tv Bloomberg Markets European Close Bloomberg March 31, 2017 11:00am-12:01pm EDT
vonnie: and i'm vonnie quinn. this is "bloomberg markets." nejra: we cannot take you from new york to london in the next hour, covering stories out of washington, johannesburg, and germany. here are the top stories we are following from around the world. in markets, european stocks are mixed. the stoxx 600 is on pace to end the quarter with a gain of more than 5%, with u.s. equities seemingly range bound. in europe, the next big breakout opportunity. is due president trump to find new executive orders on trade any moment now. ordersl these trade change the free trade playing field, if at all? how will the from factor and brexit impact global or -- global growth?
we could see big shift from central banks. let's have a look at where european equities are trading right now, just under 30 minutes to the close of equity trading for the day. the month, and the quarter. a little bit of weakness coming across some indices. .5%, switzerland lower. it's a bit of a mixed picture. it pushed european equities to the highest level in almost 16 months. we are on track for a third quarterly gain, the longest run of quarterly gains since 2014 the stoxx 600, up some 5% in the latest three-month period. the best march performance for the stoxx 600 since 2010. in the fx space, seeing sterling 125 against the dollar. the euro rebounding after a , 10699ay drop up .210%
at the moment. and then looking at the bond space, we are seeing not as much movement here as an fx and equities. still interesting to watch, but france's 10 year yield is up to basis points, despite the latest poll that shows support for marine le pen might be waning. really the most among stoxx 600 industry groups in march, up more than 5%. that pushed the volume of bullish contracts to levels never seen before. and the number of outstanding calls relative to puts has reached a two-year high. looking at energy stocks, because the oil and gas sector is the worst performing equity sector for the quarter, down more than 2.8% after being the second-best performer in the second half of last year. oil and gas stocks trading your the cheapest level to the broader benchmark since 2015. we've been talking a lot since
fitch sayingrand, it might review its rating on south africa. his rating in general being question a lot. he options traders are betting on more pain for south africa's rand. the currency suffer the worst weekly slump since 2016. one week implied volatility for the rand versus the dollar has soared for the highest since june. not seeing much moves in the major averages in the u.s., ending the quarter essentially in a way that is characterized the quarter -- not big swings in the major averages. that's happening with volatilities. out in this sputtering the postelection rally, not just for stocks, but for the dollar as well. we're looking at the chart of the two, the s&p 500 and blue, the dollar and white going back , looking at here the postelection period.
we saw the postelection rally and lift, and then this sideways movement. on the bottom we have correlation or lack thereof between the two. we saw strengthening of correlation between stocks in the dollar postelection, but that has been since weekend once again. week, 4.6% a strong here on these expectations are hopes that opec was going to extend production cuts as more of its members have talked about participating in that. we saw oil climb and little changed in today's session. --terms of a little individual movers, a mixed bag of reasons why. like we are coming out with earnings and the company surpassing its target of $640 million in software revenue for fiscal 2017. the company's progress in remaking itself is a software company appears to be bearing fruit.
mark marriott and hurts global global gettingz positive analyst comments. vonnie: we will talk with you in a few minutes. let's get back to politics and the topic of trade. president trump expected to order a comprehensive study to identify forms of trade abuse that contribute to u.s. deficit with foreign nations. kevin cirilli is standing by the washington bureau with the latest. we are anticipating two orders. what should we expect? kevin: president trump leveille executive orders in which he calls for a study to evaluate the united its relationship -- united states relationship with other countries on trade. he feels the various countries are taking advantage of the united states and not paying their fair share. this comes on the backdrop of his visit next week at mar-a-lago with chinese president xi jinping and they will again discuss trade
agreements. this has been a topic of discussion at the various conversations he has had with foreign leaders, such as germany's chancellor angela merkel. last night, he did tweet against china leaders, saying it was going to be difficult conversation on trade. vonnie: he's meeting with the national association of manufacturers right now. what, if anything concrete will we hear today, or will we have to wait for the 90 day review? kevin: earlier today i was speaking with some folks at the national association of manufacturers, who just put out their annual of for -- report, they run a 20 year record high, 93.3% confidence rating from an a.m. --nam. he will be meeting with president trump as well as ceos from manufacturing companies. they feel they will be able to work with this white house, and
the white house likes to take credit for that economic confidence. that meeting is happening right now the roosevelt room as we speak. we will have to wait and see their developments. plan --erence of tax comprehensive tax plan will come up. vonnie: the controversial border adjustments asked. i want to move on to one final thought, a separate issue. president donald trump also saying his former national security adviser, michael flynn, should seek immunity from prosecution. what is the latest, and does it tie-in to what's happening today and next week? kevin: president called this a political quote unquote witchhunt. and he called general flynn, who accompanied him virtually every step of the way on the campaign trail and during the transition, to call for immunity as first reported last night by the "wall street journal."
i spoke with a former advisor to the trump campaign, and call this a quote unquote bombshell. any time someone tries to seek political immunity, it does imply, right or wrong, a suspicion of guilt of sorts. this comes as the president of his white house is raising questions on national security from congress. controlledlican congress, that they continue to ask those questions, with seemingly indicate this could put the rest of president trump's legislative agenda at risk. vonnie: our thanks to kevin cirilli in washington dc bureau. brexit and trade, the european union telling theresa may she will have just a year to work on the sweeping trade deal she wants for britain. joining us from brussels is bloomberg's joan hayden. this, some warnings about that the u.s. would have to discuss withdrawal first before moving on to the free trade
deal. this has been formalized in this eu draft resolution. joe: yes, that's right. this puts in print with the eu leaders have been saying up till now, vis-à-vis the brexit talks and theresa may. nejra: we've also heard there won't be any bilateral talks with specific nations, which isn't much of a surprise, but also that there can't be talks with specific sectors, they came back to that issue of no cherry picking if you aren't in the single market. jones: these are two big issues for the eu, they want to have a unified front going into these talks, and they are trying very hard to maintain that. months, sincenine the brexit referendum, they have done a really good job -- against some people's expectations -- of maintaining that unity. e clock has
started taking, the two-year re, and thehe leverage switches to the eu side, they are able to control when the meetings are going to happen. vonnie: the first six months of the 18 months, it will take another six months at the end, but the first six months is going to be about eu citizens rights and the exit bill itself. it looks like the eu is really sweeping britain. jones: right. if you do the math, that's what you come up with. there's a very limited window for this sweeping trade deal that theresa may has said she would like to put in place, to have in place when britain leaves the eu. it doesn't look like that's going to happen. vonnie: we will have continue this another time, we have to fish out to the president, who is signing executive orders on trade, to launch a study to
identify so-called trade abuse. president trump: president and ceo jay timmons for being with us today. great job. my administration is working every day to make it easier for manufacturers to build, higher, and grow in america. , and grow in america. we are lifting burdens on american industry which have never been lifted before. we have done a lot of work over the last 60, 70 days. i think you are seeing some real production. i think we can say this, like never before. earlier this week, i signed an executive order to end the war atcoal, we had coal miners the office, it was an amazing scene. very strong, very powerful men, they were crying, actually. they were crying with happiness.
and produce more american energy and more american jobs, which is how i got elected in the first place. we created a task force of every agency to eliminate wasteful regulations. p.m., with the30 department of congress, wilbur ross will be here, we are signing two powerful executive orders. it will be very important, very special. i will be in commerce. we are here to announce the externa results of a new survey from the national association of manufacturers. 93% ofrvey shows that manufacturers now have a positive outlook on the future of their business in this country. 93%. and it was just a few months ago, 56%. that's a slight difference. [laughter] [applause]
a 20dent trump: that's year record high, the highest it's been in 20 years, and it's going higher. you come back next month. [laughter] president trump: i don't know how much higher it could go. i'm very proud of that. we're all very proud of that. and the manufacturers are starting to investigate money a lot of things that happening. it's a new surgeon optimism which is sweeping all across our land. they referred to our vote of confidence in our plan to ring back jobs, lower taxes, and provide a level playing field for our workers. the manufacturing companies represent, and represented here today are just an extraordinary group of people. they are leaders, they are brilliant in so many ways. the field has not been a little field, jobs have been leaving our country, going to china and mexico and lots of other places.
you will be seeing what's happening over the next few weeks. it should be very interesting for you to watch. the present china is coming to florida. we are having a big meeting and mar-a-lago, called the southern white house. it was originally built as the southern white house. it is sort of strange how i got there. it's going to be something i think very important, there is special. i looked very much forward to meeting him at the delegation. we will see what happens. i am very proud of what you have been able to do, just this little short period of time, the optimism is so high. i see the billions of dollars that are being invested by your people and your representatives in plants and equipment and jobs, and i appreciate that very much. you may want to say a few words. want to re-emphasize for the media here that this quarterly survey of our 14,000 members and going on for 20 years. to the point you made, this was
the highest level of optimism that manufacturers have expressed in 20 years. the other statistic i think you'll find interesting is the right track, wrong track question that manufacturers answered, just the right track number was only 26%. today, it's over 60%. that's a huge growth as well. of the focuscause on taxes, regulations, infrastructure investment. we appreciate your commitment to investment and job creation and manufacturing, and we are going to deliver. president trump: thank you. patricia, we like to say something? it's pretty outstanding, we went on. -- what you have done. >> i own a plastics we are aring company, three-year entrepreneurial startup and growth base with a
40 year legacy. it's great to be part of manufacturing in the u.s. president trump: you've done a really great job. ofi am president [indiscernible] with stainless steel and other alloys. tradespeople in the state of wisconsin, we are an escort and we would love to have you up in beaverdam, wisconsin. president trump: i love the state of wisconsin. there was a little bit of an upset. i thought we weren't going to do very well there, but people would consider that a slight upset. but we don't consider it. >> good to see you again. we enjoyed having you are facility in september. vonnie: you've been listening to president donald trump speaking on trade in the roosevelt room, saying he's working to ease the manufacturing regulations.
he's going to sign trade executive orders at 3:30 p.m., we are expecting. he talked about president xi jinping, he called a very important and said they would be happening in mar-a-lago, the southern white house. we also heard from jay timmons, the national association of thefacturers to talk about survey we site every month -- cite every month, that is the highest level in optimism in 20 years. more than 60% of manufacturers surveyed say that we are on the right track. some manufacturers also making comments. we will bring you more news that comes out of that meeting as it emerges. nejra: let's turn our focus now to the geopolitical risks for the global economy. joining us from newport beach, fromornia is mihir worah pimco. -- thanks foring
being on the show. it's been a big week, culminating with executive orders from donald trump on trade. we've had a number of said speakers speaking this week. i just want to know, big picture, how you are setting your asset allocation at the end of this week, the end of the month, the end of the quarter? has anything changed? mr. worah: our view hasn't changed a lot, which changed is we upgraded the view on global growth somewhat. but we reduced the risks around global growth. because in december, couple of months ago, there was a lot of uncertainty on what u.s. trade policy would be like. and what we are finding is that even with this new administration, there's not a lot of ad hoc policymaking. it's more measured than people were counting on in december. we've upgraded the views for growth, we've taken the volatility is down. in many markets are pricing perfection.
it's a bit of a nuanced positioning on how we are positioning our portfolios. we still like u.s. treasury's as a defensive position in portfolios, even though growth is going ok, we haven't changed our neutral outlook, that given demographics and lower productivity, given that overhang, long-term and short-term rates are likely to be lower than they have been in the past. in the bond world, as defensive positions, we like u.s. treasury street in particular, we like inflation protected securities because we think the market is pricing less than 2% year for the next 10 years, that's pretty cheap. in the equity space, it's the other way around. we find the u.s. market a little expensive and we are positioning in european and other markets. nejra: we've heard quite a bit today about this great rotation moving from u.s. equities to european. is that what you think, in which
sector specifically? banks have outperformed in march, for example. mr. worah: banks in europe have outperformed, but they still lagged. if you look at the last 12 months, they still lagged the banking sector outperformed as we saw in the u.s. we like european equities as a whole. the valuations are cheaper than the u.s., but it's not just about valuations. valuations were cheaper a year ago, but we are seeing cyclical momentum that we saw in the united, earnings are starting to grow, inflation is coming back, and the ecb is still running using monetary policy. we see room for u.s. equities to outperform -- european equities outperform u.s. equities. vonnie: you seem to pull back your assessment of risks, including things like protectionism and the risk of a full-blown trade war, he said at a reduced. he's a risk of a china accident is reduced. what might be a catalyst for any of those risks becoming greater
again? oliver: there are a number of risks. a full-blown trade war, we've seen the right appointments in the white house, and in particular, trade is one of the things that the president and the white house can act unilaterally on. health care reform, the need congress. was all that happened with that. tax reform in congress, and that will progress slowly. trade decisions, these can be changed by the president. and we haven't seen that happening. based on that, our expectation for trade wars or trade mistakes has gone down. we expect incremental changes in trade policies. we expect reviews. we don't expect an outright trade war. vonnie: what about the federal reserve and what it's supposed to do? if that's the case, you say we will get incremental change. will we get incremental fiscal stimulus? mr. worah: we expect incremental
fiscal stability -- stimulus, less than the market was pricing. our expectation are about $1 trillion of physical stimulus, about $100 billion per year. this compares to the ryan plan, which calls for $2.5 trillion, with the president when he was on the campaign trail calling for $5 trillion for stimulus to we expect about $1 trillion. still expect fiscal stimulus, but less than what you hear about. nejra: we heard from the st. louis fed president in this program, and he is on the dovish side of the committee. he did say we can wait and see what happens next on fiscal policy. goal, ithe fed hit its delivered. he didn't seem to show any fear that the fed might be behind the curve. i got the 10 year treasury yield here, you can see is following this trend failing for another quarter to reverse its course. you were seeing u.s. bonds remain the most attractive.
does this mean that you, like james bullard, don't have faith that inflation is going to be sticky? mr. worah: we think inflation will stay around 2% for this year. it clearly came up three at the end of 2015, inflation was around 0%. with the rebound in oil prices and with wages starting to grow, with the inflation around 2%. we think it stays here for the next year. in the future, going forward, we see risks biased towards high inflation. which is why even when we buy u.s.'s, we have a tendency to buy inflation protected securities. inflation is in going anywhere for the next year, but longer-term, whether it's tariffs or visitor stimulus -- fiscal stimulus, at a time when the u.s. economy is running at 4.7 percent economic on -- unemployed, near-term in the next year, there's not a lot of inflation risk. nejra: what about for europe?
we did get eurozone inflation data on the softer side. what does that mean for the ecb and european bonds? mr. worah: we think the ecb continues buying bonds at around 60 billion euros a month, like they have. we think they start tapering sometime next year. they need to get inflation higher. is closed with inflation target, which is why it's starting to hike rates at a measured pace. we think the ecb as far away from hiking rates and should continue to run its policy of negative and lower negative rates and bond purchases of qe for the next six to eight months as it tries to get inflation up, which is why we think the european bonds are rich, but we see value in european equities trade -- european equities. vonnie: what about emerging markets? how much should you allocate to emerging markets? we had several as the managers saying that there is much more room to go. mr. worah: emerging markets
depend on a couple of things. it depends on what the fed is doing, the fed is raising rates in a measured fashion. and it depends on what the commodity cycle is doing. we think the commodity correction is pretty much behind us. supply and demand is well-balanced. we think it's ok to venture into the emerging markets, where evaluations are cheap. one of the ways we are investing in emerging markets of pimco is, given the fact that commodity valuations are stabilized, we would like to take advantage of that by investing in some of the higher kerry commodity currencies, if you will. the mexican peso, the brazilian reality, the russian ruble. we will continue to do well in a world where commodities are stabilized and the fed is measured. worah,thanks to mihir with pimco, joining us from newport beach, california. let's take a look at where european markets are trading as we head towards the close.
" her and of the month. the stoxx 600 up .2%, it was a little lower, seeing some weakness in the ftse 100 off by .3%. the dax is higher. we are on track for the best march since 2010 for european equities. take a look at what happening in the fx market. up .4%. that .4% -- we are keeping an eye on south africa's currency, 30, 40 on the rand. 10 year yield and the u.k. up up basis point and the rand two basis points. this is bloomberg. ♪
day, the quarter, and the month in european trading. with yourross asset jim n function, you can see a little bit of a mixed picture on specific equity hash marks. the ftse of by 4/10 of a percent. we are seeing the stoxx 600 gaining today. it was sputtering a little earlier, the european stocks gaining not just for today, but also heading for their best march performance since 2010. and also a third quarterly gain, the longest run of quarterly gains since 2014. european equities close to the highest level in 16 months. in the fx space, sterling up .4%, 125 .23. we got the u.k. gdp data earlier and some of the strength action coming from the weaker sterling we had sense brexit. sterling up now, euro up .2%, rebounding from three days of losses. 06.93 and we107, 1
are seeing upward pressure on the front end of france at 10 year yield up to basis points as well. rallying thebanks, most among stoxx 600 industry groups in march, up more than 5%, which push the volume of bullish contract on the euro index to levels never seen before in the number of outstanding calls relative let's reached a two-year high. i about the energy sector as well. worst equity sector so far this year. down more than 2.8% after being the second-best performer in the second half of last year. analysts have been upgrading their recommendations and are the most bullish in their outlook in 19 months. this could be partly to do with the outlook for the oil price, but also, oil and gas stocks trading really cheap relative to the broader benchmark. the stoxx 600 for the quarter,
we are up 75% over this quarter -- this is the year to date. up .2%. vonnie: you mentioned energy, we are seeing wti above $50 a barrel. the fiscal year-end as well, that's why i'm taking a look at the end -- at the yen. a little bit of treasury buying after the federal reserve comments from a few fed president's today including jim bullard of st. louis fed. seeing the two-year down. the two cents spread is down the wire. , you might be ashamed have a lot of the other movers. the nikkei is down 20%, in today's session, which is completed and now the russian ruble finishing the quarter below 57. the mexican peso stronger as well under 19, although even
back some of that strength. if you take a look at bonds, look at the south african space, we are seeing a lot of movement with all of the political instability of happening in south africa. let's get abigail doolittle with a look at how various assets have performed for the quarter. looked at a nice rally for u.s. stocks in the first quarter of this year. on the last the of trading, not a lot of action. look at the quarterly performance for major averages in the u.s. both the dow and the s&p 500 are on pace for the sixth of quarter in a row. the dow, the longest quarterly winning streak since december 26 -- december 2006. the outperformance for the nasdaq off about 10% in the quarter. underperformance from the small-cap russell 2000. but have a look at this in the bloomberg by taking a look at g #btv 7344, in white, the six of
quarters for the s&p 500, in blue, the outperformance for the nasdaq. look at the russell 2000, the smallest game going all the way back to june of 2015. driving outperformance for the tech heavy nasdaq not surprisingly are some of the big tech names, including apple, amazon, facebook, and microsoft. look at these games. apple up 24% over excitement with the upcoming iphone eight super cycle. facebook trading higher by 24%, solid december quarter. was downter, facebook about 10%, the worst quarter from 2012, so a bit of a rebound. let's hop back into the bloomberg and take a look at g #btv 7346. apple at 24%, 25% performance in the first quarter of this year is the best since 2012. look at this, a lack of performance for apple.
in point to be made here, 2012, apple climbed nearly 50% on the quarter, but rounded down into a pretty big correction. we've seen other areas of rounding down, it will be interesting to see whether or not apple can hold on to these huge quarterly gains. nejra: thanks so much, abigail. it's been was saying, a bumper quarter for stocks, but can momentum continuing to q2? it isg us is said varma, great a have you. we've been talking about the great rotation from the u.s. to europe. g #btv 7334. the stoxx 600 surpassing the s&p 500 for the first time since the u.s. election in u.s. dollars terms. the indices are pretty much that in the as the trump trade has perhaps deflated a little bit this month. you have been talking to a lot of analysts strategist taking down the chart.
this rotation into europe, is it going to continue? sid: it feels that way, if you believe strategist. they increased their targets for earnings, by the same time, european equities benefit from base effect. that is to say, whether investors are really that bullish on u.s. stocks relative to the us. the u.s. is looking pretty pricey, and over the past week, we've seen inflows into european equity funds increase perhaps to the highest they've been for over a year. and before that, we've seen a lot of investors with a lot of dry powder very much reluctant to increase their allocations to european equities. it looks like it's a thing that could run because strategists have just turned bullish in the last month or so. but investors seem to now be waking up to the wealthy valuation story. point $5 billion of
inflows into european equities in the past week versus outflows from the u.s. i'm wondering is that supported by the fundamentals in terms of economics performance in europe? we have euros on inflation data just today coming in a little week, and perhaps supporting those ideas that the ecb shouldn't be tapering quite yet. sid: that's the big question. there's been a lot of earnings disappointment over the past couple of years and a lot of analysts have said the time now is for european stocks, they've really been caught out by relentless political volatility as well as economic volatility. ,n a year on year basis inflation has risen, but on a cyclical month-to-month basis, the base effect for commodity ande inflation has he used therefore, the really is a? mark about whether the ecb will moderate much further in cases of monthly asset
purchases. nejra: continue. sid: in general, we've seen investors turning more bullish on the outlook for price and on spare investment. at the same time, eurozone disinflationary fares haven't gone away. vonnie: with all of these inflows into europe, is there a danger if something does come to pass, whether it's political risk that emerges or another kind of risk, is there a danger of rapid outflows? sid: there certainly is. we saw that in 2016. i think a lot of strategists are relatively bullish the baseline projection is the french political risk. was on the dutch election, that was seen as a bellwether for the prospects of populist parties.
, we've seeny stability in that sense. there's always that risk, but thanks to base effect, the fact that investors are pretty confident for corporate earnings that haven't actually put that much money to work thus far, relative to the counters they have. that is a supportive environment. if there is a step back from risk appetites, thanks to base asects, it might not be strong in terms of reversal compared to last year. nejra: i want to ask you briefly about russia. we got growth data earlier i know that in the past, you've spoken to the central bank governor, as i have myself. i just want to show you this chart, the diverging trended of russian stocks sinking this year, where is the and equities in general have posted the biggest rally since 2012. in that space, with catching her
tension terms of where this rally is going to go? sid: the rest of story is not necessarily about talks. if you're bullish on russia, you buy the currency, you buy the debt obligations. we see a lot of investors be very bullish on russian stocks. on russian debt. verma, thank you very. vonnie: courtney donohoe is here. courtney: the president wants to of tradeevery form abuse that contributes to u.s. deficits with other countries. the other order aimed at strengthening the collection of duties for trade penalties. secretary james mattis says russia has been violating international law and quote mucking around in other people's election.
mattis says the u.s. should not expect much cooperation from russia. >> we look to engaging with russia on a political or diplomatic level, the right now, russia is choosing to be a strategic competitor, and we are finding them can only have very modest expectations at this point of areas that we can cooperate with russia. courtney: british defense mr. michael balance is because of interference, the u.s. cannot return to business as usual with the country. in south africa, the prime minister met with his successor to ensure a smooth handover. fired him.acob zuma the other people could lead to a political revolts, against the president, who has been interviewed in a number of scandals. korea, the ousted president's new home is a jail
cell, where she sleeps on a mattress on the floor. she has been arrested in a corruption scandal, and prosecutors have to decide whether to indict her. suspectedect just -- of pressuring executive to donate money for exchange for government favors. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm courtney donohoe, this is bloomberg. vonnie: courtney, thanks. ayres associates david harold looks at how bad germany's banks are for the rest of the world. this is bloomberg. ♪
nejra cehic. the prospective on europe's biggest banks as they continue to be a concern for investors. earlier, bloomberg "surveillance," sat down with , who suggested germany is just about the world. >> if i look around the world, a where we see the most opportunity and an asset class, it's probably european financial . >> you were the first one to tell me that this is the noise we're hearing. click settings and animal meeting coming up in a few weeks and i think they want to have all this ready to go by the annual meeting. look at theou capital position, and you look at what they are able to generate on a year-to-year basis, and you look at how good they have been it running down that strategic asset unit, which
ists money, it's tight, but believe they can do without it. it's tight. do you want to be tighter have breathing room? that's for them to decide. but i think raising capital must be something that's done after a lot of careful thought. the last five or six years. they haven't had big capital increases like some of the other banks. i think they had a very good idea of avoiding capital raised by i feeling part of this was universal bank. i was a great idea when it was a belief with rmbs fine unknown -- [no audio]
or for that matter, the united states to overbank. >> there is a will amongst the industry to do this. but the regulator wants as much competition as possible. it's a fine line. if you have too much regulation, it hits profitability. if you have too much profitability -- competition, it hits profitability. you need profitability with for banks to be healthy and happy. rails you have to stay in between. and --ink both in europe not of the u.k., but most in europe and in the united states, there could be confounded patience and banking.
>> should deutsche bank ipo the asset management unit? >> we spoke about this earlier. deutsche bank is a problem, not looking at ipo's and assets come is the whole home market. germany is really a lousy banking market. there's a perfect example of a market that needs consolidation. banks that exists not to make money, but they ruin the market for those banks which need to make money by taking deposits and lending. that's the biggest problem. deutsche bank is the biggest bank in germany, but it's the worst banking market in the world just about. herro, that was david harris associate cio of international equity. lot abouten talking a banks this week and the opportunities in european banks, and banks rallying the most out of stoxx 600 groups in march. vonnie: if we could predict things -- you know the end of that sentence. at the biggest
business stories in the news right now. dan is making concessions to win approval of its acquisition of white ways food. agreed thatompany they will sell the organic yogurt brand. they say that will allow white wave and the deal to close shortly. dow chemical and dupont pushed back the deadline for the $79 billion merger again. the chemicals maker to try to get antitrust approval in europe by striking a $1.6 billion deal with pesticide maker fmc. they are selling assets to fmc. down dupont say their merger will now close in august, that did click -- it was set to close in 2016. hong kong has been one of the hottest markets for electric cars. electric vehicles have been accepted for a tax on new cars. that ends tomorrow.
the rise of the tesla by at least 50%. latest louvered business flash. coming up on "bloomberg markets," we speak with commerce secretary wilbur ross about president trump's plan to sign two executive orders on trade. that's right here on bloomberg. nejra: we are expecting that signing to come at 3:30 p.m. eastern. coming up, the first be otc report is export uncertainty. this is bloomberg. ♪
we start with you, in london, christine. christine: for my chart, i'm oregon, washington, north and south carolina. these the states that are in the final four in the march madness competition. i'm going to take you through the cost of exports for these four states, which have risen for the highest in 10 years. that's a running trend between these four states, on the opposite ends of the country. it's a trend is running for all four of them. i measured the trade weighted cost of the u.s. dollar against the currencies of countries that these four states trade against. i made these custom indexes using bloomberg's cix i function. the key take away from the u.s. economy, given that this is a trend, a high cost of exports using the trade weighted dollar for all four states, it's no wonder that the u.s. trade
balance has been in deficit the entire time. as you can see here at the bottom panel, the trade deficit is at the highest in five years. that's probably why we've seen the deficit throughout these 10 years. it's because of the high u.s. dollar cost for these four states. if you want to check out this chart, go to g #btv 7358. vonnie: that's cute an excellent on so many levels. a wonderful chart. >> i'm resurrecting an oldie but a goodie. vix a long-term chart, the or the fear gauge. in white, the s&p 500. over the long term, we see them been big divergences that have been reimbursed with the s&p 500 falling as volatility has absolutely spikes. it happened into the financial crisis. right now, we are looking at a huge divergence, the biggest and longest on record, one point to be made, this is a normalized.
we can see the relationships over the past. the twist is the economic policy uncertainty index. we see that it's at all-time highs, up there with the s&p 500. but typically in the past, a track to the next. is not-world uncertainty low. complacency and calm that everyone has been talking about around the vix and stocks trading action really is not seen in the real world. it is quite a bit of concern out there. suggesting that perhaps when we do see a reemergence, it could make for quite a spectacular trading action scenario to see. on the see my chart bloomberg energy #btv 7352. that, itigail, i love tells me that recidivism is not always something we have to question, we are question everything we are told that everything we see. vonnie: i'm going to give the crown to christine pitino -- khristine akino.
nejra: you've put me in a difficult position, because i'm going to go for kristine as well. the work that staunton to the complexity of that chart and its relevance on a day that we been talking trade is fantastic. abigail, great chart. nejra: thanks to you both. we are into the final finals. coming up on "bloomberg markets," we are speaking with the u.s. commerce secretary wilbur ross. the president will sign orders at 3:30 p.m. eastern. you don't want to miss this interview at 12:30 p.m. eastern. this is bloomberg. ♪
>> from new york city worldwide, i'm jonathan with 30 minutes dedicated to fixed income. his is "bloomberg real yield." coming up, the president is poised to right executive orders on trade with protection yeet to materialize why the consensus happened. and corporate issues toward a record quarter as they try to secure financing. and the fed says the stage. we look ahead to the big event next week. we start, then, with