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tv   Bloomberg Daybreak Americas  Bloomberg  March 27, 2018 7:00am-9:00am EDT

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trade talks are going fine. markets reverse on the news. the two big pharma companies set very different courses for the future. the london times reports that the deutsche bank ceo days may be numbered. the bank is still struggling to deliver on a turnaround. welcome to "bloomberg daybreak." i am david westin care with julia chatterley. alix steel is off today. welcome. moment todon't have a lose. we have a jampacked show. what trade war? the stoxx 600 with its first gain in six sessions.
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the march high earlier in the session. by 0.5%.es higher we have still not recaptured thursday's opening levels. well above $70 a barrel. we have the saudi crown prince, ceos, and the u.s. meeting today. david: time now for the morning brief area at 10:00 this morning, we will get consumer confidence data for march. and economic policy conference in atlanta. at 1:00 this afternoon, the u.s. treasury will be selling $35 billion in five-year notes. we are joined now by cameron
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crise, bloomberg macro world strategist and lisa. talksesident says, trade going on with numerous countries that for many years have not treated the u.s. fairly. in the end, all will be happy. i want to put up a chart that shows what happened. coaster quite a roller ride. this is what they call a double bottom. came down, can backup, and came back down. the highs were a little lower. >> it is not quite a double bottom. you bounced off the 200 day moving average a few times. this't want to take program down market, but you can almost make a children's parable in reverse.
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the more often it knocks at the door, the higher the likelihood it will eventually break through and blow the house down. you really don't want to see this 200 day threatened to many more times. extentue is that to some the easy money, if there is ever any easy money, has probably been made on the bounce. equity futures are only back to where they were at 3:00 on thursday. it is difficult to call it a game changer in any meaningful sense. if you go back in history, given rhetoric inn in trade talks from yesterday, the equity gap opened higher. when that happens historically, you tend to have a good day for the markets on that day. if you project that out, the market declines next week.
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i have been a little more surprised people have not rushed into treasuries. >> i have been surprised at the whole narrative that this is a risk asset rebound and everything will be ok. specifica stocks narrative. you do not see this in other asset classes. andgap between two-year 30-year treasury yields, that is the widest since 2007. potentially, we will get some better than expected trade negotiations. the outlook has not changed. you are not seeing a rush into credit.assets in this is a stock volatility story. is this a particular type of buyer? that is the more interesting
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question. julie: still in the corrective phase. moving on to the next story, glaxo buying in novartis pharmaceutical $13 billion of stake. lisa: this is an interesting story, and it is interesting that both shares are up premarket. it is two different strategies. novartis saying they want to focus on the cancer industry. glaxo saying we want diversification because if the pharmaceutical industry does not perform, at least we can have a buffer in the consumer aspect like angular. this seems like a tricky strategy. the market is buying both. julie: nice. >> you have to stay in your
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wheelhouse. julie: whatever she says. >> i will defer to lisa. julie: me too. david: the third story today is deutsche bank. there is a report from the london times today that john cryan might not be ceo too much longer. he is having a falling out with the board. i think he is on the third reinvention in three years. i feel badly for him. he does not have a strong hand to play. he has a shorter total -- shareholder meeting coming up. are the days ticking away? lisa: there are questions about specifics as well. to take aryan reviews meeting with hna? they are a big shareholder in
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deutsche bank. they are arguably going to deleverage. there something specific, or is this a matter of credibility where if deutsche bank said we are on a good track and all of a sudden reversed course yet again and said maybe not, we are expecting lower than previously forecast returns in our trading unit. some big questions. julie: this is a supertanker to turn around. there is a sympathy element there. when you look at investment bankers in the third quarter, there are concerns among numerous other ceos in the hot seat that could be offered the job. deutsche bank has one enormous asset, which is its name. lisa: does it? it doesn't really have the same credibility as a counter partner.
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people have shied away from that. is it an asset or a liability? huge company. david: the german government will not allow it to go down. is ans the way the name asset. it has insurance no other bank has. >> i think deleveraging is a key issue for deutsche bank. if you look at the balance sheet, it has gone from 2.2 trillion euros at the ding dong trillion.w 1.5 it is difficult to do this strategically when you are deleveraging, which deutsche bank has been doing over several years. how are you supposed to grow your profit?
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they are trying to become safer and more profitable. it seems like a paradox. >> i would say deutsche bank is the albatross around european banks generally speaking. n.at is sort of a know -- known known. during the financial crisis in the u.s., it went down the plug hole. investors are looking at deutsche's at 10 euros as the same vortex of hopelessness. it seems like every time it looks like it is getting on its feet, you turn away and it is down 3.5%. do, we wantver you you to do it quicker. cameron crise, lisa abramowicz.
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coming up, u.s. futures pointing higher today after yesterday's rally across the stock market. we will have plenty more on the market rebound as allianz global investors joins us. this is bloomberg. ♪
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♪ >> this is "bloomberg daybreak." i am kailey leinz with your business flash. selling a $13.5 billion stake in its pharmaceutical business to glaxo kline.
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won an optionhas to win the specialty group of akzonobel. the 10 billion euro deal will leave the dutch company focused on paint. uber to stoprdered operating autonomous cars on state roads indefinitely after the death of a pedestrian there a week ago. the uber ceo called the accident halt testing. boosted by trade helps. -- hopes. the stoxx 600 europe index
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jumped the most in one week. ones&p 500 jumped 2.7% in session, the biggest rally since august of 2017. atl dwane, global strategist allianz global investors. great to have you. what is going on? neil: there is so much going on. the issue around trade is one we will be living with for some time. i think there are early signs he is doing deals. we know overnight he did a deal with south korea to change things. i think that is what he is going to do as president. the ultimate focus is china. the focus we all have as global citizens is the u.s. is over consuming global products to the tune of hundreds of billions of dollars. china happens to be one of the
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suppliers of that. unless you consume less, he cannot change the trade deficit that easily. julie: what does consuming less mean for united states growth? if you want to tackle your deficit, you are spending less. neil: that would be good if you are saving more. i think there is an element with interest rates starting to rise, deleverage should be rising rather than raising more money to buy new cars. david: at what point does trade become abundant now as opposed to some noise off to the side that does not take away from the fundamentals? neil: i think the -- about what happens with trade as what happened with the markets on friday. rates rise, yields rise, and you
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have a heart attack to the underlying economy. hand, on monday if trade is not going to matter that much, the fed may not raise rates. that is good for risky assets because the longer term discounting rates is not going to happen as people fear. david: those choices are quite start. they lead you in very different directions as for how you invest. how do you discern those possibilities? neil: we look at where we are in the economic cycle. despite the optimism we discussed last time i was on this program about what is happening with president trump, u.s. equities have looked fully valued for some time. i think we would advise clients to look elsewhere where valuations are not as full and the economic prospects are still relatively good.
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u.s. leads is the the world. law year, we had kind of a as everyone got sucked into the tax reform, which not everyone thought would unfold. everyone who has has wanted to in -- who has wanted to get has got in. when new york sneezes, the world catches a cold. julie: when do we government structure to reenergizing -- do we go from exhaustion to reenergizing? where does that come from? neil: i think we need to see the trumpflation start to appear. cast, look at the fed now we were at 5% at the beginning of february. we are now at 2.1%. it is not happening on the
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ground. business sentiment is high, but the underlying economy is not picking up the way we thought. we may have to wait for the summer to see that. what we are seeing with the rise in rates is deleveraging and value at risk inside many equity portfolios higher. this deleveraging process could monthso or three more now that volatility is back to normal levels. david: volmaggeddon. i hope you put a trademark on that. facebook under fire. the british parliament heard from a former cambridge worker today. mark zuckerberg has refused to testify. this is bloomberg. ♪
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♪ david: everybody wants to talk with mark zuckerberg these days
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over those data shared with cambridge analytica. he has yet to agree to talk to any of them. they have lost a fair amount of market cap over the last week or so. as regulatory scrutiny gross, they have lost that market cap. joining us is derek. welcome to the program. you must a sense of what facebook's strategy is now, if not resisting, at least ignoring. >> they would say they are not ignoring. they have done a lot of media and written blog posts. he is making himself available on the private side to some of these lawmakers. they are hiring a bunch of new people to do lobbying for them in washington. i am sure they are doing the same in europe. their strategy would be how does whenlp for me myself to go
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a lot of these questions about security, privacy are better answer by my lawyers and top technical people. that is their argument. understand,ey facebook as a substantial data issue. for the head of facebook to say they don't know that much about this, that is not reassuring. besides the lawmakers. >> investors are one thing. on the political side, mark zuckerberg is pushing back on this idea that he is a political figure. he has said in interviews last week that he is fundamentally uncomfortable with the idea that he makes decisions that affect people's lives all over the world. david: how my facebook users are there globally? >> a third of the world. david: and he has a difficult time understanding he makes decisions that affect the world? come on. >> this is a position they have
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been in. they have always been slow to realize the political position they are in. they have come a long way from the end of the 2016 presidential election when they denied it was silly that facebook at have had any affect on the election. julie: do you think the crisis is likely to deepen? neil: i do. you have got to get out in front of it. you have to do everything you can. as a consumer, this has been an accident waiting to happen. that is the millennial on facebook with the lack of travis he control over your own data. shareholders, he clearly does not have the right type of advice around him. no one with gray hair on the more saying we need to be proactive. the people who actually make facebook make all this money, the advertisers, he is doing
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nothing reassuring to say trust us, we will make sure the advertisements go to the right people. for 10. julie: you can be sure that behind the scenes he is talking to advertisers. when you look at where the advertising spending goes, google and facebook as the lion's chair, 60% of u.s. advertising revenues. is 5%.t biggest there is no other game in town. neil: true. we have never known in advertising which have is the good half -- half is the good half. if they don't control this agenda, they may lose confidence in the business model. david: what do you think they think is their biggest
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vulnerability? >> i think facebook is still confident that they are the most targeted, along with google, the place to be for advertising online today. they are well positioned to continue to be that while technology changes. this is something they were already talking about earlier in the year. mark zuckerberg made fixing facebook this year, to making it a more positive experience, whatever that might mean. already spending less time on facebook, but they are using instagram, which is a facebook app. julie: our advertisers saying we don't want to work with you anymore? neil: i think it is both. the social media outlets like instagram or snap could benefit from this. millennials are not going to
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change their use of the phone, but they may change the channel. us were on of facebook. julie: just a little bit. neil dwane of allianz global investors will stay with us. thank you for that. well handled. an update on ipo plans, an exclusive interview coming up. from new york, this is bloomberg. ♪ retail.
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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 business outmaneuver. ♪ >> this is "bloomberg daybreak." alix steel is off today. let's give you a look at the performance from european markets this mine. 1.5% higher.
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not one stock sector in the stoxx 600 outside of green. futures taking their cue, continuing the rally we saw from yesterday's session, 2.7% rise for the s&p 500. no change now for the u.s. 10-year. twos, tens trading around that 154 basis point level. highs.you have the dollar trade war with china. headlines from outside the business world, we turn to kailey leinz. arehe u.s. and its allies expelling more than 100 russian romance in response for the attack in the u.k.
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prime theresa may has hailed the coordinated global response. >> together, we sent a message that we will not tolerate russia's continued attempts to undermine our values. european nations will also act to strengthen their resilience to chemical, biological, radiological, and nuclear related risks. leader kimrea's jong-il and made a surprise visit to china in what would be his first trip outside his country since coming to power in 2011 according to three people with knowledge of the matter. the train reported to be caring the delegation was seen to be leaving beijing today. to reducemp's efforts the u.s. trade of sit with china becomes entangled with his efforts on diplomacy with north korea.
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jared kushner's family business may have violated federal laws. the deals revealed by the new york times included a 300 $35 million loan from -- $325 million loan from citigroup. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am kailey leinz. this is bloomberg. david: thank you. a public offering of stock for the basis fors redoing the kingdom's economy by 2030. we got to sit down with the ceo of aramco yesterday to talk about that idea. -- ipo. >> if you look at the numbers on the ground today, if you look at the last three years, demand growth is at about 1.5 million
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barrels per day. over three years, that is growth of about 5 million barrels per day. the global economy is doing very well. there is demand for more oil. r the global energy security, we need to make sure we have enough resources. arabia thatsaudi other companies and countries to make sure we have enough supply to meet rising demand. jonathan: when you look at the future of the internal combustion engine, i don't see r&d money going into the internal combustion engine. you seem to be quite optimistic about the future about something a lot of people are not optimistic about. why? >> there is much better
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improvement in reducing carbon emissions from improving efficiency of the combustion engine than from renewable. a lot of reduction in carbon emissions happened because of efficiency. there is a lot of work going on now to improve efficiency in terms of mileage per gallon. saudi aramco is also doing a lot of work to improve the efficiency of engines with our detroit center here in the u.s. and in paris. r emissions.e there is a lot of work being done by oil and gas companies and done by auto manufacturers to improve efficiency. jonathan: you will understand that for a lot of people this is part of a broader concern around the ipo of saudi aramco. there has been reports that the
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investor appetite is not bear the way the saudi like. the you see the appetite? >> of course. jonathan: where is it? >> a lot of questions and media coverage of what you see in the news is about the ipl and when it will happen. -- ipo and when it will happen. there is a lot of demand for the listing of saudi aramco in terms lf performance the data wil show when we go on our roadshow however performance and how we the highest producer, the most efficient, the most reliable. this is a great company that the data will show our performance. jonathan: when i speak to people, they are not talking about when this will happen, they are talking but if this will happen. perhaps the whole ipo goes into
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the decrease. -- deep freeze. >> there is a lot of work that is still ongoing. the government did a lot of paperwork to make it an independent company in january 2018. that is an indication that the ipo is ongoing. be listing in the second half of 2018. we are doing a lot of work to prepare the company for listing. there are committees for the government that overlook what we're doing to make sure the company is ready for this step. jonathan: do you have a set of accounts audited to u.k. and u.s. standards already? >> for whtat? jonathan: for listing. >> no, what is required by the
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listing venues, we will be providing all the necessary documents. jonathan: it is not your decision necessarily when this will happen. i am trying to understand what when this will happen. >> it is the government and the venue that will decide when this will happen. it is a lot of complexities that require time. there is a lot of work that is ongoing to evaluate all of that and decide on the timing and the venue. julie: fascinating. er speakingin nass with jonathan ferro. let's get back to neil dwane. does the ipo take place? neil: i think it does. i think it is part of saudi arabia's intention to open their country up.
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i think it does stay in saudi arabia with some keystone investors from sovereign wealth funds in asia. julie: they need around $70 a barrel to break even. double whatprice is it was when they were talking about initially doing this. in terms of the deficit and surplus of the accounts, i get there are a lot of patchy dollars that they have, but have dollar increase they means less willing to sell off down jules. jewels. neil: i think they are taking a lesson from russia. all they did was invest in their oil sector. if you add in the need for a high oil price in saudi arabia and russia would also like a
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higher oil price because putin can be quite generous to everyone who voted for your everyone who is helping that the oil price would go lower from here, especially with the global oililocks, the demand for is going up globally. david: the crown prince is trying to rebalance the economy. you heard in that interview that they may be opening their economy but they are not opening their accounting. him say they would open the reserves, but not their accounting. our foreign investors going to be willing to put capital in if there is not greater transparency? neil: i think it is highly unlikely. from china is that
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there are a lot of strong chinese companies, but they trade at high dividend yields because people don't trust the underlying accounts or governments. is saudi aramco going to be run for you as a shareholder or the saudi arabian government, we know the answer to that. david: you look at russia and other state-owned companies, they trade at a discount. even if you get the share price up, you will not get full value for the investment. that is a problem for the crown prince as he goes forward with this very aggressive plan to restructure the economy. neil: that used to be the piggy bank of the ruling family. by making it more open and public, he is showing these young people that there is wealth being diversified into the economy. julie: the argument is that is what the crackdown was on corruption at the ritz.
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ich peoplepeople -- r that have pillaged this country have to do this too. do you buy into the message that this is a broader corruption crackdown? neil: i would definitely say so. it wants to be more transparent and inclusive going forward. it is not just about the top 3000 people. that is what president xi is doing. he is saying, you purchased your place and new york, now i want you to leave your money in china. david: people have been spending a lot of money outside of saudi arabia. there is like $2.5 billion spent by saudi's overseas for tourism. they are now saying bring that back here for tourism. we will build you hotels and centers and parks. if they can do that, that could
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turn around a struggling economy. neil: one of the key issues with allowing women to drive is he has to change the culture. constrainedas been of creating a dubai type environment. the only way you can get that is if we can wear t-shirts and shorts. julie: you are very optimistic about saudi arabia. neil: i think he has a plan. it is a 10 or 15 year plan, but with oil at $70 a barrel, he has the money. david: he certainly understands the issues. julie: does he landed in the desert? david: the values have to be considered. john: i jest, but i don't. david: it has to be considered. thank you. bonuses are back to precrisis highs.
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we take a look at the average all street bonus next. tune into the radio and listen to tom keene on the radio in new york. lisa abramowicz joins the conversation from 9:00 to 10:00. it can be heard all across the u.s. on sirius xm radio. live from new york, this is bloomberg. ♪
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>> this is "bloomberg daybreak." i am kailey leinz. coming up in the next hour, richard turnill, blackrock global chief investment strategist. ♪
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now to your bloomberg business flash. the carlyle group has won the option to acquire the chemical group of akzonobel. the 10 billion euro deal will leave the dutch company focused on paint and coding. akzonobel said the bulk of the proceeds will be distributed to shareholders. the swedish fashion retailer struggled to sell garments. h&m.ts fell 62% for to stophas ordered uber operating autonomous vehicles in the state. the governor called last week's fatal incident and unquestionable failure to comply with a but safety standards.
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the company had already voluntarily halted all testing. that is your bloomberg business flash. david: thank you. we will turn to wall street beat. first up, bonus boosts. the average bonus jumps to the highest and's 2006. number two, -- since 2006. number two, sharing is caring. the guy meet todd, behind amazon, berkshire, and jpmorgan's new health care initiative. julie: good morning. >> so much going on. julie: i know. back.s are >> people really care about their paychecks. we love these superlatives.
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$184,000, not chump change. the chart really that show that they have been fairly consistent, but the last time we saw this was 2006. that makes people happy in the sense that those were really good years, but then you think about what happened in 2007, 2008, 2009, and you worry about where we are in the cycle. employee.t is per if you take a look at the total pot, i'm not sure if it is as large as it was before. >> $34.4 billion. david: that is not that bad. >> the comptroller pointed out that it will be interesting to see how the money shifts around a 2018 with the return in volatility. david: some of those banking chiefs may need that money.
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executives tot chip in so they feel some of the pain. >> he is on his way out. he said he is going to retire. this is the sort of thing you say at the end of the art ten -- end of your tenure. it is something that has been talked about for a while. i don't think we have ever heard anyone of bill dudley's stature. the new york fed is incredibly important in its oversight of wall street. this was really the center during the crisis of those discussions. awback.it is akin to cl we should be able to find you directly for some of what you did. when theou think about government started to force ceos and cfo's to sign. david: i sat down with the
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auditors every year and had to personally sign to say that i went through the report for my operation and was personally responsible. julie: this is about paying longer-term debt. the argument from the banks will be we have to pay these guys, or we will not make money. >> it is an idea. there would obviously be some resistance, i imagine, from the banks and the ceo's. we are at a time when more pressure is coming. julie: sign on the dotted line. who is top homes? >> he is not that well known, but he is an important lieutenant to warren buffett and most notably at the center, the primary architect of this health care deal announced a couple months ago. this is a guy who people should definitely keep their eye on. at the center, not
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only of this particular thing, ethos of berkshire hathaway. they -- noto riously low profile. warren's own heart. >> it is a well-done profile, must-read. julie: well done. david: some of the people we know are in there. michael carson is in there. there is a dinner he is making a presentation. that is not the dinner. they bring in mark blas rate. david: i am going to speak to him later today. julie: how did he do? >> i think it is clear why they did not give him speaking parts.
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you would not mistake him for a professional actor. julie: don't give up your day job. >> sometimes it feels like a holiday, but i cannot take my eyes off of it. kelly fornks to jason that wall street beat. reports ceoimes john cryan may be on his way out of deutsche bank. julie: check out tv , you can watch us online, click on our charts and graphics, interact with us rightly, send questions. plenty more from us to come. from new york, this is bloomberg. ♪
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david: this is what i am watching, deutsche bank.
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this morning, we will cook to the london times reporting that the chairman is not too happy with mr. cryan. this is not a total shock. he may not be out. julie: potential tensions with the cfo as well. this is a supertanker of a business to turn around. the question is when are we going to see after how many turnaround plans? three different turnaround plans. can take thate chart again to show how the stock has done under john cryan. it is not altogether down, but it is not a happy story when so many banks have done so much better in comparison. julie: we are talking down 17%. he has had almost two years to try to turn this around. david: he has had multiple planes. julie: you would want the situation to be improved.
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the story did come from the times in london. they are talking about potentially the cfo tensions, the chairman tensions. all sorts of directions for different replacements, bill winters, even the trading unit, mark-ish a. -- marcus shae. organization is only talking about this today at deutsche bank. that is not good. next, richardup turnill of blackrock global chief investment, from new york, this is bloomberg. ♪ retail.
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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
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near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. ♪ david: all will be happy. president trump tweets of the
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trade talks are going fine and global markets rivers declines on the news. a new ceo quickly moves to take over the consumer health business and had shared as the two big pharma companies set very different courses for the future. an drumbeat for deutsche bank .ould "the london tim john cryan stays the ceo may be numbered as they fail to deliver the time. welcome to "bloomberg daybreak." i'm david westin right here with julia chatterley. alix steel is off today. delighted to be with the. you. julia: all is fine as david mentioned. futures as for u.s. they are higher after the 2.7% gains in the session yesterday. what a bounce we saw with no worries as far as the market is concerned at least for now on the prospects of future trade tensions or trade war's as we have been calling it.
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i want to draw your attention to what we are seeing. we do see dollar strength versus both of those higher. crude is the one to watch. the price gaming 5/10 of 1%. it is worth watching in light of talks in new york between the crown prince of saudi arabia, the president, and business ceos meeting today. david: all the buzz around new york city. time now for the morning brief. we will get the conference board's consumer confidence data for the month of march. at 11:00 eastern time, the atlanta fed president speak at a conference in atlanta. at 1:00 this afternoon, the united states treasury will sell $35 billion in five-year notes. get a look at what's making headlines outside the business world. kailey leinz.
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kailey: thousands demand a full investigation into a shopping mall fire that killed 64 people, many of them children. the blaze engulfed the winter cherry mall sunday. witnesses reported that fire alarms did not sound and many doors were locked. at a memorial for the victims, president vladimir putin blamed the desk on "criminal negligence and sloppiness" and promised grieving widows and thorough investigation. he has ordered his country's military to take full control of its borders after a threat of an incursion into iraq. mistress will prevent "foreign fighters for using iraq as a cross-border attack against turkey." over the weekend, the turkish president announced operations in northern iraq to clear the area of kurdish fighters. white house attorneys are examining whether loans secured by jared kushner's family business may have violated laws. the deals revealed last month
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included a $184 million loan from apollo global management and $325 million from citigroup. executives from both apollo and citigroup have denied discussing loans with jared kushner at the white house. global news 24 hours a day powered by 27 journalists and analysts in more than 120 countries. i'm kailey leinz. this is bloomberg. david: it's been a wild ride in the markets over the last week in the last month. much of it this last week has to do with the trump administration's actions and statements about trade policy. we welcome richard turnill. we are putting this chart up again. explain the big dip down where we had that number on wage increases and the volatility crisis. they came back up and now the most recent dip has been on the trade event. is the trade taking care of?
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the pink line is the 200 day moving average and it has bounced off of that and come back. richard: we have moved into a very different market environment in 2018. the market has been concerned initially about high rates, higher inflation, and higher real rates. that drove the volatility back in february. volatility has been around trade concerns and the applications that will have for growth going forward. you look through that and you look at what has been happening to the economic data and earnings data around the world, we remain in a sustained and synchronized global expansion. our view is that investors should look through short-term volatility and focus on from metals. those fundamentals are still encouraging. david: is this a single noise issue? whether it's the trade talk or the number we got last month, is it noise and the signal is more study? richard: i think it is steady.
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when we think about what could derail the global economy from this very positive environment, sustained synchronized expansion around the world, what could knock us off that path? trade is really high on a list. if we escalate into a full-blown trade war, it has implications not only to hit directly through trading goods and services, but also confidence globally. investors are right to focus on this issue, but we are not seeing any signs of this escalating beyond tensions and market sentiment. the signal is strong, synchronize global growth. julia: this is an overreaction to headlines? richard: the reaction on thursday and friday did look like an overreaction. with the news we had out of the u.s., it was less severe that many people expected. the size of the potential tariffs was less than 1.1% of gdp.
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the initial reaction from china was actually quite measured. i think the scale of the reaction partly reflects that nervousness we have seen this year. markets are adjusting to an environment where growth is no longer surprising to the upside and where interest rates are starting to rise. julia: and adjusting to an environment of high volatility and that means deleveraging. we were hearing from neil and he said looking for opportunities perhaps outside the united states. i look at what we have seen in europe. a couple sessions ago we were down yearly lows as far as the european overall markets are concerned. 10% from the january highs of the stoxx 600. what do you think of europe right now and that very much ties to the currency? richard: we are constructive on european equities going forward. the european market has three major drivers right now. the first is earnings, but the european market is supported not only by domestic growth in europe but also a very mov open market.
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40% of revenues come outside of europe, including here in the u.s. and emerging markets. earnings we think are good. valuations in europe still look reasonable to us going forward, particularly once you take low interest rates into account. finally you have a central bank in europe that is very accommodative with monetary policy. we still think the better opportunities are outside of europe. we look at the u.s. and we're getting much faster is growth -- earnings growth. julia: are you worried about the strength of the euro? when you talk about the international aspect of europe and the openness of these economies, you start to see a european currency strengthen at this point and that takes the shine off. richard: the impact of the strong euro on the economy is quite limited and potentially seeing some of that impact now. julia: some really high levels. richard: very high levels. the broad signals we are seeing on the economy with black rocks not only thek
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published data but big data signals. very robust growth in europe. there is a much bigger application for some of the stocks within europe, which are much more open and exposed to international markets. part of the reason the european market has been so weak this year has been that strength of the currency. david: when you look at these comparisons with the stoxx 600 versus the s&p, how much of that luck is skewed by what's in the index? richard: in particular when you look at the euro stocks, you have to recognize that's a very narrow stock market. it's not representative of the broader index. part of what has helped the u.s. market has been the strength of technology sector and the strength of financials. very big weights in the u.s. look at european markets broadly and much smaller weights for some of the sectors. higher weights for areas like energy and consumer staples have
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struggled this year in a rising rate environment. david: when we look at those rates, do they reflect the underlying composition? that is to say we have much stronger tech companies in the united states than europe and the cap or is it a matter of the index? richard: we look at the u.s. stock market and they have exposure to domestic growth. that does matter, but the composition of those indices bear little relation to the underlying economies. when people look at the european stock market, they think about european growth in the economy. the european stock market is very open as exposed to global trends and can benefit from those trends. julia: you said you like the united states and the story even relative to europe despite the relative valuation benefits you get right now in your. what sectors are the drivers here? can we continue to see the strength we have seen in technology as we push out? richard: we have become more positive on the u.s. recently actually.
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we have moved into a market environment where returns looking forward are going to be driven much more earnings growth globally than they are by the rating, which is what we have seen the last couple of years as we see valuations move higher. we are looking for where we will get positive surprises. we are getting fewer positive surprises. one of the futures causing headwinds is we got expected to every company beating expectations. this year has been a much choppy your picture. stillk at the u.s. and the potential for positive economic growth surprises but potential for positive earnings growth surprises. one sector we are hopeful on is technology. we see that being sustained with more being spent on technology as well. the second is financials. as the fed raises interest rates, the yield curve moves higher and a big boost for financial stocks. david: don't base effects cut
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into that? richard: expectations are high and we are in the ninth the of this economic expansion, but with the fiscal expenditure still to come through, we see earnings growing higher going forward. julia: richard turnill is staying with us. libor rates are at the highest in a decade. we will discuss how that plays with the tightening fed and that rally of yields. from new york, this is bloomberg. ♪
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kailey: this is "bloomberg daybreak." i'm kailey leinz with your bloomberg business flash. dutch chemicals and paint manner
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box will not blow is selling its unit to the carlyle group and an investment firm for $12.5 billion. it announced in april that it plans to spin off the business within 12 months to boost growth and reward shareholders.the company rejected a takeover bid by an american rival. glaxosmithkline agreed to buy a large stake in its consumer help venture. this is after they withdrew from the bidding process for pfizer's consumer health business. is the first big move for the new chief executive officers of two of europe's largest drug companies. deutsche bank is reportedly looking for a new ceo to replace john cryan amid heightened tensions between him and the head of the supervisory board. tensions between the two have reportedly flared over company strategy. that is your bloomberg business flash. julia: they are calling it libor's revenge. rates are at their highest since
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2008. take a look inside the bloomberg at g #btv 2472. you can see the ramp up in the month of march that we have seen in libor. showing you three-month treasury builds. a similar story of that tightening in the front and off the curve even as financial conditions overall when you look on a broader basis, still back where we were in january of 2017. still with us is richard turnill of black rock. you see potential with the rates wrapping up. richard: they rise to very significantly over the last few weeks in the market is now fully priced in with three fed hikes for this year in total. for the first time in actually over a decade, you have got to your yields -- two-year yields offering real returns after inflation. we almost forgot what that looked like. there's an opportunity there.
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we see limited downside to two-year paper. where we see an unexpected fallen economy, the market would look to take out some of those rate hikes. on paper looking very attractive. we still see yields moving higher as the fed will continue to be steady and raising interest rates. julia: i spoke to bill gross and he said the fed is kind of thinkd -- deleted if they they will get rates at a 2% inflation world ultimately about 2%. it does not work in this environment. do you agree with that? richard: in some cases we could see for interest rate hikes this year and potentially another three to four next year. there is still an environment where the short in interest rates -- short and interest rates are very low compared to history. they are typically to the somewhere close to a nominal gdp growth. that implies that rates could go
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above 3% the next two years. we think the market still has some adjustment to do and not so much in the very short term, but theook at 2019 and 2020, markets will have some adjustments as to how far they raise interest rates. david: what you just said is gdp growth of 3% or better the next few years. richard: nominal gdp growth, not real gdp growth. you have to take inflation into account as well. we think this year we can get real gdp growth close to 3% if not above. that is likely to settle down next year to 2.5%. we see inflation picking up steadily so not an economy that's overheating but an economy that is on a study, sustained path and requires a higher level of interest rates that we have seen the last for years. julia: more optimistic than the federal reserve. it's implicit in that approach that the assange of the tax cuts and the spending is not
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a sugar high. it will be down to longer-term growth in the united states and not just a blip. richard: we are confident we will see a short-term boost of growth. over the next year or so. we think that will boost u.s. growth by around 1%. what we are seeing some signs of -- and i think it's early -- there are potential greater effects onto the economy and they come through potentially boosting cap x spinach or. expenditure. the upcoming earnings season will be interesting to folks on what companies are saying about that capital expenditure going forward. we are seeing encouraging signs that cap x is likely to pick up and encouraging signs of recovery in productivity. this is an economy which is about to fall off a cliff. we see this as an economy that still has significant room to run. julia: we've been talking about record supply coming to the market in the united states as well.
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we have issuance coming on the credit side as well. we talked about opportunities or lack of opportunities given how tight credit spreads are. i've got a chart here at g #btv 8001 that shows european high yields trade tighter than the united states. that's relative to where we were back in 2015-2016. what do you think of credit here? richard: we see spreads at very tight levels. that reflects the sustained economic suspension with a low level of interest rates that we have seen for some time, which inflated the valuation of all risk assets including credit. cycle,ove later into the and we have a preference for equity over credit, so why is that? as the market extends, we still see potential for equities to deliver significant positive returns driven by armies. -- driven by earnings. we do with upside the credit is and you are worried about what your downside is.
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you can worry about how much money you can lose. we saw in january of this year when equities went up very strongly that credit can do well. they can do reasonably well, but there is not enough spread to protect you from any rise in rates and duration. we think credit is still a reasonable asset class in absolute terms going forward, but when we compare it to equities, we prefer to own stocks. julia: so don't touch it? [laughter] just checking. david: richard will be staying with us. as markets here in united states have been rocked in recent weeks by volatility in fears of a trade war, emerging markets have held up surprisingly well. we will talk about that next with richard. this is bloomberg. ♪
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david: global equities have been rocked are not one but two major selloffs already this year.
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emerging markets have held up surprisingly well. you can see from this chart the white line being emerging markets and the orange line or the yellow line being the s&p 500. still with us is richard turn ill. -- surprisess me me because when i think there's more volatility and uncertainty that people would run away from emerging markets. they don't seem to be doing that. why? richard: faye different environments than in previous risk selloffs. you to thanks and the first is that you have self-sustaining expansion going on. it is not just dependent on the global cycles and on the u.s. you have got domestic growth coming through, including china that is focused on the quality of growth. the other thing it tells you is that emerging markets are not accredited trade. often em gets hit very hard and investors rush and. volatility arrives in the rush out quickly. emerging markets have done well over the last couple of years,
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but actually it's still a relatively under owned asset class and relatively attractive asset class. are we seeing a permanent or long-term change in the nature of the emerging-market economies? naturally its commodities driven and very susceptible to what's going on in the globe. are they developing their own economies and middle classes? richard: in terms of the macroeconomy, what you are seeing is evidence of self sustained growth, which is less dependent on trade to drive the cycle going forward. and areas of restructuring going on in countries like brazil and china and india as well. what you are also seeing is the composition of emerging stock market has changed dramatically. 10 years ago, you're right. emerging markets were all about oil companies and mining companies, very volatile companies. what you have seen emerge in
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emerging markets is technology. you look at the chinese stock market as a higher weight and technology than the u.s. the nature of the stock market has changed may significantly and are no longer the highly cyclical markets we once saw. still risk associated in investing in emerging markets. julia: why are you emerging markets still under owned when you made the point that they are not so crowded? people just had a real shocker during the crisis and don't want to dip their toes back in? richard: i don't make it was just the financial crisis. the reaction to the taper tantrum that we saw caused many investors to move away from emerging markets and were badly burned. what you are seeing when we look at the lack record data is that flows have moved back into emerging markets persistently the last two years. what that is indicative of his investors coming back in to an asset class they previously
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shunned rather than it becoming a crowded or loved trade. julia: that chart that you begin with look like a relative safe haven. richard, thank you so much for joining us. coming up, doubling down on consumer health. we will take a closer look at consolidation and health care with eric shinstein. from new york, this is bloomberg. ♪
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julia: this is "bloomberg daybreak." i'm julia chatterley. alix steel is off today. let's look at how u.s. futures are performing after strong gains in yesterday's trading session. 2.7% gains for the s&p.
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we just have to temper it slightly. u.s. futures not recapturing thursday's open levels just to give you perspective. border optimism in europe, too. pushing higher. the dollar-yen is higher as well. we have reached that 1.06 level. this is a pairing of some of the longs that we saw in yen, initiating fresh talks of better risk sentiment. i do keep catching myself and the euro continues to slip to 1.2378. we did take out march highs. watch the strength in the euro for some of the great optimism that we are seeing in the euro markets. the international element as we have talked about in the show. david: for an update on what's going outside the business world, we turn to kailey leinz with first word news. kailey: a top russian officials says moscow is bowing to retaliate for the announcement by the united states that it is
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expelling 60 russian diplomats in response to the nerve attack on a former spy an in the u.k. he told the countries knew as agency that he was disappointed by the united states irresponsible behavior and says it will be met with a tough response. a new report says british firefighters were not allowed to go to the scene of the manchester arena bombing for more than two hours because of confusion as to whether an attacker was still on the loose. an investigation into the may 2017 attack found firefighters were kept away because a senior officer on duty mistakenly believe there was an active shooter situation. a suicide, killed 22 people at mariana ground concert -- an grande concert. the state of california will sue the trump and ministration over the move. the citizenship data will help and forced the voting rights
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act, which protects minority voting rights. opponents say it will discourage immigrants from responding to the census. global news 20 for hours a day powered by $2700 and analysts in more than 120 countries, i'm kailey leinz could thi. this is bloomberg. julia: glaxosmithkline betting big with the new ceo offering $30 billion for a joint venture. joining us now is the bloomberg intelligence senior pharmaceutical analyst. zach andning us is eric. health care is eric's second-biggest holding. talk me through what is going on this deal. sound like a diversification with two new ceos making a splash. >> the deal just done today was eventually inevitable because in
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the original construction of the thiswere glaxo created joint venture in consumer health, there was a put option which was exercisable between the second of march of this year and the second of march of 2035. inuspect what has happened glaxo during the time it has been looking at the pfizer business, which we obviously know they are now currently stepping back from at least, they must have than also analyzing this option. to my understanding, this was glaxo going and saying let's just do a deal and get it over and done with. glaxoiously worked for and it takes care of that uncertainty in terms of one is that production going to be exercised. realizinglps novartis the outcome business and this joint venture value as
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liberating cash to enable them to do potentially more m&a. glaxo investors heard about the prospect of pfizer, they balked at that deal. gets going to buy novartis the best options and margins as they talk about heading up to 2020. ties for that now putting that $30 billion to work. for glaxo, they have now pushed out a little bit further and they are now talking about the mid-20% operating margins by 2022. previously by 2020 it was over 20% so that's a positive. the reality is that this put option was always there. they cannot escape it. if they had done the pfizer deal in the markets exercised the put option, with a lot of dollars. at the 13 here and we are talking 28 to $33 billion.
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that's a lot of money and that scared a lot of investors who rely on the dividend flow from glaxo. this deal being done now, i think has made them feel more relaxed with the potential for continued dividend growth at the levels they have been used to. from a novartis perspective, this gives them debt capacity without pushing their limits. it's a meaningful sized warchest to go to the pipeline. david: back here in new york, that's not the only important health care announcement made today. you had an interview with the ceo of aetna. explain what they are doing . sam: they are passing along some of the discounts they get right now on pharmaceuticals to individuals at the pharmacy counter. this is a really big deal, especially for people with high deductible plans who are particularly sick and paying a lot upfront for their drugs.
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this should give them lower prices so it does not start until next year. want to put up a chart showing the rate of change in prescription drug prices month by month. you can see it's a noisy and goes way up to over 7% and sometimes down to 2%. overall this is a big concern for a lot of consumers. the president of the united states said he will have a press conference to announce some changes to get those drug prices down. zachary: what's going on as you have seen aetna and united health take these provid stakes to getive on the right side of the debate . he is putting it on these drug companies and saying they are charging high prices. julia: you have all sorts of factors with the amazon affect and the impact they are having with broader consolidation and the pricing pressures overall politically driven as well. what do you make of the sector abroad and we will talk about
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your picks in the region? eric: health care is a pretty large sector for us. part of it is because what we like to see a really deep competitive advantages in these businesses. clearly you have that with health care and certainly strong demographics and prince of people wanting to live longer, healthier lives. amount ofen a fair consolidation and growth in industry and it's a relatively consistent kind of growth that happens without regard with what is happening economically because of the kinds of products that they sell. we have united health in our portfolio and dickinson is in the process of completing its acquisition. when we see those kinds of consolidations, what we are seeing is an attempt on the part of these health care companies to compete more effectively through broader scale of the products of variable to provide an sell to health-care providers , hospital systems, things like that. if they have more scale come they have more likelihood that they can get a bigger piece of business. david: how concerned are you
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about downward price pressure? eric: there's always going to be that play versus the volume and the price. there's always pricing pressure in industry frankly. that's one of the things that we hope to see as an offset is the growth in the amount of people that they can serve with their products. that is why i think that consolidation and that additional scale helps to offset some of that pricing pressure that is natural within the industry. julia: is transparency a positive thing? can it be a positive thing when you are an investor as you are? eric: it's absolutely critical for us. we are long-term in our thinking. we have seven to eight years in terms of how we hold our companies so we want to see the kinds of transparency that hopefully they can provide, communicating how it is they are dressing their market opportunities. david: how transformative could this announcement be in terms of pricing? zachary: it is one more step in providing transparency to consumers and dismantling these
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secret rebates going on. ,f you are in this supply chain it is one more reason to get worried. you have amazon breathing down your neck and the government saying what is going on here? thaetna: saying themselves that they do have the number of middlemen in the supply chain helps drive up prices. the three have biggest pharmacy benefit managers tied to the three biggest insurers. to some degree 90 million different people. they process $3.5 billion worth of planes coul. something in me how is this consolidation going to help consumers? maybe i am clueless. i am new to the country after all. david: you have to wait for warren buffett, jeff bezos, and jamie dimon to weigh in. annk you very much to sam d zach.
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eric will be staying with us. coming up, for apple, children are the future. the company looks to education to help its fortunes. we will talk about that next. this is bloomberg. ♪
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kailey: this is "bloomberg daybreak." i'm kailey leinz in the hewlett-packard enterprise greener. coming up in the next hour, glenn hubbard, columbia business school dean. ♪ david: the use of technology to address the needs of education has been something of a holy grail, attracting hundreds of millions in investment but yet
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to reach the fullest potential that some people see for it. apple is taking another try. mark is reporting from a new launchinge apple is lot a new initiative. explain what apple is launching today. mark: we are here in chicago, illinois and this is the first time in six years where apple will be holding a media event when it comes to education measures. we expect a platform that ties all the other software that they have had. author andtunes textbook so look for more integrated solution to go against google classroom, which has been dominating the market on crime books, which has 59% of the education tech market. also look for a new ipad and a cheaper model geared toward ethics education.
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it's a faster process over last year's model. it's really geared toward education at lower price to be purchased by student teachers and in bulk as well. david: cheaper was the word that i picked up on because part of the reason why chrome has done so well is that they are much less extensive than the ipad. is there going to be in ipad competitive with the chrome book? mark: they have been much cheaper for many years as long as they have existed, but they are a lower quality product. they are usually plastic waste and sometimes a little tricky to set up and difficult to use. what apple is shooting for is a sweet spot, bringing the ipad up to the education level at their higher-quality standard, but also keeping that price point lower. last year they came out with a $330 ipad. look for an update to that as their education ipad strategy. david: that's the hardware. what of the software? apple did this on an ipad for years ago, a big experiment.
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it fell flat on its face in part because the software was not there. what is the software that is going to run in these new ipads in chicago? mark: that's exactly right coul . the los angeles unified school district along with the chicago public school system had this $1.6 billion deal to outfit every student in the district. we are talking about hundreds of thousands of students with an ipad and it fell apart. apple ended up having to pay a fee to terminate the deal with the school system. the software was not there yet. i'm not sure that has to deal with apple software as the applications were not there yet. we are seeing a new framework for developers called class kit that will allow developers to write applications that andgrate with institutions their education environments right now. david: when they launch this in chicago, do they have the software ready to go or is that yet to come? mark: we are not expecting any
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sort of chicago public school system ipad one-to-one deal like was announced in los angeles a few years ago. at most we will see a deal with the specific high school coming up in the next few weeks or so, but i'm not expecting any particular similar deals to the l.a. unified school district deal today with chicago. david: really appreciate your reporting from chicago. julia: waiting for your software . [laughter] still with us is eric. i know apple is in your portfolio. tell us why this is not just a phone company. eric: it's really an integrated ecosystem company if you think about it between phones and ipads. the other piece that we really like has been the service side. services being 10%-11% of sales, but it's a piece that's growing in really high double-digit rates. julia: i love the way you describe this as well. you talk about this as a repeat business if they can grow it to a greater extent.
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where is that going in portions of the business? #btve a chart here at g 1147 and it illustrates quite cleanly the dependence on the iphone as a portion of revenue. eric: the services piece is really what's going to be the next leg. we think of it as less of a hardware company and really more of a services company. the services is an annuity. it's part of monetizing the customer whether it's through apps or how they interact with their device that really is going to drive that stickiness that the customer stays with the company. they have all that additional cash flow to go to r&d to enhance the ecosystem while doing things with the education side where they can do the right thing to show their products to a broader array of people. david: and every quarterly report apple earnings, we focus on services and their growing that quite fast but from a
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small base. are they gaining market share in terms of services and supplies? are they gaining market share? eric: they are competitive from a market share perspective. it varies in terms of quarter to quarter in terms of how much market share they are gaining. entirelity is the segment is lifting through all the activity whether it's through google and android or apple and its products. there's opportunity for everybody and you can see it every day as we all look at how we interact with our devices . julia: talk about the broader tech space because there's all sorts of questions asked in the last two weeks with the likes of facebook data. apple has a voracious appetite for data collection as well. will there be some response of the political level for all these people in protecting that better? will that impact the business? eric: i think it's only natural when you have these sorts of issues if you will. there's going to be some regulatory oversight. we have been longtime owners of micro-site -- microsoft and they went through a time in the 2000s
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were they were the target of everybody and now they are off everyone's radar. google and facebook are on the radar for the issue. cook: the ceo of apple tim called for data regulation over the weekend. do you agree with them? eric: it's the right thing to do any need to have protections around data. you cannot be out here making promises that your data is fine and go ahead and interact as much as he want because we will protect you. sometimes countries need a little help in that regard. julia: where do you see the price going? eric: we do not have specific price targets necessarily because we are long-term owners. it's really about the prospects for the business. the business for us is very healthy and we think this play a room left for it to continue to run. julia: higher is your answer. eric is staying with us. coming up, what do you do when you have $4 billion worth of clones lying around? that's amazing if they are in your closet but not if you are
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h&m and they are staying in your stores. more on what we are watching with that next. if you have a bloomberg terminal, check out tv . you can watch us online and clicked on our charts and graphics and interact with us directly. just go to tv on your terminal. you can also send us a question. we would love to hear from you j reach us on twitter at chatterley bpg and at david westin. we would love to hear from you. this is bloomberg. ♪
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julia: what i'm watching is h&m. the swedish retailer having a record pilot unseld garments worth a total of more than $4 billion. you can look at the inventory backlogs. what a whopper is the phrase to
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use. still with us is eric scho enstein. thoughts on this one? operating profits falling to the lowest in 16 years. i want to bring in the amazon effect, but i feel like it's a lazy term because there's interest in issues with the business. eric: what are the things you have to think about with retailers is how they manage their inventory. clearly that's what this is. contrast that with someone who is also in that industry that's may be on the lower price point side of things like tjx for instance. tjx is one of our holdings. it has had a track record of having very strong inventory management where the amount of goods that they are actually buying is such that they can control what moves through their stores quickly enough on the turn side of things. it's such that they don't end up with excess inventory. it's clearly an issue that you have to be aware of.
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julia: you have to be ruthless in this kind of retail environment. is that the bottom line? you are saying there's an off price point as well when you're talking about tjx. tj maxx, marshals, and home goods to give a sense of what is underlying those names. is that the future for retail because they are all struggling to some degree? eric: one of the things you did see however recently was that there were good retail numbers coming out of the mainline retailers if you will. that was a downdraft for tjx for people became concerned. tjx may not do as well. their earnings were fairly strong and they saw pretty nice bounce back and the company stock as a result. there is room for both. it's just that they have to get more efficient. they have to be smarter because to use the lazy term, the amazon affect. david: it's a real thing for a lot of people. if you look at a target area like walmart, there's a real
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pressing me to be able to compete with amazon and deliver their goods. does that not apply to tjx and h&m? eric: it's a difference for us in terms of how we look at tjx. we had conversations with the business itself. the products that you might find at a tjx store may not be the same as what you would see on amazon, which is not the case with someone more like a target or walmart or nordstrom's or macy's. what they are buying is perhaps a little bit different and the pricing is maybe not as dramatically different between what you see on the web versus what you see in the stores. julia: it's the luxury end versus the lower end. some of the points you also make is that the relative resilience that these guys have shown even throughout economic cycles as well. how has that been achieved? eric: one of the things they have done that's a little bit different as they did not necessarily have geographic coverage in stores as quickly as others. same-store sales for them is something that they target low
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single-digit growth and square footage growth is something that's also low single-digit . if you do not have too many stores into new places, they also have a habit of putting their stores in lower real estate areas as far as pricing. they are not in the big malls. they can control pricing a little bit differently that with. julia: great to get your insights. eric, thank you for that. coming up on "bloomberg markets," steve forms of federated investors. i will get a quick look at this program. features higher after gains yesterday. that's all from us. from new york, this is bloomberg. ♪ retail.
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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
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near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. >> from their city, from our viewersworld -- for our worldwide, this is the countdown to the open.
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♪ jonathan: coming up, risk assets rebound, the s&p 500 coming off the best of its best day of gains as august of 2015. the calm of 2017 is a distant memory, closing out q1 with volatility. deutsche bank, reportedly considering dropping their ceo. across assets, we are set up like this. treasury as follows on a 10 year reveal. in the fx market, the dollar is stronger at 120 389. once again on the s&p 500, positive by one third of 1%. peopleclusion for many is that volatility is back. the s&p is logging three straight days of moves for the

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