tv Bloomberg Markets European Close Bloomberg March 8, 2019 11:00am-12:00pm EST
>> 30 minutes left in the european trading day. from london, i am guy johnson. vonnie: and from new york, i am vonnie quinn. this is the european close. guy: a global story that is very interesting. stocks are down by .8%. cyclicals are under pressure in europe, started with draghi and the ecb yesterday. we have many stock trading down, banks trading down. oil companies are also trading down. it is interesting, it is a risk-off kind of session. the divide is there in the foreign exchange market. dollar-yen on the move today. the dollar coming under some pressure. the big one is the chinese market. . it saw a real depth earlier on. we saw some week trade data trade out -- some weak data, and that kind of set off a domino effect throughout the rest of the market.
over $300 billion oil off the chinese equity markets. the csi 300 down by 4%. come of it is well over 20% year-to-year. vonnie: we're keeping track of post payroll market reaction. . there was a bit of a mixed bag. it is another day of declines. we are 10 years past that bottom in the markets, so there is a bit of an echo as well. the dow jones industrial average is down .5%. of the s&p 500 down .7%. .6%.he nasdaq down costco is higher today, leading the s&p 500 gainers. it had a great quarter, golden star quarter, as it is being called. homebuilders are also doing well following the payrolls report. chart, youhe next can see that we have some of the oil companies, production
companies doing poorly. that is what is dragging on the s&p 500. this on norway selling its story, but also, there are other things going on in the oil market as well. we will look at that later on in our. guy: oil is down, that is a as you say, in the market today it is also a bit of the dollar story. , that is a factor. as you said, the big story today is the payroll report, it really mixed bag. 20,000 is a top line in terms of number of workers added, well below estimates. the previous january number was wages continued to push higher, that has to be positive for the u.s. economy. do you need to take a rolling view of these numbers? probably judging by the economists i have read today, that is the way to go.
chief u.s. economist from bloomberg economics is joining us now on set. is that the way to read this? it is a poor number this time around, but it is being revised tire? suspect, i you will be here in a chorus of -- one month does not a trend make from forecasters. i agree with that, we had a robust february. january was lousy. the underlying trend is about 930,000 jobs per month, well above trend. ,he mixed bag you referred to average hourly earnings moving to a poster session high, those to them are going to continue throughout the course of this year, and that is what puts consumers in a strong position in terms of spending power. it also means they will be inclined to tolerate higher inflation, and i think we will see unemployment in the mid-3%
territory this year. we shouldn't be overly bearish payroll stall, which could just be quebec from january, or maybe a little bit of reflection of some wobbling of private sector confidence in response to q4, which we know that route has reversed. vonnie: it is very unusual to have the fed chair going on 60 minutes, kara. what is he going to tell the u.s. -- carl? carl: i suspect it will be talking about fed communication and trying to provide some color around what went wrong in q4 and where the fred currently stands -- where the fed currently stands. in some regards, i think you will be a modest cheerleader of the economy, saying, ok, you are hearing concerns about a global growth slowdown. the market had a sour tone to it in the fourth quarter, but let
us not forget the domestic ,conomic fundamentals are solid and the u.s. can be a beacon of growth in an otherwise dimming global landscape. guy: one area we continue to see weakness, or not strength, i guess, is inflation. the fed is increasingly talking about is symmetrical target. if we go further than that, average inflation over a reasonably long period. you have to overshoot symmetrically on the other side. is or anything into his number that says we are moving towards a hot economy? you talk about the wage numbers. does that point us in that direction? carl: absolutely. we keep asking ourselves as economists what have we undershot the fed's inflation objective over the past eight or nine years? it should be no surprise given what was happening with wage
economy. of the we had excess capacity, we had slack in the labor market and when we have that, workers don't have a lot of targeting power. the are no wage pressures -- workers don't have a lot of bargaining power and there are no wage pressures. it is different in 2019 compared to the prior years of the cycle. we appear to have crossed behind the neutral level of unemployment. fed officials still think it is somewhere in the vicinity of 4.5%. a looks more like neutral unemployment is 4% or lower. we are basically there, because we are seeing wage pressures. it should give them confidence that inflation will trend higher. the usd that fro for instance from the new york fed president speaking at the economics club, saying that he didn't see evidence of inflation going higher in the horizon. the labor day data will tell us that inflation is coming. vonnie: right, productivity was
also better. do we see in a kind of regime change in global markets thanks to the ecb and now this payrolls report. u.s. 10 year yields are at 3.6%? carl: i wouldn't write off the productivity numbers. looking back to that, productivity is rebounding because businesses are confronting higher labor costs and looking for workarounds. when businesses successfully invest in capital to find a workaround from higher labor costs, productivity goes up. it will help to mute some of the transmission mechanism from labor costs into overall inflation, but not entirely. we continue to see a steady drumbeat of negative economic news from asia and europe. the payroll gain kind of contributes to the perfect storm of economic data, but the economic fundamentals are still robust even in light of what we
saw in today's data. if you look at aggregate income incomen, or employment creation in the economy, 2019 is still the strongest pace compared to any year of this economic cycle, strongest in over a decade. despite their retail sales last in december, it tells you that consumers will remain the bright spot for the u.s. economy. it keeps them insulated from this dimming global landscape. vonnie: carl, thank you. chief u.s. economist for bloomberg economics. let's check in on the bloomberg first word news. up.et me get you caught democratic presidential candidate elizabeth warren is proposing a plan to break up tech giants such as amazon, google and facebook. she would create regulators who would unwind tech mergers that you the undermine competition. dual entities such as amazon marketplace and amazon a six would be split apart. space x has taken a crucial step
to putting people on space aboard its commercially built vehicle. the crew dragon splashdown in the atlantic after a journey to the international space station. only a test dummy was on board. spacex hopes for a manned journey later this year. they also hope to use a boeing spacecraft to send astronauts orbit. president trump wants u.s. allies to pay a big premium for troops.american bloomberg has learned that the administration is drawing up demands that germany, japan and other countries pay the full price for u.s. troops deployed more.ir soil, plus 50% uses this as a way to prod nato countries on spending more on defense. deutsche bank and commerzbank have resumed in formal talks on under.ble bloomberg learned that recent setbacks for the bank have added the urgency to reach potential deals. germany's finance minister has pushed the idea of a merger.
the idea is too great a so-called national champion to serve the german export economy. global news, 24 hours a day, on air and at tic-toc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am courtney donohoe. this is bloomberg. guy: courtney, thank you. the prime minister was in grimsby delivering a brexit warning to mps. she is saying that if mps don't back her deal next tuesday, there is a risk that brexit doesn't happen. we talk about that, next. this is bloomberg. ♪
guy: and in london, and guy johnson. this is the european close on "bloomberg markets". let us turn our attention to europe. british prime minister theresa may saying that brexit may never have been parliament refuses to support her deal with the e.u. in a vote next tuesday. >> the only certain way to avoid it is to back the deal with the government with the au on tuesday. let's get it done. guy: theresa may in a warehouse at the looks of things, in quincy. a senior political economist joins us from edinburgh. let's talk about where we are in this brexit process. theresa may says it may never happen. has a hard brexit now been completely rolled out, stephanie? stephanie: in this kind of environment, it is hard to say that it is rolled out. but it is certainly the case that the risk of a no-deal brexit has been reduced
crucially for two reasons. one, the departure of the moderates from the conservative and labor parties. and also the labour party backing the second referendum. those two things together have managed to alter the risk balance, so it no deal brexit is much more of a tail risk than it was a couple of weeks ago. guy: do you think she will lose on tuesday, and if so, by how much? stephanie: i think that is a question she wants to answer as well. over all the expectations are that it will be really tough for her to pass. we are giving it a 30% chance but she will be able to pass the deal. for precisely the reason she is trying to get it across today in that speech, the idea that if you vote for my deal -- either you vote for my deal, or the risk that brexit gets delayed is increased. the reality is she is dealing with a significant group of mps from her own party who have a
significant ideological attachment to making brexit happen. i don't expect europe is going to hand her any major concessions to the irish border issue for them to be able to support it. vonnie: so, who flips? but this point, somebody has to flip? stephanie: it is certainly feeling that way. likelyl, it is much more that she fails to pass it ultimately, you see this question of, will the hardline brexiteers supported? it isonally think i tough for them because the balance has shifted. do you get an extension? yes, i think you do. i don't expect parliament to vote for a no deal. that youl thing should expect is for the both of them to try to figure out where element is, that is where you find out where people are
willing to compromise on both local survey and labour party side. to break the circuit we have been on the last two years. vonnie: from where you sit in that the we hear scottish people did not vote for brexit, how does it look to companies and importers and exporters? shifting -- isd the mood shifting? stephanie: as you say, the majority voted to remain, but i think overall there appears to be an awareness particularly among business. the hasn't necessarily been any mistake on the business i'd that brexit would be challenging, particularly a hard brexit or a no deal outcome. but what we have seen in the last couple of weeks is businesses coming out and explaining the degree to which this will be a challenge. you see some of the reporting from the bank of england and from other central authorities
saying that businesses aren't ready to deal with a hard brexit, if it was to happen. all this information coming now may have to tilt the balance -- may help to those the balance in theresa may's favor, and she's turned to use that anyway she can. guy: stephanie, four out of five tweets, i will show you the -- the e.u. commits to give the u.k. the option to exit the single customs territory unilaterally, while other elements of the backstop must be maintained to avoid a hard border. the u.k. will not before us into a customs union against its will. what does that mean? stephanie: from what you are saying, what it sounds like is has the u.k., the backstop the element of the u.k. staying in a customs union with the e.u.
however, there is another element, which is that northern ireland would remain aligned to the single market in that can of agreement. from what you have read, it sounds as though he is saying that the customs union element, the flow of goods between the u.k. and the e.u. could be temporary, but the implication is that the requirements for that irish border to remain fluid are not on the table. that is what it sounds like, it sounds like you can separate the u.k. customs union out, but i can't see how you deal with the northern irish issue. how do you prevent a border between ireland and the rest of the u.k. well -- while maintaining the freedom of the border. guy: the fifth one just came through -- the e.u. will continue working to ensure the uk's leaves the e.u. with an agreement. way this is your from the other side of the channel, if you are michel
barnier, the rest of the e.u., what are the risks associated with a deferment of article 50? if we push this another three months or six months, nine months, what are the risks for the e.u.? stephanie: genuinely, when you go to brussels and you speak to the european side on this, the key issue for them is they don't want to continue having the same conversations and essentially wasting a lot of time and energy on negotiations if they will not move forward and get a deal. obviously, the risk of no deal is severe for both the u.k. and the e.u., particularly certain ireland. like but i think the focus is more on if we are going to have an extension of article 50, it needs to be because something will change. we need to be on the way to getting a deal from the brussels. side, that is what they want. they want a deal consistent with their laws and their roles. that is the frustration with the
negotiations, the sense that the united kingdom is negotiating within itself and not necessarily with europe on european terms. vonnie: are you worried about what we saw from the ecb, how does this change the outlook for the european economy? stephanie: the interesting thing yesterday it wasn't necessarily the idea that you would get another program, it was the timing of it. broadly, there was an expectation that you would be the suggestion of a smoother, and easier path of policy or taking is letting more dovish tilt. but the fact that it actually got announced and discussed is there was a significant dovish surprise and a positive signal for the european economy, given the weakness we have seen. it is showing that the fed is reactive.
vonnie: stephanie kelly, thank you, asi's. senior political economist in edinburgh let us check global markets. now, we're just a couple of hours into the trading session. >> we have a bit of a pullback on our hands for stocks in the u.s. looking at the s&p 500 and nasdaq, down more than half percent. nasdaq down more than 1%. 1%.s&p 500 down more than that is five days in a row, first it is happen for the nasdaq since april. the german dax is also down. with investors are reacting to some degree to the shocking payrolls report, the headline figure of 20,000 jobs added in february. but the risk-off tone started in china, that index is down over 4%. one brokerage in china issued a celebrating. i would like to focus on the
nasdaq. the nasdaq has been on a tremendous weekly winning streak with this great chart here. and goes back to the beginning of last year. volatility was up and down in the beginning of the year, then it went sideways and to the bulls. then we had april 4 quarter with big swings. then, 10 up weeks in a row. we are looking at the first down week in 11 weeks. the first week was just after that brutal christmas eve selloff. this could suggest that we could see a bit of a snapback or pause in the rally. downside.he that nasdaq is still down 9% from its all-time high. it's a just we may be due for multiple weeks of declines. we will see. take a look at some of these big tech names. these are some of the laggards, this has senator warren is proposing to break up some of
♪ vonnie: it is time now for the latest bloomberg business flash. bloomberg has learned the new york yankees are in talks to buy back the yes network for a most $3.5 trillion with backing from amazon and others -- are $.5 billion. it is a network collection does he is selling after his agreement to acquire 21st century fox. u.s. regulators have caused t-mobile's proposed takeover of rival wireless provider sprint.
the federal communications commission says more time is needed to review the arguments for the deal presented by the companies. the agency says it wants to review significant new information. that is your latest bloomberg business flash. guy. guy: funny, we are a few minutes away from the end of trading here in the european markets, generally a negative session. that is after china. european markets being pushed well. as oil stocks are down, mining stocks are down, cyclicals being sold, volume picked up after the payroll number in the united states. the close is next. this is bloomberg. ♪ the close is next. this is bloomberg. ♪
markets are, most down pretty much the same amount. let me show you what is going on. just a few percentage points either side of it. cyclical's under pressure. oil stocks are down. , the norwayw a line story, but they are not exiting their position to sovereign wealth fund in norway in the majors, but oil is trading softer today, down 2%, 3%. plus also in the mining stocks, the banks are down. ftse 100, ducks, cap come all negative. cac, all00, dax, negative. volume is a factor that is worth paying attention to. it has picked up. there you go. kind of around the payrolls
point. we did see the volume start to pick up at a very quiet morning and a busier afternoon. i think that is an interesting narrative. the correlation between the poor performance between -- of european equity markets and chinese strong markets has been breaking down. the correlation between asia and lower has been getting and lower. you can see that reflected today. as we get into more of a u.s. influence kind of phase, you see the volumes picking up. that is a look at the european close. vonnie: stocks in the u.s. off their lows. we seeing some good stories. lowermpanies are a lot and dragging on the s&p 500. the 10 year yield slowly clawing its way back to where it was, still at 2.64%. the dollar index giving up a little gain, but not that much. bit of aa small
limited. at 17, nothing to write home about. let's take a look at movers. china among those countries that are moving the most and other asia indices as well. asia currencies, we saw weakness with the korean yuan. having aninian peso excellent day. dealer is one of the best performances will stop well, they all are in fact. is one of the best performances. well, they all are in fact. guy: let's talk about the china story, its relationship to what has been happening in europe and in the states. christina covers equities over here and joining us now on the set. let's talk about the relationship between the china story we have seen overnight, big selloff but after a decent
they in chinese equities, payroll number, and how markets have reacted in the correlation between all of these different factors. can we tell a pinpoint why we see equities coming under pressure? is at the payrolls? is a china? is it something else? what is going on? >> there's probably a combination of all of those things filtering through, but as you say, there are risks emerging particularly in europe that are not necessarily related to the china story or the u.s. story. draghi this week emphasized the risk to downside is great in the economy the moment and why they probably tilted little more devilishly. that is something that is a bit more removed from the china story and its relationship to the u.s.-china trade relationship. that is probably why we assume the correlations between the european and chinese equities breaking down a little more recently. vonnie: christine, what happens
next week and what will be the catalyst? >> next week we start the weekend waiting for the chinese data. interestingly, the data in terms of its correlation to things like european inflation expectations, still very much a strong link. we're getting data out of china, once again, good indicator of inflation out of china and as a result, inflation expectations and europe have been following that as well. we will get that right out of the weekend. early monday morning, that is something we will be watching out for here in europe. just having a look at how markets digest all of the developments this week. we had draghi yesterday, the ecb dovish pivot, a chance to digest that today in the european markets, but the payrolls number probably not fully really factored into the markets until monday morning. guy: we will get into that
brexit lot next week as well. michelle was tweeted a little bit earlier on, a fairly, he sold eu ambassadors there is no progress being made in brexit talks. it is increasingly unlikely theresa may is able to deliver enough votes on tuesday to get her brexit deal going through. how much volatility is priced into the pound next week right now? >> i don't think traders really know how much volatility to price into a just because there was a sense it could be a definitive vote, but now that we are seeing these late development into the week, there's a sense that maybe they're going to kick the can down the road further and closer to the 29th of march. it is hard to trade in that sort of environment. i would caution anyone looking at markets because it may not necessarily be reflective of sentiment at the moment just because it may be more function
of traders hedging against that. knowns, unknowns in terms of the brexit story, but not necessarily reflective of the underlying sentiment when it comes to sterling. vonnie: a little more healthy in the u.s. does this give the market taws --pause or is the market going to continue on its merry way? >> there certainly is talk of a healthy correction in certain equity markets. today we were talking about the possibility of a healthy correction and chinese equities, for instance. we do get a sense from a lot of strategists perhaps it is time for a pause because of the staggering rally we saw in chinese equities late in february and earlier this week. the same can be said of the u.s. equity market as well. we have seen equity markets kind of testing key resistance levels not really making any big sort -- breakouts.
with the lack of development in key macro stories, for instance them on the trade front, on the brexit front, and again on the monetary front, it would be understandable for investors to take a bit of a pause. european equities, it seems like the sentiment is still very much to the downside and possibly increasingly so after the dovish pivot yesterday. christine, thank you, one of our team leaders for our markets live blog. vonnie: let's check in on the first word news. here is courtney donohoe. clinical u.s. employers have the fewest number of workers in more than year last month, just 20,000. wage gains for the expansion and the chavez story felt slightly. the payroll increase was well below estimates. economists say data can jump around a lot from month-to-month. u.s. new-home construction bounced back more than expected in january. residential starts rose 18.6% to
an annual rate of a little more than 1.2 million. permits at a nine-month high. the data points to how it is anduraging builders supporting demand. the u.s. women's soccer team just escalated its fight for pay eu quality and better working conditions. all 28 members of the team have filed a gender discrimination suit against the u.s. soccer federation. the case was brought just a month before the team begins its defense of the women's world cup title. in finland, the central right resigned. has his biggest project, health and social care reform, collapsed in parliament just weeks before general elections. finland's president has asked him to stay on as caretaker prime minister until an election coming up april 14. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more 120 countries. i am courtney donohoe. this is bloomberg. guy: thank you. the auction is done at the
european equities. we dipped during the process for most of the main markets. trading lower during the auction. this is where we settled out, as you can see. if you are leaving, it is friday, and you're going to the pub in getting in the car and driving home. tune in at the top of the hour to the shows coming up. ♪
live from london, i'm guy johnson. europeanhis is the close on bloomberg president trump's former campaign chairman paul manafort sentenced almost four years in prison on froward dish fraud charges. we go live to the white house. i am sure the sentence and the 47 months reverberating around washington, d.c., kevin. what is the consensus on the fairness of the sentence? gettingo paul manafort 47 months, significantly less than the two decades of jail time he could have been sentenced to buy the alexandria courthouse last evening. we're still awaiting when he will be sentenced in a washington, d.c. court and could face additional years on that sentence he had already received. meanwhile, michael cohen for his part testifying privately this week on capitol hill before members of the intelligence committee. he is also filing a lawsuit
against the trump organization. that could be, according to sources i speak with, pose a significant risk to be a administration simply because it could be a legal fishing expedition. the mueller investigation continues to move onward. republicans are divided about whether or not they are agreeing with the president and the attorney general with regards to whether or not when the mueller investigation is complete that it should be fully released to the public. vonnie: we won't know that i guess until it happens and we won't know who is going to ask for that until we get the report in one form or another. kevin, the president is in alabama. do we anticipate hearing from him? kevin: the president is likely going to make several calls regarding immigration. it comes at a time republicans, some in the senate, have deported with him. they are preparing to send legislation to his desk he will likely veto that denies him the ability to declare a national emergency. he is facing legal threats on
that matter that could make it all the way to the supreme court with regards to whether or not he will -- whether or not his declaration of a national emergency will help them. the bottom line, this comes as the president now facing pressure from within his own uses and fully prepared to that veto on the declaration of a national emergency. guy: how close is it? how many republicans are going to vote against him? kevin: right now senator susan collins or rand paul. there are different types of republicans, but both have said they are against this. this is citing constitutional concerns. then when the president in all likelihood vetoes, republicans do not have the ability -- lawmakers as a whole do not have the ability to override a veto. it really is a lot of political theatrics developing, but still an interesting point simply because this would be the first time the president utilizes his veto power. kevin cirilli for us in
washington, d.c. it will be a big weekend of political events, including "60 minutes" and the fed chair. guy: vonnie is a glass of water. we spoke to the swedish finance minister earlier on. this is what she had to say about the economy and the risk in europe. take a listen. >> what i see when i look across the world, i see very big risks. definitely, if you look at the risk picture, it is more on the downside when it comes to global trade, which is very important for sweden. export-oriented country. brexit would affect great britain more than others, but sweden is one of the european countries that have a lot of trade with great britain. when i look at europe, i see countries that still have high debts in the public finances.
the risk picture is on the downside. ,e have to be prepared for it for that kind of potential development. we have prepared ourselves with having low public debt. that is the way you prepare for all potential scenarios. guy: the swedish finance ministers beginning -- finance ministers speaking today. maria, there are many issues with the global economy right now. many issues with the european economy right now. one of those is the banking sector. more broadly, it is about what is happening with the ecb. at the nordics face a particular problem, and that is the money laundering scandal. did the finance minister address that? >> she did. everyone here knows this is the big elephant in the room. there has been new allegations. we're looking at potentially money laundering that went into nordic countries, sweden being
one, for more than 10 years. the amount of it is almost the industrial scale money laundering. a lot of this took place in units that are not based year, but these are national banks, very much in focus. the big concern is whether this could turn into a story where the ceo was forced to leave the banks. serious outflows of clients. half the size it was the year ago. the finance minister told me we want to see an independent investigation. we want to find out what went wrong so we do not think this case in particular in sweden, swedbank will turn into system a grist. she also said the country stayed to cooperate more in europe will stop what i also hear from many in the banking sector is they are concerned because if they reveal too much information and there is not a single centralized power, they are concerned may be competitors and rivals and other countries may use that as a competitive advantage. what you have is a big single
market, eu27, but no single rule for all of them and then things like this happen. vonnie: maria, just jumping in here, making headlines that i want to let you all know, resigning from the white house post. this is according to the president and communication director sarah sanders. the assistant communications director will shine has offered his resignation to the president yesterday evening. the president accepted. we're also hearing he continues to support president trump and his agenda and will serve as senior advisor to the 2020 election campaign. once again, bill shine resigning from his white house post, assistant to communications director. he will be senior advisor to the 2020 trump reelection campaign. vonnie: maria is stick -- guy: maria is still with us. maria, we touched on what is happening with the economy, what is happening with the banking
sector. the finance minister of sweden, sounds positive at the moment, but there are plenty of negative stories. sweden is a small, open economy. prospectshe see the for her economy? >> well, there are a number of things. one, the currency. it has been under pressure for almost a year, the swedish krona and. she would be very careful not to comment on this, the of a central bank that for the time being is very contrarian to what everyone is doing. move away and kind of inject in more stimulus into the economy. they said they want to continue a normalizing of policy. if you listen to what everyone else says, but for the economy, she would be very careful not to go into what the central bank is doing but she did say there are many risks.
this is the economy according to the finance ministry, still attractive in many ways. she pointed to the labor markets, which does turn to a very tight labor market. unemployment is a must at a record low. that means you may see wage growth pickup. there were many risks. this economy is very exposed to europe, euro, and the european central bank. guy: maria, thank you for joining us. vonnie: time for our stock of the hour. shares of national beverage falling the most since 2004. falling about 70% after the across --lacroix owner announced disappointing findings. there's a little bit of a scandal. >> earnings this quarter coming in at $.53 a share verse is -- versus analyst estimates of $.76. revenue falling. the first time revenue
has fallen in several years. it was down 2.9%. it was on a downtrend but this is the first time it has turned negative since back in 2014. shares dropping today. one of the people filling that the most, probably the most, the ceo nick caporella. he owns 73% of these shares. he is not a happy man today. guy: what did he have to say about the results? mostis is one of the colorful earning statements. this is from the ceo "we are truly serve for the results. much of this was the result of injustice." that injustice he is talking , thatis the fact lacroix beverage, sparkling beverage, has faced a lot of media backlash on accusations and a class-action lawsuit that says all of the ingredients are not natural like the company claims. national beverage has said 100% of the ingredients are natural.
>> happy international women's day. it is a friday in the oil market. i cannot ignore what is going on in oklahoma. the nation's biggest storage at the highest levels since 2017. a lot of analysts saying they will continue to increase. if you take a look at the bottom panel, you can see wti trading below this redline. contracts traded at a discount. usually encourages storage, but that is not the case here. we can see morningstar coming out and saying this is not causing a pileup of oil, it is just because we do not have enough pipeline to transport the oil out. popill likely see more of a -- hi all up -- we will likely see more of a pileup. guy: i do not fancy my chances.
the correlation between european agrees and chinese equities is breaking down, but the industrial story is not. versusmes out next week the chinese import story. the two are incredibly well correlated. the chinese story indicating imports are slowing down. that does not bode particularly well the data coming out of germany. the ecb is going to be paying attention to this one. vonnie: somehow the fact you are not expecting it when cops to tell you w you did notin, guy. the winner is jessica summers. up, "balance of power" with david westin. this is "bloomberg." ♪
headquarters in new york, i am david westin. welcome to "balance of power." we begin with u.s. nonfarm payrolls report with an enormous surprise to the downside on jobs created in february, only 20,000, but also favorable surprise in wage increases. we go to chief u.s. economist for bloomberg. carl, i'm not going to ask you what your projection was, but -- so what happened? >> that was the question we were grappling with, the data came out for the entire cycle, february payroll seem to have a court where they came in stronger than the trend and stronger than consensus expectations. that is why we were looking for and usually strong results, which did not transpire. what happened? was it winter weather? not a good answer. a particular sector? et the answer,