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tv   Bloomberg Markets European Close  Bloomberg  January 10, 2018 11:00am-12:00pm EST

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close" for bloomberg markets. ♪ here are some of the stories we're covering. amids and bonds falling words that china may halt its purchases of the u.s. treasury. -- what is mario draghi's next move? you hawks are increasing their calls to pull back on stimulus. this could be the crucial year for president trump's trade policies, with a key decision on nafta. how it could impact the markets. have a look at what is happening with european equities, we are 30 minutes away from the end of the wednesday session. stocks are falling for the first day in six, the best run since
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november 1. we rose to the august 2015 high yesterday. the dax index lifted to its best start of the year since 2003. strategists still predict the by, which is down today .38%, will climb by another .43% this year. this is another function, i am just showing off. telecom italia considering cutting about 10,000 jobs in italy, 14% of the total workforce to make the former monopoly more profitable and efficient. telecom italia needs to increase investment to speed up its network as revenue shrinks, because of the competition. call 30 lossays does company lost jobs -- company lost jobs and percentage
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changes from stories announcing cuts. the bottom line shows how the stocks reacted to the announcement of the job cuts. .oss go is the function let's talk about credit default swaps. 5810, the cost to buy protection for investment grade bonds in north america, europe, and asia, falling to a decade low amid better optimism of better taxes and broadening economic recovery. the prospect of rating upgrades are outweighing downgrades this year. credit quality may weaken beyond that as central banks phaseout ultra supportive monetary policies, according to fitch. these are credit default swap gauges for north america, europe, and japan. white, blue, and yellow in reverse order.
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i just want to finish with emerging markets, 5214 is the chart number. dollar bonds have not been this hot since the global financial crisis. the world's biggest traded publicly hedge fund -- the emerging market, bond market has gone far. the premium on such notes is roughly 200 basis points come basislowest level -- points, the lowest level since 2005. investors are plunging into riskier assets, pushing valuations of emerging market bonds to levels that no longer make sense, according to man group. let's get to what is happening in the u.s. how is it looking? abigail: we are seeing something we have not yet seen in 2018, declines. the major averages all down. on pace for their first decline of the year.
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the worst day since the last day of 2017, but the declines are moderating. yesterday we had the dow and s&p 500 about 5/10 of 1%. semiconductoria index down 1.6% for a second day, it's worst stretch since the beginning of december. the direction of the market today may lay in the hands of apple. let's look at an intraday chart of apple and we will see that shares are lower, down about 3/10 of 1%. at session lows of three quarters of 1% on a bearish report from china saying they have lowered their overall mobilephone shipments in china by 12% for 2017 and 2018. the shares of apple are lower and the supplies are lower, suggesting there could be some concern that will bleed through into the numbers, perhaps even for apple's december quarter,
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but investors are not as worried as they were during the premarket. if apple can come off the load, perhaps the overall market well too. market, of the overall if we take a look in the bloomberg, this is 2993. do note a prize of anyone, the first decline we have seen over the last several d -- years back in 2008, all in returns. last years of gains, a very good year for the s&p 500. jeff gundlach is saying he believes we could in 2018 see a decline for the s&p 500 after a pretty good run in the first half. he is saying he thinks people think it is safe and it is just the opposite. the complacency we have been seeing, he thinks we could see a reversal. a quick look at the homebuilders, little bit of a drag.
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that is dragging more on the entire sector. mark: thank you very much. the ecb, because the european central bank is due to release minutes. the market will be looking for any signs of dissent on former guidance as hawks take the lead on the qe debate. alessandro, are the hawks in the ascendance? >> for sure, they are dominating the conversation. they are being much more loud, talking much more and trying to steer, because the state of the european market is very strong there is little signs inflation it is nog up, but
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longer a situation that requires strong monetary support, so they hope to see the end of qe i the end of the year. the doves have been keeping silent but that does not mean they are in the minority. mark: we have a wonderful chart showing the doves versus the hawks. this is a spectacular chart making it clear. what is the balance? is draghi losing his majority? alessandro: the way you look at the chart, this is just the main failures come of the most influential and vocal councilmembers. there are 25 people in the governing council of the ecb, six members of the executive board in 19 heads of the central banks. most of those keep a low profile, do not talk to the media, especially the international media, but they are a silent, solid majority for draghi and his policies. when and if he changes course, he will have their backing.
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i do not think there is a balance yet between hawks and doves in the governing council. vonnie: what happens now that we are meeting capital keys, meeting the location -- in terms of ecb bond purchases? alessandro: can you repeat that? vonnie: we are meeting and have met in some cases the limits and ecb bond purchases when it comes to the p. is it -- comes to the capital key. is it something that will allow mario draghi to be a little creative? alessandro: the capital key is a hard limit, a legal limit so the ecb cannot exceed this percentage and the debts of the euro area countries. in the case of some countries like portugal and germany, it is getting close to that limit. there is a limited buying space for the euro area left.
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it should be enough to deliver on the current commitment to buy 30 billion euros of bonds until just -- september. if there has to be a major expansion, it means that draghi and his colleagues must get word of and expand the assets they are buying, etf's, equities, could be anything. this would require a strong crisis which the euro area economy is in strong shape so it does not look like that now. sandro, thank you. let's check in on the first word news. or a dennis: is here. courtney: the white house called the federal judge's decision outrageous. he temporarily plucked -- blocked trump's decision to scrap daca. it would protect hundreds of thousands of immigrants facing deportation, and it came just hours after the president said he was willing to negotiate a deal that would provide millions
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of undocumented immigrants a path to citizenship. in china, they are reviewing foreign's exchange -- foreign-exchange holdings and believe therities market for u.s. government bonds is less attractive relative to other assets. china is the world's largest on holder of treasuries. level of reduce the cooperation with the united nations nuclear watchdog if the u.s. fails to extend sanction waivers by mid-january deadlines. president trump certified the deal and is planning to announce whether he will reimpose penalties against iran. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am courtney donohoe. this is bloomberg. mark: thank you very much. coming up, morgan stanley's chief u.s. policy -- policy strategist says 2018 is a make or break year for u.s. treasury
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policy. this is bloomberg. ♪
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vonnie: breaking news, ford is down 1.25% and dropping. according to a lawsuit, it rigged half a million heavy-duty trucks to beat emissions. this is a lawsuit that says pickups are and 350 stealing emissions, as much as 50 times the legal limit of nitrogen, oxygen pollutants. it's get straight to craig trudell in detroit for the details.
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what is the context when it comes to the volkswagen scandal or other scandals? how big is this? craig: the lawsuit is being filed by a group that has also represented owners of fiat chrysler and gm pickups. there has been an attempt to paint other automakers with the volkswagen brush in sort of an implication that everybody is doing it. in the wake of volkswagen's diesel scandal that erupted in september 2015, the key here is that emissions standards are very technical, and there are loopholes or an ability for carmakers to build their engines to exceed diesel emissions limits in certain situations, like when your engine is going to fail unless the emissions are allowed to go out into the air. it is a highly technical distinction between whether or deceit device as
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volkswagen admitted to almost a year and a half ago. that is really going to be what this comes down to, the devil being in the details and importantly, whether the epa shares this conclusion that this lawsuit comes to. vonnie: shares are down now about one half of 1% and have come down a little from their lows. this is a lawyer suggesting the cleanest super diesel ever trucks were actually super dirty. is there any way to prove this until it goes through the court? craig: it is definitely going to be something -- we will hear from ford soon, what their side is. i think it is something that is very difficult to get to the bottom of, and it is sort of in the eye of the beholder. you do have a situation where the epa was sort of caught asleep at the switch when volkswagen emerged, and really
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in the time after that, has really taken a closer look at diesel. zimbabwe, that includes ford. enough, theess importance of whether or not the epa finds that there is something wrong with four diesel, that will be the key as opposed to this owner lawsuit, because this could be a case of a plaintiff's attorney seeing the dollar signs that emerge from the volkswagen scandal and trying to replicate that. mark: do we know the role of the german auto supply robert bosch in masking the vehicles' inefficiencies? craig: the lawsuit mentions bosch. it mentions volkswagen more than 100 times, so it is very clear there is an attempt to sort of similarities between the volkswagen scandal and bosch's involvement. bosch is also a supplier that
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was involved in diesel engines for other carmakers that make the software that sort of allows for whether or not the emissions of these engines are sort of tweaked in order to avoid engine failures. notimportance is whether or the actual use of that software was illegal as opposed to bosch doing something wrong here. that has consistently been their stance. vonnie: thanks to greg trudell. i want to mention that we are out to ford for comment. nothing as of yet, although other carmakers have taken on accusationsks against them. we will bring you the response as soon as we get it. time for a bloomberg exclusive. jpmorgan health care conference in georgia, the biggest competition from the cds at no
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merger. is quiterategy -- focused. we expect the dynamic -- environment to be dynamic. competitive change, technological change, so we need to be a country that thrives in a dynamic environment. our positioning is a customer centric position to focus on partnering with health care professionals and focuses on expanding choice and integration and innovation. we will continue on that strategy and continue partnering with health care professionals. erik: people want to know is there any argument that can be made that cigna and express scripts would be better off together? >> we own and operate our bbm today. erik: it is small? >> it is targeted. it contributes to the fact that we deliver industry's best medical -- in the past five
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years. we continue to look to expand the portfolio over time but we like our positioning today. erik: independent of what you may or may not do with regard to another pbm, is vertical integration in health care in delivering management payment the future? >> i don't know. clearly, it is being discussed a lot. our view is at a minimum, virtual vertical integration is necessary. enabling the suppliers and intermediaries to be more aligned toward joint value creation for patients and individuals, that is what we have been about. we have 500 collaborative accounts in the united states. they are with multi-specialty groups and integrated hospitals. we work with them with line incentives, sharing information and care coordination resources.
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we like that model a lot. putting the customer front and center, driving innovation, and doing it virtually by trying to get the best of both organizations through alignment. that is a winning proposition. erik: you have been willing to contemplate and actually pursue a transformative merger in the past with and some until the government block -- anthem until the government blocked it. you to go downe that road conceptually? david: it goes back to a framework -- does a potential opportunity create the ability to accelerate value creation for it forket, differentiate better value for your clients, and as a result, deliver differentiated value for your shareholders. before the anthem deal was announced -- over the last six
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years we have delivered over 30% compound. double-digit topline and bottom line, but you have to be open to innovating, changing, evolving your corporation to ensure you are able to go forward, as we are able to lay compelling guidance for 2018 for our company. we will grow our revenue significantly, our earnings-per-share, and invest meaningful he back in the company. -- meaningfully back in the company. erik: you are still in litigation with anthem? david: yes. erik: how long will that take? comment ono not pending litigation. we are a strong company. unprecedented leverage on our balance sheet and a well performing business that actually delivered in excess of 25% eps growth in 2017, off the back of the broken transaction.
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membership growth in the united states and outside, and report about three quarters of a billion back into trade. erik: it did not feel like you lost a step? david: we are blessed with 40,000 -- 43,000 colleagues who stay focused every day to try to drive forward. we are fortunate to have that opportunity to change people's lives and help them. we have 95 million customer relationships around the world, so our team blew me away with their level of focus through all these distractions. erik: it is clear from what you say, you are always contemplating an opportunity. how much of a strategic comparative is m&a today? david: it has always been one of our three priorities for capital deployment. given that we have so much capital, we have enough to serve the internal needs of the ,ompany to grow and innovate which pushes us to strategic m&a
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or returning it to our shareholders. we brought back to $.3 billion of our stock through the third quarter of last year. there is side priorities that we will do just be disciplined with. cigna's ceo is speaking with erik schatzker on u.s. health care policy. sticking with u.s. policy, president trump is planning to attend the world economic forum in dallas later this month, and according to a treasury official, he will descend his america first position. our next guest says it will be a make or break year for u.s. policy and maybe this will change things. michael zezas joins us now. what will come out of davos? lawmakers will go, he is not a davos man. he is the opposite. what will he tell people?
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michael: it is unclear exactly what he will say. to me, the bigger story is not the attention that douglas is putting on the trade issue, but what is actually happening in the next few weeks. there are some key deadlines coming up, and may be of his language in davos will speak to this directly. there are deadlines as to whether the administration will put tariffs on washing machines and solar panels. whether they will pursue tariffs on steel and aluminum, decisions around those points will tell whether this administration is serious. find out forill real if the country is being pointed more in that direction. there is obvious knock on effects or potential reactions for what that means for the nafta negotiations further down the line. we are moving from the hypothetical to the actual.
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vonnie: what are the ramifications if the president slaps a bunch of tariffs on things, or the u.s. slaps a bunch of tariffs on things? michael: it is tough to know into we see those actions come to fruition. one trade action in and of itself does not necessarily mean the u.s. is adopting wholeheartedly a more protectionist decision. the bush administration did temporary tariffs on steel in the early 2000's, but this is potentially an important signaling mechanism, one potential shock absorber in the markets would be the relationship between the dollar and peso. people might perceive a more protectionist position means they will take a harder line on the nafta negotiations. that market pairing with the shop of sorg are into -- absorber -- shock absorber in 2015, and of course we will be looking carefully in the next few weeks when other shop
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absorbers there might be. investors need to be watching aside from trade and legislative? do you see any other legislation coming down the pike that might have major implications? michael: i think we should pay attention to the infrastructure proposal supposedly coming from the administration, because that is a question of whether or not we will extend fiscal stimulus but on the table from tax reform and keep it going with a big infrastructure spend. in our view, you have to study that carefully and we have very low expectations. the efficacy of that policy from a political standpoint is questionable. we do not think there is a clear bipartisan path to passing and infrastructure package. we will have to see what that proposal says, based upon what they are putting together. package, a $1 trillion it is a $200 billion package
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that is supposed to be matched by partners with heavy conditions. it is not clear whether those conditions restrict the partners for taking up that money. that this is either politically viable or effectively a stimulus. we do not know enough yet. we tell investors not to get worried about it, but in the next couple of months it might be a more serious fiscal pull to take seriously, and it needs to be put in the context of the midterm elections. you: i was going to ask about that, to what extent are the midterms a policy or market catalyst? theael: for us, obviously democrats could take control of one or two chambers or republicans can hold serve. if the republicans hold and serve, it is the same dynamic on infrastructure from our policy -- from our perspective. the policy they are pursuing, we
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have some questions about whether that would be a real neil turned stimulus to the economy. if the democrats win, you're likely outcome is gridlock, but at least some path toward fiscal policy. there is some scenario where the president in the interest of getting something done on infrastructure, might proceed to the more traditional infrastructure policy the -- recallingn't four. industries, what sector do you anticipate will have the most impact? we are seeing it in treasuries virtually following the china move. michael: the bond market is of the opinion of our rate strategy team, more not necessarily reacting to fiscal issues but to some overseas issues, china, japan, said inflation targeting. -- said inflation targeting. inflation targeting.
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should infrastructure policy over there serious course of the year, you would expect treasury markets to react. there is definitely a sector story particularly around industrials who are generally the beneficiary of those dollars. vonnie: the corollary of that, if the infrastructure package does not happen, do these sectors take a hit? michael: i can only speak anecdotally in terms of the client conversations we have. expectations are appropriately low. vonnie: appropriately low expectations. michael zezas at morgan stanley, thank you. mark: guess what time it is? just about 4:30 in london, finishing up the european trading. stocks lower today. four industry groups rising.
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banks and insurers benefit from those moves. most of the other sectors falling on the stoxx 600. yesterday -- this is the bond market, where we are seeing a lot of focus today. the german ten-year yield rising to the highest level since july 2017 following rises in yields across the globe. the european central bank entering 2018, the debate over its stimulus plan has been dominated by policy members warning against keeping policy ultra-loose for too long. half the members on the executive board appear to be reluctant to extend qe again. -- one of thetory big movers on european equities is the u.k. supermarket retailer , raising its profit guidance as the integration of housewares
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advanced more quickly than expected, all sterling its solid christmas. the --ing a run of relatively strong run of the grocers. warnings issued profit a midweek christmas sales. core business providing further evidence that british shoppers were willing to swallow rising food prices over christmas. finishing up with tall low oil, raising expectations to free cash flow in 2018. ,his is the year to date chart up 7% so far. it is an africa focused explorer , expecting to report $500 million of cash in its four-year results on february 7. productionrong performance, rigorous cost discipline, and a rising oil price you will not forget.
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crowley -- crude rallied by 18% last year, marking its second annual gain as opec and its crawlies -- allies raised production. how is it looking over there? vonnie: yesterday when i said we had broken to 50 on the 10 year, that brought to 60 into the range, all it took was a comment from an official to bloomberg in china saying that china was considering maybe slowing or holding some purchases of treasuries. that did set the market activity and we are seeing the 10 year at at 60 and 2-10 spreads basis points. we had another straight week of a drawdown for inventories. oil have been higher even before the inventories data that came out, and it is taking another cents of the leg higher now.
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kit juckes pointing out that it is intriguing this rise in yields for the u.s. and across the world is not doing anything for the u.s. dollar. i chose the yen as a way of showing that. the yen is true -- trading at 111.45, down 1%. mark: bracing for the end of the three decade on bull market, with phil gross saying they have entered a -- >> we have gone short bonds, not just treasuries but short gilts and bunds. .eft the jgb market alone it appears the treasury phenomena and treasury based on your bloomberg report with china being disaffected with u.s. treasury's, and your report a day or two ago about jgb's and their change in quantitative easing policy. issuingff gundlach also
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a dire bond warning. marcus ashworth has it all covered and he joins us now. hold your horses. it might well be. it is a downward line, the trendline. on forere to carry us another two years, it would be 3% so it has to break at some time. the yields have gone too high on this last year. until that breaks, we are close to that on the 10 year yield, let's not get to ahead of ourselves. mark: we should be focused on the 30 and the curve as opposed to one part of the curve. how basically long-term bond yields have not done anything in the last year or two. there is not any inflation of any major sense while the fed has been hiking rates.
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normally that would be a recessionary call. it is equities versus bonds. it seems that bonds are breaking and equities will win, but the reality is we have to be a little more careful. we have a lot of supply the next few days. all around the world, we have a lot of government supply. do, is what bond traders run it down to the auction, get the bids as low as they can, they have their shorts, and backup they go. i would like to see the close on friday, if it is a new weekly low i will start agreeing with jeff and bill. mark: let's talk china. marcus: yes. let's make it up. bear, some guynd said something to me about china, they always are saying this. a lot of policy is going on, on trade.
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classic -- trump is classic, let's put it on china so they will buy more trade. do you think china will talk down there biggest holding globally? no way. whether they buy more treasuries depends on the fx. they moved their fx policy recently, but i would not read too much into that what happens with the u.s. treasury's. a report from the brookings institute was that the fed would drop the 2% inflation target. the bank of japan has not changed, have not gone to tapering. let's see them defend their 10 basis yield point target. it is a lot of people looking for different reasons to justify a bond so. -- sell. vonnie: that is a fascinating take on that. i do want to ask you if it would
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not be a convenient excuse, and if that might itself turn into a market event? marcus: i am actually a bond bear, so let's not justify and say bonds are a wonderful investment. they are terrible, and there is huge supplies coming through. this week we have vast amount of supply in japan. .he yield has gone up 1% that is where the life insurance and pension funds come back in. i suspect we will get a strong auction. 0.1 basis yields in japan, which was supposed to trigger the selloff. billion,ked it by 10 yet they are issuing 100 billion last, so no wonder they do need to -- do not need to buy some money bonds back. that is a non-issue. the china thing is speculation. we do not know what will happen
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there. we are clutching at straws. i think this is a selloff, a classic auction sell where people are pushing a weak spot that the yield has risen. going into the auctions in the states there will be strong bidding, and maybe we will find that things are not so bad by the close on friday. if cpi is a nasty print, then maybe it is more serious. vonnie: what about e.m.? we had a taper tantrum when the fed acted like it was going to hike but did not hike. e.m. really call that. will we see the contagion pass itself onto em countries, or does it contain itself to the developed market? marcus: i know it is not emerging markets, i would not say portugal and italy are emerging markets, but they are weaker economies in europe. they had syndicated bonds. , there is for 20 year
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plenty of money out there with very low yields. on emerging markets, there is plenty of demand on high yields. default rates look like they are going lower and lower. this is not the same type of bond selloff we might have seen before hand. it will be much more leisure touch measured. -- measured. it is about the 30 year, how steep the curve is. the achilles heel of the 30 year yield, and if that is not marching up -- in march of last year, the 30 year was 30 basis points higher, so we got plenty of room on the long end before we start getting into new territory. mark: i have not got time to ask you about albert alberts -- marcus ashworth, find all his commentary on the bloomberg.
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let's check in on bloomberg first word news. courtney: germany is maintaining a hard-line stance on brexit. angela merkel's government will demand the u.k. pay for the privilege or its bank to have access to the u.k. mark -- the e.u. market. malaysia says it will pay texas-based ocean infinity up to $70 million they can find the wreckage or black boxes of the missing malaysia airlines flight within three months. the transport minister estimates there is an 85% chance of finding the debris and the new search area, roughly the size of vermont. 20 14ane vanished in while flying from kuala lumpur to beijing. in southern california, deadly mudslides and flooding have killed at least 15 people. more than two dozen others were injured. that were stripped of
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vegetation were turned into mud. one of hillary clinton's fiercest clinics -- critics on capitol hill is calling it quits. darrell issa off will not run for reelection. used that post to investigate clinton's role in the deadly terrorist attacks in benghazi, libya. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am courtney donohoe. this is bloomberg. mark: thank you very much. coming up, can precis chains beat out discount rivals? we will hear from the ceo of one of the uk's biggest supermarkets. this is bloomberg. ♪
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♪ news.got some breaking selling a 1.5 billion euros stake in covestro. it has agreed to a 90 day lockup period to achieve the full celebrate -- separation in the midterm. it is selling about 1.5 billion euro take. covestro is a german plastics and chemicals maker that was spun off from bayer in 2015. breaking news. the market is closed today so i am sure we will see reaction tomorrow. vonnie: it is time now for a stock of the hour. shares of eastman kodak are surging for the second day after the company says it is getting into the digital licensing and cryptocurrency market.
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they are up another 50% this morning, all the way up to $10.60. joining us with more is taylor riggs. taylor: they doubled yesterday and continued the gains again for today, all that with the licensing deal. one, ae creating kodak platform for photographers to upload their photos and using the underlying blockchain technology to do an initial coin offering on january 31 for that ledger system. ap year to year transaction so this highlights that slowly but surely we are seeing companies come out. look at the underlying technology start to be disruptors. peeree more of the peer to technology come into real use. it has disrupted the markets as well. we have charted the short-sellers here. that is in blue, the short
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interest ratio. basically, the percent of shares outstanding that are shorts. that has come down but still are at about 11%. it spiked up about 25% last summer, but you are still seeing a significant amount of shares. pete is phenomenal. he was talking to me about volume, volume more than 800 times the normal amount. it is pretty incredible. vonnie: what does it mean for other companies? photographers were one of the first to embrace things like zen mow. this is codec coin, based on blockchain. taylor: we have had a few companies come out recently. one in particular is the owner of that description movie pass, the description film service.
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they are looking at an ico as well, looking at the blockchain technology and have been for over a year. i point to the difference between these companies that are different. ,espite the craze and mania looking at the underlying technology to see how it can disrupt is mrs. -- disrupt is mrs.. -- businesses. vonnie: taylor riggs with our stock of the hour. kodak's ceo joins bloomberg markets today at 2:30 eastern, 7:30 london time. i do not think he will be in a tuxedo but he might be. mark: higher and shopping in the u k facing competition from discount stores. the cfo of sainsbury spoke to us about the challenge of the holiday shopping season. >> there is no doubt consumers are under more pressure. andre well aware of that,
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we have seen that well documented across the industry. we are very pleased with our relative performance as we took share in general merchandise and clothing. if we look back at christmas, customers were looking for value, customer service, and flexibility. it was really an online christmas with 20% of our group sales online. our grocery online business growing over 8%, and our fast-track for our delivery with so it wasgrowing 25% a robust performance in a challenging market. >> that message to investors is about online. how much more will you invest? if we talk to you as the cfo in terms of capital, is that where the next lump of capital goes? >> if you think traditionally retailers of the last 15 years would've spent a lot of money on stores and real estate, we opened a handful of stores and
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the big capital investment is not going into real estate but into technology, from an efficiency and customer service point of view, and growing our grocery online and fast-track business. is thatright, there constant move to give customers greater flexibility. hence, we see locally shopping or online shopping growing strongly. >> how big can the discounters get in the u.k.? you have some experience in this area. weeke reporting their best over the christmas. >> they are putting down more spaces so they can continue to grow in the u.k. we are focused on what we can do uniquely for customers. the quality food, the taste of different range is growing. we focus on giving our customers value after we give them great service and our stores, and helping them shop whenever and wherever they like through
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fast-track with our ghosts -- argos. on the 22nd of december, our busiest day, we were making a home delivery every second of the day. >> every second of the day. i do not know whether that frightens me or emboldens me. >> it is likely frightening. >> grand. i am still in a local store at the end of the road. where are we with the inflation debate? the bank of england wants to know what is happening on the grind with you guys. is it going to flatten? is mere call in terms of the inflation push and whether we have topped out. recent market data would indicate food inflation is a little over 3.5%. we did not see quite that level of inflation in our business, and clearly we are working as an industry and a business to maintain the prices and keep inflation down. you have got to believe -- and i
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think others have come to this thee have seen the most of inflation related to the brexit situation has flown through, and there will be some commodity ups and downs as there always are depending on harvest and what the price is. the big inflation push we should be seeing toward the end of that. mark: kevin o'byrne from sainsbury speaking to bloomberg a little bit earlier. botc chime -- time. this is bloomberg. ♪
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♪ it is time now for our global battle of the charts, where we take a look at the most telling charts of the day and what they mean for investors. you can access -- axis these on the bloomberg by running the function at the bottom of your screen. have a rematch, mark barton
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versus kevin kelly. kevin: we are off to a great start not only in the u.s. but globally, but are stocks running too hot to fast? in white is the msci all country world index 14 week rsi. they are approaching a value of 90, the highest on record. some people might say this might be a little frothy and moving up to bank quickly, but what we found when we analyzed the data since 1990, when the data crosses an arc above 70 it is typically positive, and every time it is crossed over 80 it is positive for the next 12 months. momentum might slow down the equity market but that does not mean we are in for a price correction. vonnie: you might have your work cut out for you, mark. i would probably give this chart somewhere in the region of a minus, b plus. mark: im and a man.
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none of this minas rubbish. you know it is a bond story. let's talk about the two-year path of the treasury curve. let's make it global. let's compare it to what is happening in greece. the search for yield has sent investors to strange places, and i would not say greece is a strange place, but the search for yield has sent investors to many parts of the globe. the blue line is the greek two-year yield. the u.s. two-year yield was just over 1%. the u.s. two-year yield is now above the greek two-year. , it is the interest rate expectations and economic growth and the improving fortunes of greece. let's put it a bit more and perspective. back in 2007, this greek two-year yield touched 259%.
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the u.s. two-year back then was 4.5%. there is not much liquidity in the greek market, but on a day of bonds, this is the chart that caught my eye. .onnie: you sold it how could anybody argue with that conviction? the very first line, you did not have to say anything else. it is 1-1 now. i want the two of you back in for a tiebreaker. we will be talking with u.s. chamber of commerce president and ceo thomas donohue. this is bloomberg. ♪
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mark: i am mark crumpton with first word news. north carolina's congressional map has been deemed unconstitutional. a panel of federal judges ruled artisan gerrymandering gives republicans and unfair vantage in elections, and it calls for
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the republican dominated legislature to create a new landscape of congressional districts by january 24. one of hillary clinton's fiercest critics on capitol hill is calling it quits. darrell issa of california will not run for reelection. he is the former chairman of the house oversight and government reform committee. to investigate clinton's role in the deadly terrorist attacks in benghazi, libya. south korea's president said he is willing to meet him jump on under the right circumstances, but thou never accept north korea's nuclear weapons program. his comments, a day after the first high-level talks between the koreas in more than two years. president trump told president moon the u.s. is open to talks with north korea when it is appropriate. germany is maintaining a hard-line stance on brexit.

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