'Financial Times': Oil, Tech Stocks Lead European Markets Higher; Vivendi H1 Profits Rise 67 Percent, Telecoms Unit Especially Strong
DEBORAH MARCHINI, CNN ANCHOR: The European markets are higher this morning. Philip Coggan, markets editor of the "Financial Times," joins me with a look at their performance from the "FT"'s London newsroom. Hello, Philip.</s>PHILIP COGGAN, MARKETS EDITOR, "FINANCIAL TIMES": Hello, Deborah. Yes, they are higher, but only modestly so. And Germany is closed today for Reunification Day, of course the 10-year anniversary of the two nations getting together. We've got a fairly strong performance from the oil stocks, and tech stocks are really holding up pretty well considering Nasdaq's poor performance yesterday. So it looks as if October European markets are trying to shrug off their rather poor performance in September and try and edge towards a fourth-quarter rally.</s>MARCHINI: You talked about oil and energy stocks leading the charge higher this morning in London. We've got oil up another 10 cents this morning after Brent gained $1.24 yesterday. What's roiling the oil market?</s>COGGAN: Well, again, it's those continued tensions in the Middle East, particularly between Kuwait and Iraq, with Kuwait calling in the United Nations to try and stop Iraq from making threatening noises about alleged stealing of oil from Iraqi oil fields. So there's always a concern that Saddam Hussein might find some way to stir up trouble in the region. And, of course, all the killings in Jerusalem are not helping the situation at the moment by raising Middle East tensions. So with no sign of any indication of further releases of stocks from the European Union after the U.S. released stocks last week, then, at the moment, it's tension that's pushing the price higher.</s>MARCHINI: I might have thought the Japanese yen would have strengthened given that Tankan survey, but it's holding pretty steady this morning. Any reason why?</s>COGGAN: Well, I think it got a little lift when the figures first came out. But then when people started looking at the detail, it wasn't quite as strong as they first thought, although big companies reported an increase in confidence. In small companies, that wasn't the case. And I think investors remain concerned that the Japanese recovery is pretty shaky and that the government is going to have to produce another of these spending packages to try and buoy up the recovery. And of course that's creating a real problem for the Japanese later on. A lot of people are concerned that the Japanese bond market will eventually collapse under the weight of this huge government debt.</s>MARCHINI: All right, we had earnings out from Vivendi this morning. How did they do?</s>COGGAN: Well, they came out actually late last night after markets closed and they were very good. They shared a 67 percent increase in net profits, 44 percent increase in EBITDA, very strong performance from its mobile telecoms unit, SFR, good performance from the waste and water companies which are being spun off. So it looks in good shape as it tries to merge with Seagram. And, of course, we had those changes to voting procedures yesterday. It's really tidying itself up and trying to become an international blue chip that investors on both sides of the Atlantic will want to own.</s>MARCHINI: Do you get the sense, Philip, that there's been a sort of a decoupling between the U.S. markets and the European equity markets of late?</s>COGGAN: There has a little. I think the main thing is the difference between the U.S. economy and the European economies. European economies are still rising, but of course there's a slowdown. In the U.S., there are these -- lots of profit warnings, many more so than in Europe, and I think that's starting to make investors concerned that the Fed, having slowed the U.S. economy, might really be biting into corporate profits. So that's giving Europe the chance, for once, to do a little bit better than the U.S. stock market.</s>MARCHINI: All right, Philip Coggan, markets editor at the "FT," thank you.