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00:00:02Now on BBC News, the latest from New York and around the world.
00:00:05world. Business Today. MUSIC
00:00:16Live from New York at the
00:00:18opening bell. This is Business Today.
00:00:21Today. Wall Street is off to a flat
00:00:22flat start this Monday as oil tops
00:00:25tops $106 a barrel and inflation inflation data and bank earnings
00:00:28earnings loom. Oil under pressure. pressure. The energy chiefs pull
00:00:32pull out of a major gathering in in Riyadh as Iran backed Houthi strike
00:00:35strike the airport again. Also, AI
00:00:39AI warning Microsoft's president
00:00:41president tells the BBC AI needs
00:00:44needs urgent global safety rules rules and tough choices. Finance
00:00:48Finance ministers meet in Bangkok Bangkok as the head of the IMF warns
00:00:52warns countries to rein in spending spending as debt levels and borrowing
00:00:56borrowing costs surge.
00:01:03. Welcome to Business Today.
00:01:06Live from New York. I'm Michelle Michelle Fleury where markets are
00:01:10are off to a flat start. Even though though they finished the week very
00:01:13very strong last week with the S&P
00:01:15S&P just shy of its all-time high. high. Turning to the energy markets
00:01:19markets oil prices while they continue
00:01:21continue to fluctuate around $106
00:01:24$106 a barrel as markets weigh the the prospect of increased supplies
00:01:28supplies from Russia against rising rising risks to Middle East production.
00:01:32production. Now tensions escalated escalated after attacks in Saudi
00:01:34Saudi Arabia, including a deadly deadly strike on Riyadh airport that
00:01:38that killed 13 people and injured injured more than 300. Additional
00:01:42Additional attacks on vessels in in the Strait of Hormuz have also
00:01:44also raised concerns about disruptions
00:01:46disruptions to regional oil exports.
00:01:49exports. Meanwhile, Ukraine's President President Volodymyr Zelensky says
00:01:52says Russia has broken the energy energy ceasefire announced by Donald
00:01:56Donald Trump. Well, for more on the the wider economic impact, I am joined
00:01:59joined now by Amanda Rostovsky, senior
00:02:01senior forecast analyst at Espanha Espanha Markets. Good to see you,
00:02:05you, Amanda, this Monday morning. morning. Let's start with that Russia Russia deal. I think everyone was
00:02:08was caught by surprise on Friday.
00:02:12Friday. To what extent can we expect
00:02:15expect this to provide relief. Certainly Certainly that the President was
00:02:18was promising Americans at the pump.
00:02:22pump. Yeah that's a great question. question. And really there's still
00:02:24still a lot of question around it.
00:02:27it. Just as the US has been trying
00:02:30trying to, you know, keep Russia
00:02:32Russia from making money by exporting exporting these goods. So we already
00:02:37already have talks, you know, in in the broader US political system
00:02:41system here about not allowing that that to happen. So in theory, it's
00:02:45it's a, you know, a great idea. But
00:02:48But if we can actually see that product product work its way into the market,
00:02:51market, that's going to be the question.
00:02:54question. Yeah. And how much of this
00:02:56this is actually new supply? So new
00:03:02new supply in terms of what the G7 G7 has said that they're going to,
00:03:05to, you know, let into the market. market. That's also a question because
00:03:08because they said that they were were going to release stuff in March
00:03:12March as well. But is this going
00:03:13going to be new product or is this
00:03:16this going to be existing product product that they had already promised? promised? And the other piece of
00:03:20of that is, is that is, you know, know, crude oil. And we need to refine
00:03:24refine that into diesel, which is is becoming the crisis here. We're
00:03:28We're running low on diesel, at least
00:03:30least in the US and also in Britain.
00:03:33Britain. And so we need to be able able to refine that before it will
00:03:36will actually help to relieve prices
00:03:38prices at the pump. I mean, there's
00:03:42there's so much more to talk about about this, both in terms of refining
00:03:46refining and what comes onto the the market. But I want to ask you
00:03:49you about what we've seen over the
00:03:50the weekend with Saudi Arabia. I I mean, that has been a major thing.
00:03:54thing. While the Strait of Hormuz Hormuz has been closed, we've seen
00:03:57seen a lot of oil travelling through through a pipeline across the country
00:04:01country and to the other side. If
00:04:04If that now escalates there. How
00:04:08How much is the situation being made
00:04:10made worse? Yeah. I mean, before
00:04:13before the you know, the crisis in
00:04:15in the issue with Iran started about
00:04:18about 17% of crude was moving by
00:04:20by pipeline. Now we they have increased
00:04:23increased that to 40%. But that is
00:04:26is finite. You cannot just lay more
00:04:27more pipe and move more crude oil. oil. So as the Houthis, you know,
00:04:31know, begin to target more of that that infrastructure, we could see
00:04:35see this take a step back, which which is really unfortunate because
00:04:38because we've just started to see,
00:04:40see, you know, oil flows get back
00:04:43back to pre-crisis levels. So to to have this, you know, tensions
00:04:47tensions flaring again really adds adds a whole 'nother level of risk
00:04:51risk to the movement of commodities
00:04:53commodities throughout that area. area. I mean, there's been a lot
00:04:57lot of talk about the scale of the the energy shock in some way. What
00:05:00What has been remarkable is how resilient resilient the world has been in the
00:05:03the face of this. But now you've
00:05:05you've got winter. How thin is that
00:05:09that resilience being stretched? stretched? It's getting thinner and
00:05:12and thinner every day. And as we, we, you know, have winter looming.
00:05:16looming. We're also really focusing
00:05:18focusing on how much LNG is getting getting out of the Gulf as well.
00:05:22well. You know, they produce about
00:05:26about 30% of fertiliser and moving
00:05:29moving LNG through that area. And And as we get into these colder months,
00:05:32months, we're going to really start
00:05:34start seeing, I fear, a price increase
00:05:37increase probably quite shocking shocking increase. And then we're
00:05:40we're going to have another one come come next spring when farmers start
00:05:44start to buy fertiliser and LNG as
00:05:47as well. And this is just it's becoming becoming a vicious cycle. Until we
00:05:51we can get all of this cleared up,
00:05:53up, there are several avenues that
00:05:55that are going to be really affected affected by this, especially coming
00:05:58coming into the winter season. I
00:06:03I think this is not the news anyone anyone wants to wake up to. Amanda
00:06:05Amanda Rostovsky, senior forecast forecast analyst at IG markets. Thanks
00:06:09Thanks for joining us. Thank you.
00:06:13you. Well, back to the markets. As As we mentioned earlier, they are
00:06:17are near record highs. The question
00:06:19question is can earnings keep that that momentum going despite some
00:06:23some of the turmoil that Amanda was was just talking about there in the
00:06:26the Middle East. Investors are also also waiting for Wednesday's inflation
00:06:30inflation figures. And we've got got results from some of America's
00:06:33America's biggest banks starting starting from Tuesday. Well let's let's bring in our markets guests
00:06:37guests to discuss what is driving driving Wall Street and what to watch
00:06:40watch next. Rebecca Walser is chief chief investment officer at Walser Walser Wealth
00:06:48Walser Wealth Management. Rebecca, good to see you. US stocks stocks record close last week even
00:06:51even as oil prices high. What's going
00:06:53going on? How long can that continue?
00:06:56continue? Well, I think it's the the calculation that investors have
00:06:59have made March we've had you know, know, like your guest was just previously
00:07:03previously talking about we've had had positive you know, and then negative negative positive negative. So investors
00:07:06investors are kind of getting whipsawed whipsawed with the energy. And what
00:07:09what happens is they to discount discount it, they think, OK, there's there's going to be some kind of
00:07:13of resolution. We see positive Russia Russia Ukraine news even though now
00:07:15now it looks you know concerning concerning and people get frustrated
00:07:19frustrated and say, let me just focus focus on the markets. And when you you look at the markets, although
00:07:23although we do have inflation concerns, concerns, we do see a lot of positive
00:07:26positive momentum for the monetisation monetisation of AI. And so that is
00:07:29is very exciting. Investors can't can't sit on the sidelines just because because we have, you know, energy
00:07:33energy situations happening with
00:07:35with geopolitical risk. I want to
00:07:39to turn to the data. We're expecting. expecting. Obviously the key one
00:07:42one everyone's going to be watching watching is that inflation data.
00:07:45data. Also bank earnings. What are are you watching most closely. Yeah,
00:07:49Yeah, we definitely are looking at
00:07:51at CPI and PPI. We don't we are not
00:07:53not a fan of October or any kind kind of October machinations by the
00:07:57the Federal Reserve so close to an an election. There's really a political
00:08:00political rule. So we are looking looking at CPI. Last month we expected
00:08:04expected 3.7 just like we expected.
00:08:06expected. And it came in at a really
00:08:08really light 3.4, which really took took off the force the probability
00:08:11probability of getting an October October rate hike. So that was exciting.
00:08:15exciting. And we're looking for more more of the same. We do not want
00:08:17want the fed to get a mixed signal.
00:08:19signal. Now with PPI coming out Thursday, Thursday, CPI on Wednesday we don't
00:08:22don't want any mixed signals. We We were just wanting straight normal.
00:08:26normal. Let's pause for October and and then let's figure out December.
00:08:29December. And we're hoping that the the number can even even maybe possibly
00:08:32possibly ease some December. Obviously Obviously the banks reporting this
00:08:36this week net interest income. We We are expecting that that will start
00:08:39start to really impact earnings even even more into 2027. We're still
00:08:43still thinking that Q3 will be robust.
00:08:45robust. And I because we still did
00:08:47did have quite a bit of retail purchases. purchases. The retail numbers are
00:08:50are still going up even though consumer consumer sentiment is going down.
00:08:53down. So that's a very interesting
00:08:56interesting dichotomy. We're going going to leave it on that dichotomy. dichotomy. Rebecca Walser thank you
00:08:59you very much for joining us. Thank
00:09:01Thank you so much. Now, AI has been
00:09:06been a big driver of market activity
00:09:09activity of late, and it is certainly certainly a hot topic for the President
00:09:12President of Microsoft who says more
00:09:15more action needs to be taken to to ensure that AI technology remains
00:09:19remains a benefit to humanity. Brad
00:09:21Brad Smith told the BBC's Big Boss
00:09:23Boss Interview podcast that work
00:09:25work on AI regulation needs to start
00:09:27start immediately, and that the current
00:09:29current system of self-regulation self-regulation was not working.
00:09:33working. We should always worry that
00:09:34that regulation can become too heavy-handed.
00:09:37heavy-handed. It can slow innovation innovation and I think President
00:09:40President Trump is right to remind
00:09:42remind us to think about even worry
00:09:44worry about those concerns. But right
00:09:47right now I'd argue that AI is moving
00:09:50moving forward faster than the speed
00:09:52speed of safety. That's not good good for the protection of the public.
00:09:55public. It's not even good for the the industry itself. And usually
00:09:59usually what happens and you take take I'll just say, our Congress
00:10:02Congress in the United States, if if a product moves faster than the
00:10:05the speed of safety accidents happen
00:10:09happen and then Congress moves faster faster than the speed of thought,
00:10:12thought, and then you just end up up with a dynamic where everything
00:10:16everything comes to a halt. I don't don't think that should be our goal
00:10:18goal either. AI is an extraordinary extraordinary resource to grow the
00:10:22the economy, to solve societal problems, problems, or at least help. Let's
00:10:26Let's strike the right balance. Well,
00:10:30Well, AI will certainly be a hot
00:10:32hot topic amongst world leaders and
00:10:35and finance leaders who are gathering gathering in Bangkok for the IMF
00:10:38IMF and World Bank's meeting, annual
00:10:40annual meeting. Laura Cooper is head
00:10:42head of macro credit and global investment investment strategist at the global
00:10:46global investment manager Nuveen. Nuveen. Laura, what can we expect
00:10:49expect from this meeting in Bangkok?
00:10:51Bangkok? I think there's a number number of global factors that are
00:10:54are currently on the minds of these these members meeting. I think largely
00:10:58largely it stems from, you know, know, the need for fiscal restraint.
00:11:01restraint. If we look at debt sustainability sustainability concerns that are
00:11:05are certainly playing out in the
00:11:06the global bond markets as well,
00:11:09well, AI and the numerous forces forces around that, from inflation
00:11:12inflation to growth to, you know, know, the potential need for regulation.
00:11:16regulation. And then just more broadly broadly around the geopolitical dynamics
00:11:20dynamics that many economies are are currently trying to grapple with
00:11:23with and the implications that that that could have for global supply
00:11:26supply chains and of course, inflation.
00:11:29inflation. Yeah. I mean, how does
00:11:31does that all mix together for you've
00:11:33you've got the IMF warning that countries countries have to address their high
00:11:37high debt levels, the geopolitical geopolitical shocks are making that
00:11:40that worse. And at the same time, time, you've also got that inflationary
00:11:43inflationary pressure from AI. Well, Well, and to your point, there are
00:11:47are all converging at the same time. time. We have the energy shock that
00:11:51that is driving up inflation risks.
00:11:53risks. In turn, bond markets are are pricing in those higher inflation
00:11:57inflation risks. But as well, the
00:11:59the need for central banks to tighten tighten policy rates in response.
00:12:03response. And that's aggravating aggravating the fiscal dynamics because
00:12:07because higher yields mean higher higher cost of servicing. What are
00:12:10are already elevated debt loads. loads. So it's essentially creating
00:12:14creating this feedback loop. And
00:12:17And really the only near-term solution solution is to embark on some kind
00:12:20kind of fiscal restraint, which can
00:12:22can be very challenging in this backdrop backdrop where we're already seeing
00:12:26seeing fiscal pictures being quite
00:12:29quite challenged. Well, we will have have more from the IMF meeting in
00:12:33in Bangkok throughout the course course of the week throughout the the course of the week. Laura Cooper
00:12:37Cooper at Nuveen thank you very much
00:12:39much for joining us. Yeah. And that
00:12:44that is about all we have time for. for. Just a quick recap of what is
00:12:47is happening with the markets. The The S&P 500 little change. Micron
00:12:50Micron is the stock leading markets markets lower because of concerns
00:12:53concerns about competition from a a Chinese rival. That's all we have
00:12:56have time for here. Do stay with
00:12:58with us on the BBC. Goodbye. MUSIC
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00:14:39The BBC was always on in the
00:14:41Moshiri house and my dream was to
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00:15:06the world Today for BBC News. Hello.
00:15:10Hello. Welcome back to BBC News Now. Now. We just want to bring you these
00:15:13these pictures coming to us from
00:15:16from Belgium because protesters there there again Gen Z protesters, as
00:15:20as we've seen in a number of countries
00:15:22countries now on a number of different
00:15:24different issues in the main, making making up these demonstrations. And
00:15:28And here it's been linked to austerity austerity and also about education,
00:15:32education, as we've seen in those
00:15:35those protests around France. But
00:15:37But today, as over the weekend, there
00:15:40there have been clashes and skirmishes
00:15:43skirmishes between protesters and
00:15:45and police in Belgium. This is in
00:15:48in the capital, Brussels. So there there were clashes between riot police
00:15:51police and protesters over the weekend.
00:15:53weekend. And as I say, more skirmishes
00:15:57skirmishes between the police and and the