbased equity and Interest Rate or of it is traders to frankfurt after brexit is triggered. Traders tove frankfurt after brexit is triggered. A citigroup spokeswoman said we are evaluating our options. A spokesman for the ecb declined to comment. China is slapping 810 tax on tax on cars a 10 tax on cars. It is beijings latest bid to promote more fuel efficient vehicles. Guy thank you very much indeed. Let us get you some details coming out of italy right now. Let me just get on my functions and talk about what is happening in terms of the data. The pmi numbers hitting 52. 2, ahead of expectations. Good news for matteo renzi going into this weekend. We are waiting for the unlimited numbers to come out shortly. Opec has sent crude oil prices soaring. Goldman sachs says oil may break above 60 per barrel. The Bloomberg Team in vienna is here to answer that question. Let us go to annmarie to get a take. Im here with our chief energy correspondent. Really, our Bloomberg Oil guru. This is your 50th opec. Who are the winners in this deal . Anyone not benefiting from higher oil prices. Iran, a big winner. Everyone that is outside opec and produces oil things about. Hina and brazil they are big winners in this decision and shale producers in the United States are some of the biggest winners here. Annmarie speaking of shale, is in some of the close to donald trump a huge winner in this deal . Javier absolutely. Harold hamm is one of the biggest winners of this decision. The companys share price went up 20 yesterday. Shale producers are going to benefit from higher oil prices. They are rushing to look in revenues for 2017 and i think that opec, two years ago, tried to kill the shell revolution have sent a lifeline to the shale producers. Javier the white house is winning off and opec deal . It will be an interesting one because donald trump is not getting into the white house until january but i would not be surprised if for the time being, the new york minister in the white house is ok with opec putting prices is a bit higher. The key question is whether opec is able to keep prices in that 60, 70s scenario of a barrel. Good enough for the shale producers in oklahoma and go to them but not high enough and north dakota. Annmarie how are they going to track this and implement this and make sure the countries are hitting correct quotas . Javier this will be the big problem now because what we need to start checking is, come january, Oil Companies are cutting. We cannot trust the numbers the Oil Countries are giving. The countries themselves dont trust each others numbers are so the market is not going to do it. We are going to go back into the we are going to measure the big crude carriers, the s super carriers in the middle east. Well see how deep underwater they are sinking to see how much oil is inside the tankers and then we will estimate how much the country is producing. The fewer number of tankers leaving the port of the middle east, we will know they are cutting production. We cannot really measure how much oil is going to pipelines. Russia supplies a lot of oil through pipelines. Very cheap. Annmarie well. That is javier. He has covered opec more than 50 times. This is an historic deal. He ran our top live blog yesterday and he is in the know with anythin everything going oe ground. Guy that was great. A fantastic function around these big event. All of you have had a great week in vienna. It has been a market moving event to say the least. Something interesting cross my bloomberg right now. The saudi Airport Agency and five others have been hit by hackers. Of pointed towards iran. The saudi had said linked to iran in probes early phase. I dont necessarily want to completely draw that conclusion, but nevertheless, the probe the saudis are conducting at the moment are pointing across the cyberward iran as a strike. The point the headline is making is that this is raising the fears of regional escalation. We were talking about a compromise between saudi and iran. We are talking about some very different. Part and parcel is what is happening in russia. Putinl beginning vladimir starting his annual address. Well go to moscow to bring you that event and a preview for it. Well take some of it live a little bit later on as well. Interesting subject. Maybe the French Election as well. This is bloomberg. Guy welcome back. You are watching the european open. 9 53 in germany right now. And in france. Pmi datanufacturing has hit my screen. It comes in at 51. 7. The survey number, 51. 5. You are seeing better growth elsewhere in europe. This is a positive survey number from france. I want to show you as well over on my screen, coming across the news headlines, agreeing to buy hamburg south from the group. This broken up group looking to consolidate in the shipping area. What is happening in russia right now . Vladimir putin is about to begin his annual address with speculation about the relationship he will form with the president elect trump and the french president as well. Political correspondent in moscow, henry meyer joins us now. That we could be at a Pivotal Moment here. Isarly, Vladimir Putin hoping the election of donald trump is going to assure in a new era in u. S. Russia relations. There is a lot of things that could prevent that from happening, resistance from within his own party, but the willingness appears to be there on trumps side to make a real difference in the relationship, which has been very bad. In 2017, it could turn out to be quite a good year. If you think about what the relationship look like in europe, say Francois Fillon were elysee. Ire the earl how much of a ship could we see . Annmarie theres expectation henry theres expectation that the relationship would improve. Sanctions are the Biggest Issue a horse. We need to wait and see what lead we get from the u. S. F trump follows through on his campaign promises, and he says he might consider lifting sanctions, you would see the same happen in europe. Lead is that and clear policy. France currently, one of the leading critics of russias policy in syria. Francois fillon is much more supportive of putin. There, too, you could see a big difference. Guy we are looking currently at live pictures of the event. The audience prepared for the arrival of mr. Vladimir putin and we will bring you that a little bit later on. Henry, thank you very much indeed. We will let you monitor what is happening in moscow. A live picture coming to you from moscow ahead of this annual address, delivered by Vladimir Putin. Stars are aligning. Takingtrump, mr. Fillon over in france would be a significant shift. It would be interesting to see how the spending round develops from here and how the European Military develops from here. All of that something Vladimir Putin is thinking a great deal about right now. We just had manufacturing data. A little softer on that front. Over theess, the focus next few minutes will be on what happens in moscow. The Surveillance Team will bring you all of the latest. Maybe we will get a chance to listen in. I will join the radio team as well. You can listen to bloomberg here radio now. N dab this is bloomberg. Francine oil soars above 50 a barrel as opec agrees to its first production freezing eight years. Putin and the president elect. The russian leader holds his 13th annual state of the union address. Will he announce a u. S. Russian relations reset . And ending with a bang. 30yearold bond bull market runs out of steam. This is bloomberg surveillance. Welcome to the program