tech and utilities, week in europe. we will get more details as we get the stocks opening up this morning. of go back and talk about some of the consumer stocks in a little more detail now. we have seen steady sales growth in china and north america. however, there are still challenges. one is the profitability of its reebok rand. the restructuring brand will pay off. how long will he give it? davos.o back to francine: we are focusing on addidas. we want to focus on the brand and what the protectionist message that trump brings back. we have the ceo. when you look at adidas, the resurgence is one of the most impressive stories. this inspires many of your competitors. if you look at the landscape of the next 12 months, what are you most worried about. -- i have been to been to davos for 12 years. there are not many things to worry about. i see a very strong america. i am more concerned about, can europe focus on the future instead of the past? terms of sales, the u.s. is looking good? in 2017 we grew approximately 30%, w

there is room for europe. francine: do you think chinese investment and money could come to europe instead of the u.s. because of the tariffs? lars: we have seen increased chinese interest in europe. things are not black and white. this american first agenda is europe first agenda. we have to protect ourselves to some extent. we shouldn't be naive. i am totally in favor of free trade. we have a level playing field. we have to discuss with the chinese the way they controlled the companies. that is not exactly free competition. minister, do you believe donald trump is changing the language of diplomacy? is it different the way now that heads of states speak to each other because of the way the president tweets? lars: to some extent. i will not regret. we speak honestly and very clear and very loud. , that's ok. isadjustment of you important to say that it's not only donald trump. i mean, around him, many, many good people, etc. and what i realized during the last year is that europe is much more than washington.

different in europe. most major indices fell on the first session and misted -- and may be a big concern. -- joining us now, mark cudmore. it's one of those things are we don't know. but we see less trading? mark: i think so. i think we'll see lower volumes due to lack of clarity. this week will be a little bit of an anticlimax as far as the announcement. i think we'll see less coverage and research on small caps and might see them over time have a larger discount to large caps. it may provide more opportunities. is a very big story and is currently a slight hindrance but it won't be the big news this week that is going to explode. guy: will we see fewer ipos? we may see smaller companies not covered as well. therefore the incentive to come to market may not be there the way it once was. people try to come to market a different size. larger ipos. smaller ipos may be hindered. guy: the story thus far this year appears to be discontinuing climbing commodities. we are seeing a little bit of a move off this m

if i may say, exactly the same happens in europe as well, because if you look in europe, nominal yields have been going up. real interest rates are very low . indeed, some of the spread, particularly in the credit markets, have been tightening. we have a global story where financial conditions remain very easy, and that is very supportive for the economy at this point as well. we will have to see again whether or not that is changing all by its own, or whether the central banks will have to deliver more of a tightening guy: path to get there. let's put you on the spot. where is the u.s. tenure at the end of this year? peter: we reckon around 3% or higher. guy: ok. we will wait, and we will watch. it is early to be making the sort of calls. it is always fun. peter schaffrik is going to stick around. up next, optimism and in berlin. between thetening parties. we are live in the german capital for the update. that's next. this is bloomberg. ♪ guy: welcome back. you're watching the european open. we are 11 minutes into trading in europe. let's take a look at what the map looks like around

that is it for "bloomberg daybreak: europe." this is bloomberg. ♪ guy: welcome to "bloomberg markets: european open." the cash trade is 30 minutes away. the dollar-yen climbs through 1.10. has kuroda lost control? will yellen's successor really deliver. and down the drain. french utilities missed estimates. the stocks are called

is this a problem for europe? translationadline is an issue to look at for companies, but on the other hand, europe and the u.k., good at leveraging. whether central bank would be weaker. theseholding down euro-dollar and sterling on the trade weighted levels. now, the hope of the demand remains strong. that helps with volume growth and on a national level. can i make a suggestion? in greenve the pound in the euro in blue, each country has a color that would make the spaghetti chart easier to understand. [laughter] that is just my chart suggestion of the day. i want to ask about inflation. now we have heard from kuroda. maybe there was loss of translation in davos about getting back on target. there seems to be a global phenomenon. how does inflation in fact stocks -- impact stocks? back to the comment i made about the yields in general. inflation expectations are still relatively muted. a strong backed up in terms of demand, if you have got employment that is robust, if you have got commodities that stay at rebou

welcome to "daybreak: europe." london.00 a.m. in the prince is released, along with the final checkout riyadh.t saudi arabian and putting markets are in fairly good for. stop market rallying. the stock markets are basically ignoring the rally in the euro at the moment. could that be the concern for the threat pain threshold? brexit troubles mount for theresa may and you have the house of lords perhaps challenging the brexit bill. demand andeeing calls rising for sterling. you have the nafta discussions going long, the longest since 2009. your overall complexion of these european markets, commodities are rising and oil is rising. withn davos they are busy their hangovers. i suppose that speech from mr. trump on friday. anna: it cap to many people late. -- it kept many people late. not changecific, this morning. one hour ago, we were making modest gains in the asian equity session, picking up where we left off in the united states, where was the all-time highs in those markets. let's talk about currency markets. the dollar is stron

as i was saying, the demand is strong in europe. the ecb has been crowding out, but they have been winding down the amount they are buying. some of the things that would indicate that they were supporting the market, where sovereign bonds were trading relative to cbs, for example, those relationships have indicated the market isn't leading that much on the qe buying at this point. there may be surprising resilience in the markets as we go forward. jonathan: marilyn, they don't buy financials in europe, but the spillover has been pretty clear, the reach for yield has been clear. can you remain constructive on financial credits, hybrids, contingent convertibles, at a time when the ecb is set to pull back even further on qe and potentially end it altogether? marilyn: as was just said, there is insatiable demand for yield. there is a huge amount of demand particularly in the eurozone, where the ecb is still buying bonds. even though it functions at a lower rate. i think we have to be a lot more careful and selective in the names that we

to europe and trickling to emerging europe. kind of surrounding dollar weakness. let's not forget, the way u.s. politics develop themselves in 2017 suggest we could have w aves of risk. they have been perceived as dollar weakness. francine: what kind of level? >> i don't believe -- europe can go to 1.25 there easily. francine: at what point does euro strength need to be brought down by mario draghi? >> he does not need to do a lot right now because the economy is doing quite well. but i think you would like to see more inflation. that is the point at which, maybe, if the ecb is serious about the global monetary cycle, there is not human that says he does not want to wait much longer before talking the euro down. the tightening will not bring the euro down at all. we're in a bit of a bind. francine: what does the fed do from here? will this impact the other currency pairs you look at, but how do visually fed be this year. three hikes, three small hikes? >> ivanka think we are talking about three hikes. they are slightly higher than? it suggested. i think the worst

guy: what about europe? mark: the europe story is still very positive. i am concerned to how the trading is long at the moment and i think the story is very talked about. everyone is saying the u.s. has done a lot of their hiking and are well through the cycle and europe will start taping -- tapering. i'm not convinced. the euro will be slightly volatile. i wouldn't be particularly bullish here. i don't think it is that exciting this year. people are getting on too late. guy: let's take some of that and have a little fun with it. is consensus trade is asia going to do well, emerging market currencies will do well. are you on board with that? they have come out of the gate strongly. is that a reason to sell them, said run away from january? a historical basis, what you tend to find is at the beginning of the year, the currencies that do best turned a first month of the year tend to sell off during the rest of the quarter. that is a historical basis. one thing to bear in mind is the positioning, as well. exciting, the most trades tend to be the one that lo

europes a bumpy year for . in spain, a crisis threatened to tear the country apart as the catalonian government declared independence europe. that led to the spanish government removing catalan leaders. the future of the region remains unclear. iberdrola is based in the country and ignacio galan is still with us. thes ago you came on program talking about the spanish economy and you were showing me charts. what would you say the state of the spanish economy is today? andcio: if you remember, one of those interviews we were in the middle of a crisis. normally, we are never warm. we are hot. we move rapidly from the crisis situation to the growth situation, and that is what happened. , certaineasures changes have been made already in our regulation, and that makes spain continue the move into growth, eating all expectations systematically. -- beating all expectations systematically. every year, we are increasing and over half a million new jobs , so the unemployment has diminished over the past three years must t

europe is cheaper, as well. matt: french banks, we were just listening to ana botin talking a great game for her bank. a much moreare in difficult situation, but why do you like french banks? patrick: that is a sweet spot in terms of middle ground. core ratios are very good, they are trading at 11 times earnings, 4% dividend yield, trading at tangible book value so you don't have the tail risks from the bad debt. they have cleaned up more than peripheral countries have. you get paid 4% while you wait for the recovery. if you have a shift up in yield curves, you get an interest rate margin. valuation combined with a cyclical back drop, we think french banks are well-placed for that. matt: and the possibility the ecb makes some moves? patrick: we think september is almost inevitable unless the background changes and they are done with qe by this year. zero interest rate policy is probably on the cards for next year. that is an accommodative central bank compared to the u.s., higher valuations. matt: it could attra

let's take a look at where europe is expected to open. bit in be up a little europe. less than 1/10 of 1%. the continental markets look fairly flat going into the start of trade. watch altice, any feedthrough from what happened with the samsung story, watch the house builders out of the u.k., the employment companies out of the u.k.. plenty to think about, plus the carmakers. let's see how the ftse 100 is coming through. we expect it to outperform a little. 76.97 -- 7697 is where we are trading. europe is out of the gate on the front foot, not a great step forward, but we are at least seeing progress coming through. tack expected to deliver similar numbers. ftse performing .2% to the upside. ibex flat. let's look at the sector story. the market is up by 1/10 of 1%. health care day at the j.p. morgan conference in san francisco. you will see a new slope come late to the start of trade tomorrow morning for the health care sector. financials well bid, materials look more mixed. we will keep an eye on the carmakers. the reasonably mixed, samsung news the big story. ces up

around europe, largely kind of down markets. remember we have had five days up for the london market. it's flatlining at the moment. we will see how we close out, but at the moment the theme seems to be negative. australia broke a five day winning streak. the s&p, up six days in a row. yesterday, decent rotation on the back of the bond market moves. what is happening in tech at the moment will determine what the year will look like. after four consecutive years about performance, can it continue? right now leading tech manufacturers are battling at ces to impress investors, journalists and ultimately consumers. we were talking about this during the break. does it have a lithium battery in this ere? because the the airline makes you take it out. let's talk about tech, away from ces and the razzle dazzle. will tech continue to have a great run in 2018? do i need to be more concentrated in the way i hold tech? you are saying other areas, semis, etc, they might not have such a great year. mark: i think over all technology is not as

big gains in europe yesterday. we could see gains today. you would expect to see investors selling off debt in order to raise cash. you don't see that so much. this is the one-month chart. let me switch it to one-day chart. bund truem into the today. yields are up a bit, so investors are selling off on this to a next and, but looking at a 44 on the bunds. not a huge for -- break from the range. thatstocks bid, the story has dominated the beginning of this year. around the world, let's show you what is happening. aussie market bid, germany very strongly bid. is this going to be the year the industrial capex style kicks in to gear. -- ballot 25, plenty going on. the emerging market currencies, yen is trading off, a risk on kind of day. let's show you the commodities space because this could set the tone for this year. down, bloomberg commodity index down, crude down, brent down. a strong run beginning to fade a little bit this morning. let's get a first word news update with juliette saly. in the u.s., a bombshell book detailing dysfunction,

we see an increase in europe. -- will see an increase in europe. jack flherty and robert tipp and marilyn watson will stay with us. ae front end up nine on 10-year notice. from new york, still ahead, the final spread. coming up next. this is "bloomberg real yield." ♪ jonathan: this is "bloomberg real yield." it is time for the final spread. you have great decisions from the bank of japan. rate decisions from the bank of japan. also next week, you have another and gdp ratesngs, from the united states and the united kingdom. robert tipp, marilyn watson, and jack flaherty. this is small widening we have seen, almost across the board -- jack -- robert: there is a lot to work through in terms of the impact of the changes in the tax law. jonathan: what have we learned so far on the tax bill? you able to establish a view on high-yield at this point? jack: the very lowest run of high-yield -- rung of high-yield can be hurt. jonathan: doesn't it mean restoration on the overall index on the it mean less overall index? >> they are bringing money back. that

that is an opportunity europe also has. manus: the base case is that [indiscernible] is under leveraged. are we there yet? are we at that confidence level to re-gear? grace: corporate confidence is higher. you look at the data coming out of europe, the pmi's and consumer confidence is high. we do see -- advocate re-gearing of corporate's and europe. still to modest and sensible levels but that can make a meaningful diffident -- difference. -- where do you go, small caps, m&a? than: 2017 was still lower 2016 and from it and amid a -- an m&a perspective. broade talked about synchronized strong growth. it is ultimately quite tricky to find reasonable topline growth and small caps is an area that we think benefits from m&a. manus: what is your wildcard call? everybody, you look at fund manager surveys, everyone is cautious. the story is well documented and well a -- articulate it. the u.k. would be my wildcard call. anna: thank you. manus: there is an opportunity. thank you for being with us. set for a higher opening. grace is

caroline: we think it will outperform europe. earnings growth will not be a strong this year for various reasons. we do not have the currency boost we had from the weak currency last year. we do not have the same pickup from the commodity cycle. it is a bit more muted. on the currency, our forecast against the dollar is 1.36. , it is a is saying very undervalued currency, but what will be the catalyst to unlock that valuation and when is harder to see. francine: thank you, carolyn simmons and andrew sheets both stay around. intelith "surveillance," says its ships are vulnerable to hacking and performance slowdowns. no longer in turnaround mode. john chen discusses the company's future, and growth strategy. this is bloomberg. ♪ francine: this is bloomberg "surveillance," i am francie in london. shares in intel -- i am francine lacqua in london. intel confirmed yesterday its chips contain a feature but other semiconductors are also susceptible, and disputed its products contain a bug. nate lanxon joins us. caroline simmons and an

the truth is, europe needs the investment. this has been a credit and cover recovery in europe. china is one of the significant investors in a number of regions in europe. view, closernt of economic relations are very important. do you worry about the next pboc governor and the challenges they have? away from the trade, if you look at the risks in 2018, the new person in charge will still have to deal with the deleveraging. >> china still has to be looked in reserves.b reser if you calculate that that 15% or 20% in the banking system. the net reserves, if you had to fix the banks, will be roughly half of the official number. however, what if investors failed to recognize that there is a very large. amount of savings across chinese consumers. which is over $20 trillion. of theonly take 5% savings and funnel the into thepitalizing banks and state owned companies, you have solved the problem. it's not a complete market economy. some of the savings from the national pension funds to capitalize the banks. to real issue is how engineer a future growth model, which is not too resource

and europe this year? richard: if you think about the context, when you had previously, surges in energy prices, when the economy was relatively weak, the context is very different. .nemployment in the fore unemployment coming down very rapidly elsewhere. small changes like this begin to have an impact and perhaps this feed through is more likely to happen. hotspots happening in the labor market. they may be compounding some of these other factors from transitory issues like food and energy. what about the possibility of the rising oil prices? the rising price at the pump causing headwinds for consumers in respect to the global growth story? it could do, but we are not talking about a rise at the moment. the west gas prices reaching levels people have not seen before, we are a long way off having the writing impact on particularly the u.s. consumer. if you look at the offsetting theors, wages are rising in u.s., and the employment picture is very good. i don't think that will deter consumption in the u.s..

brexit is a problem for europe. europe will be diminished. it will be without the strength of the british economy. it will be politically weaker. francine: which is what the people voted for. >> and the question is, will they hold to that position one they see what the alternative is? francine: that was former u.k. prime minister tony blair. now onto the banking sector. india has set its sights on becoming a $25 trillion economy by 2025. that is according to narendra modi, speaking here in davos. that was yesterday. mr. modi saying india is removing the red tape and laying out the red carpet in an attempt to kickstart growth in an economy which is forecast to expand at a three-year low. let's speak to one of india's biggest banks. joining us is the cio. also with me, haslinda amin. i think it is your first davos? haslinda: it is. it is very cold. francine: thank you so much for joining us. the indian banking sector has a lot of things to scream about in a good way, but also huge issues. what is your main priority and your biggest concern? >>

it is the same in europe. there is an element in europe that could move to the next decade, but it is not obvious that is the tendency across the continent as a whole. tom: this will be something to touch upon in the coming weeks. i am looking for to this election. francine: i am, too. we have a strong italian convict -- contingent in dallas. robin niblett and david page state with us. coming up, we will talk about brexit, we have a couple of currency moves, and we speak with neil ferguson on radio. this is bloomberg. ♪ this is bloomberg. ♪ tom: it is the sixth visit to latin america. he is from argentina. chile andf visiting peru. in the meantime some political le and realin chi effort in peru to meet with the indigenous people of the amazon river system. he will speak to them about the rainforest and some of the hardships they faced. . good morning. this is bloomberg surveillance. from london, francine lacqua and tom keene. republican congressional leaders are trying to over a government shutdown on frid

europe to even negotiation. why doesn't europe say this is the way it is, move on? >> i think there is the greater risk of disunity in phase 2 in terms of process, there's already pushback from member states that want to begin preliminary discussions on trade as the council guidelines dictate heard that will not start until march. there's pushback -- a lot of countries feel the binary character of the templates in the offer to the u.k. are exactly that, too binary and that there is should be some space in the middle. the union is going to deal with greater pressure points, greater disunity through the process, but i think the ultimate deadline that will guide the ultimate approach will be the u.k. can be better off as a third country as it was as a member -- then it was as a member state and we have to work through what that means. tom: this is so highbrow. tim ross, help me here with what happens. if i am at heathrow switching airlines out of europe, what are british people going to do. is there going to be thr

europe is more in that situation. as time passes, i would expect stronger activity in europe to put upward pressure on inflation. again, the phillips curve is flat. lots of other factors will matter as well. matt: how do you see the urine economy compared to the u.s. economy -- the european economy compared to the u.s. economy? >> growth is not very different in the two economies. europe if anything is growing a little more quickly relative to the potential. the labor force is growing more slowly than in the u.s. the big difference is that europe is maybe four years behind the u.s. output trough in the u.s. in early 2009, output trough in europe in 2013, that is a simple way of dating it, but i think it gives you the right sense of europe being on the same broad macroeconomic path but just with a four-year delay. matt: thanks for your time. looking forward to this conference. chief economist at goldman sachs. anna: thank you very much. matt miller with the chief economist at goldman sachs. fascinating conversation abo

peter, let us get back to europe and the risks around europe. matt? matt: i feel like this is a fascinating headline. everyone was saying that this was a possibility and the case but to have leahy openly admit this -- we are talking about products that are billions of dollars -- billions of dollars of products have already been sold and if they are going to close down this line, what does that mean for those holding these planes? will they continue to maintain them? will they continue to make parts for them? are they going to stop making comfortable planes? guy: very few people are ordering it. they don't think it is very economical. they would rather fly the triple heavies like the 777. the 380 was built for a model that in many ways does not work. you look at the number of big heavies coming into heathrow. you have to go to west london to appreciate how many three 80's fly in there. people increasingly want to fly point to point. airbus made a big bet on it. boeing went to a different route. it went with the dreamliner and the more fuel-efficient ai

from europe? brexit election were held today, how to you think the u.k. would vote? with a vote to leave or remain? -- who they vote to leave or remain -- would they vote to leave or remain? i don't think it is clear-cut. byron: that's why it is a surprise. it would be a surprise for corbyn to win. i think britain would try to move closer to europe as a result. vonnie: either way, what do you see happening with the british economy gdp wise? byron: right now, brexit remains the britishthink economy will be the slowest economy among the major countries in europe. sterling,eaking of you have a strong call for the euro and the u.s. dollar. where do you see sterling going next year? byron: i could see sterling going down. i could see it going back into the one 20's. -- the 120's. call,i'm looking at your you say the electorate question, -- usefulness of the eu abandon the euro in terms of the national currency. do you sense with the election of emmanuel macron and merkel cobbling together a coalition,

francine: from all over europe. we have an interesting tax for nonresidents if they moved to portugal in the first 10 years. this has attracted a lot of residents. it is growing at 20% this year and helping the economy. francine: can you attract certain parts of manufacturing away from the u.k.? if there was no agreement with the eu or penalizing agreement? we aree: -- manuel: seeing growth of 11%. in some manufacturing like the automobile and aeronautics, we are growing at more than 16%. this is coming from french, german investment and even chinese and indian investment. we are in tracking -- a tracking investment from all over the world. with brexit, we are attracting more of the shared services that are moving part of their activity to portugal. britain,appening with but also happening with french companies and german companies. we cannot related only to brexit, but i think brexit is making some companies want to have a stamp on europe and portugal offers competitive conditions. francine: one of the concerns is

in europe, there is no question. on opponent remains quite high and that will mean upward pressure on wages gets delayed, quite apart from the impact of technological change. so i don't see this as the year went inflation emerges in europe. in any case, i think you will see inflation in the u.s. for you see it in europe. i don't believe that's where it's going. hase is a problem the ecb in that they have got all kinds of different fiscal policies, different countries they are running monetary policies for. there is not a consistent way you can see them escaped qe. the fed tapered easily to the u.s. economy looked like it had some sort of escape velocity. i don't see that yet in europe and that's my concern. anna: when the ecb looks at timing around moving away from qe, they don't want to talk about politics, but politics for 2017 was the big concern for many people. maybe the risks were overestimated, but is that going to be the case this year? you mentioned italy, does that hold more significance the markets are giv

we talked a little bit about europe. you talked about the individual spaces from a geographical point of view. where else do i go? >> i still think banks and commodities and resources and materials. the commodity mom has been quite impressive. -- the commodity boom has been quite impressive. it is a little bit richer in the near-term. the risk is if oil comes back from the levels, we see weakening. sectorshe two clear to stand at our commodities and financial regulators. matt: if i look at year to date 600bdd break down the stoxx by the sectors, you still see auto-parts wailing on everybody else, up 0.2% this year. why do you think that is, and it does that continue? >> i think it does. i think the auto sector looks very strong, but that is not a european story. if you look at the u.s. auto story as well, it is a similar structure. so, yes we like the alternative. that is a store that again, we think could continue as well. guy: how big a headwind from the telecom point of view is the euro? how does the euro feed into th

or europe. we need to do more there, but there is some informal collection system going on across a wide range of waste. what we need to create is the circular economy, create value for that. we did this in mexico, for example. you go back a little more than 10 years, it was less than 10% of the plastic was recycled. now it is 60%. how? the informal economy was collecting the waste, but there was no market for it. no one wanted to buy it. we went into the marketplace and bought the plastic, invested in factories to recycle, and we used that in our bottles. i think there is a model there for china and other parts of the world on how to create value. david: you put out a bold strategic vision called total beverage company that includes things beyond coca-cola and diet coke. these five categories, what is driving that? is that basically to get away a bit from sugar drinks? james: actually, we are following the consumer. when you look at what is happening around the world, as the world is urbanizing

versus investing in europe. we are more concerned about the problems we will have to face over the next 12 months to 18 months, between monetary, fiscal, and political issues. matt: all right, james asked she athey is going to stick with us. we are going to talk about the french connection in china. president macron begins a visit to the country. will he succeed? we'll discuss that. a couple of stocks you are going to want to watch. micro focus down 9%. it sees a decline of 2% to 4% in fiscal year revenue. mothercare. it is a microcap stock. some footballers make more than this company is worth, but it is worth 30% less today than it was on friday. worldortization of the starts to take down companies like this. this is bloomberg. ♪ guy: welcome back. you are watching the european open. we are 13 minutes into trading this monday morning. it was quite a friday for global equities. s&p charging. european equities on the move. this morning, to be honest, with the exception of london, which is going nowhere in a hu

in europe, that is much less likely to happen. though that gap is there, it is less likely to persist. tom: i have not shown this chart in ages. i'm going to put it out on twitter for radio london and the rest of the radio worldwide. here is the 1970's malaise. here's the 1990's, we can't get out of our way. and here is the recent lift. what's the element of just treading water here, dan. do we have a risk of equities just treading water? dan: i think certainly that is more the risk in the u.s. clearly you had 20% returns last year, quite phenomenal, given how much you already had since 2009. then, you compare the multiple that you have on u.s. equities to the earnings outlook and it seems out of line. the way you get a compression of that multiple is not necessarily markets declining, but earnings continue reasonably well, but the prices do not reflect that more in the future. i agree, that is probably be more likely scenario. tom: i think it is really unspoken, folks, and it will be one of our studies with our guests through jan

china is doing well, europe is doing well. maybe my formula of putting america first is not with the worst for the rest of the world. francine: when you look at the tax plan, does it help with forecasts at the margins? how much have we been able to whether companies will reinvest, how much they get back to employees to help with inflation and consumer, or how much they are giving back to -- in dividends and buybacks? christian: we have been relatively conservative. half a percent of growth this year and it may be an increase in disposable income through tax breaks. we are a bit more skeptical in investment. one of the main points we make is financial conditions are already very low. very cheap in a way to get financing to invest. if you have more growth, that may be an incentive. overall, growth will be relatively limited. the big effect is on earnings per share. i think the market has largely priced that in. francine: christian keller, thank you so much. we will bring you full coverage economy forum in davos january 23, speak

europe can end up outperforming on the currency side. perspective,al strategist will tell you europe is more attractive. you've got arguably cheaper multiples. i am a little less convinced of that one. 24% of the u.s. markets is 4%. in europe, tech stocks tend to trade at high multiples. multiples. are global view is the over whites -- overweight's are in europe. a neutral., more of perspective on a global view, we were more bullish on u.s., the last year -- on the u.s., last year. our biggest concern right now is the sentiment it has gotten a bit ahead of the stocks. certainly that must imply caution. tobias: it does and i will say this. as we have seen that model start to shift the last seven or eight weeks and really pick up, it was kind of stuck in neutral territory and just at a two ratchet up -- just started to ratchet up. when we saw that happen as we raise that issue, our clients are saying don't harsh my mellow. everything is good, just enjoy the ride. i would say the qualitative feel is backing up what the quantitative data is

based incurring more cost in europe. cost base we had in asia and the u.s., we do stand a forward contract. when we have a big increase of instance, that of one percentage point on that margin. we are relatively insensitive to it. anna: what about the sacred nice global growth? it is something we talk a lot with our guests. is that something you can evidence when you look at the spread of demand globally for asml products? wolfgang: we benefit from a strong semiconductor. that growth and so my conductor is strong. if you talking to people who do forecasting for a living, they think semiconductors will have a strong year. last year, growthless 5%. intensity is continuing to go up. with our products, we can outgrow the semiconductor market which we have shown last year, and which i am sure you will see over the coming year as well. so my conductor growth is going strong. you see applications in numerous fields, and we are very positive about that. manus: one of the products everybody wants an update on are the newest equip

europe is stronger. two years ago in the u.s., people were discussing not whether the eurozone would break up but how. tom: exactly. you quickly, who are focused on in all of o your reading and experience. what is the thing you're keeping your radar on this year? >> well, iran. first korea, north korea, iran, obviously. i would want to agree with alberto. many people are assuming that just because the bite has not been as bad as the bark on trade, they are assuming there is no risk but i think there could be a risk. it is crunch time. tom: thank you so much. we continue. this is bloomberg. ♪ ♪ retail. under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast bus

when you think about europe and what the plan will mean for europe that the two .arties what kind of details do we need to see? you will be talking about this later on? what does germany need to deliver if it wants europe to take a step forward. >> germany together with its partners needs to deliver two .hing we are trying to make the eurozone more resilient to shocks. we need to combine these two things. in germany, there is a lot of complacency about that. the government thinks it has to do nothing because the economy is growing all right. but that is not right. a great message to end on, but i wanted to add one more. do we move closer to the banking in? it will only tackle it if it is combined with structural changes towards more market discipline. it is very much about depositing health insurance. so, many are afraid of that and hadthey are lacking better payment for private investigators. thank you for your time this fuest., clemens january 24th.u on tom: watch burberry, asml;, watch the car stocks. this is bloomberg. ♪ guy: one minute to go until the start of trading in europ

and there are plenty of opportunities in europe. where are you looking in europe for opportunities? have flexibility to invest across the spectrum, smaller caps on got much more local exposure in japan and europe. they are not going to suffer from a weaker dollar. they've got the names that have real sensitivity to the economic growth in europe which is due to above theotentially growth rate of the u.s. economy. mark: benjamin, moving on to then, how do you balance structural headwinds with the enthusiasm for the nation? it's the disconnect between the top down on the bottom of. -- bottom up. i think you see real change in the way companies are governed and the way they deploy capital. you are seeing companies talking to returns on capital. you are seeing them spinning off for selling off divisions. the u.s. the things and european businesses have been doing for the last 20 years. to say if i'my looking at a business, if i'm paying a relatively rich valuation for a business, let's whereat around the bush, can i double my earnings? m

europe a less solid session. andet to the mliv team edits you on what is happening with the treasury market. it could be seen what is going on with the dollar as part of the ecb same as well as we work our way to word -- toward the ecb meeting. a lot to think about. the euro is the bulk of the index. the pound trading softer against the dollar. let's see what is happening in commodities. off, it was a windy night in the u.k., it is weather related. let's get a first word news update. juliette: china's economy has filled its first year acceleration since 2010. growth picked up six .9% from 6.7%. industrial production rose beating estimates but retail sales missed forecast and fixed asset investment climbed the least the century. sanders saidry trump will support the plan to temporary government funding ahead of the shutdown deadline. some cloutpaul ryan as he tries to bring a little -- reluctant conservatives on board. has republican leaders are pressing had with a plan to avoid a shut down by funding the governme

a spending spree in europe and the u.s. in europe he brought -- he bought a mobile company for 13 billion euros in cash. that business has been struggling. the full that were trying to -- the people that were tried to turn around this company decided to quit. drahi is trying to separate the businesses to create value for the u.s. before billion dollars in the u.s. over the past couple of years. he says that he does not want to stop there in the u.s. manus: he does not want to stop there. 242nd richest man. let's expand the conversation. this airbusng for deal. i really wish that it would happen. where are we on this? a lot of rhetoric but no deals, what is happening? >> we are going to have the details on all the commercial deals probably in about two hours from now. this is day two of macron in china. this is the day that most of these deals are expected to happen, as much as 50 commercial deals, according to the press. airbus could actually be offering china a production role , working onjumbo cabin interior. there is a c

i think we will see that also happen in europe, where in europe it has been a lot more depressed than in the u.s. we are seeing a bit of a bit of rising tide lift all boats and a mean reversion in europe will be a big deal, and that will be big for firms like lazard, evercore, and that is keeping us bullish on that group as well. vonnie: the idea that we have synchronized global growth and three fed rate hikes, maybe 4, maybe 2, this year, how will that impact banks from a morgan stanley to jpmorgan, given that goldman has had a tough year in commodities, and commodities look to be in a bullish cycle, too. devin: there are so many moving parts. interest rates moving higher should be a good thing, and hopefully one output of higher interest rates as you get volatility around the hikes, especially as the absolute level of interest rates is higher, that creates opportunities. i think hopefully that is a good thing for trading, but for businesses that are tied to net-interest income, goldman is making a push on the lending side. that benefits from higher interest rates. wealth management

europe is opening a little bit firmer. blackrock and ray dalia both warning against sitting on your cash. dalia says it's stupid to own cash in this environment. good for stocks, bad for bonds. too much savings on the sidelines. you are seeing these equity markets all add to their gains even though george soros is warning that the trump administration might be a danger to the world. the topplingredict stock market and went on to rally. we are on gdp watch. anna: let's look where we are on the asian equity session. coming back a little bit. we have the australian markets closed. a holiday there. getting a little bit of a celebrates reduced, perhaps. dollar weakness, of course, is the biggest story there. that's a we continue to see. the comments by president trump, a cacophony of comments. officials of the trump administration commenting and down most around the currency. it did plateau the dollar for a little bit of that has given way further downside and we are now down a half a percent. the other side of that, the euro i

europe has been a highlight over the last three to four quarters. geopolitical risks or something we need to watch very closely. we have been through many crisis over the last seven to eight years. we look back to europe and the debt crisis. we feel strong and good. ofthat is it for this best bloomberg markets middle east. we had a busy week ahead in the region including a big oil meeting taking place and oman and we will be right here for the start of the trading week in the gulf sunday morning on bloomberg television. you join me then. this is bloomberg. ♪ ♪ by"brilliant ideas, powered hyundai motors. ♪ ♪ ♪ narrator: im heung-soon is a south korean automaker -- filmmaker. his films are complex and dark and unsettling. often marginalized and overlooked, and his video work

let's bring you back to europe. let's look at the stock stories in europe. nejra cehic? nejra: one of the biggest gainers on the stoxx 600 is hugo boss with fourth quarter sales. morgan stanley commenting that the improvement in sales came as a positive surprise. limited availability on the 2018 order in t -- intake, u.s. remains strong. it is up 3.5%, hitting its highest since last year. roche down after the cfo said he sees pressure on profitability as the company loses some exclusivity on certain drugs. pressure, as is bp, taking a 1.7 billion dollar charge on the deepwater horizon closure. this is fullyys manageable within the existing financial framework, but still a loss on bp, down a little more than 1%. thanks for that. ahead of this weekend's first anniversary of donald trump presidency, republican leaders in washington are said to be weighing a stopgap spending bill extension to february 16. so the government doesn't have to stop -- shutdown at this time. they don't believe they have time to complete a fiscal year this friday'sby deadline. "the washington post"

the most important thing will be there combined vision for the future of europe. mark. has set the now, the big question is whether germany will support or delay. a lot hinges on that. mark: what do you expect as merkel and macron meet on friday to further discuss integration of the eurozone? how close to macron's vision is merkel likely to go? ftp -- sdpl, the wants to go a considerable distance toward macron's vision. macron left a lot of things open. therefore, this vision needs to be fleshed out. no have a french-germa alationship that develops european vision would be terribly important for the european project because it's not exactly clear where europe is going at present. vonnie: given how little agreement there is among the coalition partners, where does that leave the only opposition party? afd is not the only opposition party. there are others. that thehly unlikely afd will be calling the shots. it was a big warning to the two major parties. beelieve they will therefore a force that will help them agree in negotiations on a common line. they will certainly be

>> for the europe p.m. banking -- for the european banking sector, with this kind of growth, we should see the beginning of monetary policies, it is difficult for us to manage. growth is good for banks. it means good credit flows, and we are focusing on the end of the regulatory agenda. , the world isc fractured, but at the same time at the eurozone level, there is a project to further integrate. we have years that are slow sometimes maybe, but i am optimistic for us. --ncine: we may have less banks in the eurozone. this is something that will take time. 9 there is a lot to do. francine: when you look at your challenges are you speaking to u.s. authorities? nothing has changed fundamentally there. when you look at the challenges of european banking system, do you think consolidation will come when the regulators have an appetite for mergers? >> the whole framework means the bigger you are, the more complex, the more significant amount of capital you have to have. benefit of thee european banking union. the