tv Bloomberg Markets European Open Bloomberg May 17, 2018 2:30am-4:00am EDT
guy: good morning. welcome to bloomberg markets. this is the european open. we are live in london. i am guy johnson. my coanchor matt miller off today. the cash trade less than 30 minutes away. 3.1 and climbing. treasury yields move higher. jim bullard tells bloomberg the fomc does not have the push -- to push so aggressively or the curve will invert. leaders agree to stick with the iran deal.
believe? we will ask if you today. are inrging markets worse shape than during the global financial crisis of 2008. this is brazil. cutting rates in the real has traded south on that news. the pound is better bid this morning. let's talk about what happened with the markets as we await the start of european trade. we are incredibly flat this morning as you can see. futures telling us we are going nowhere in a hurry. you can see the same thing if you go to your screen on the bloomberg and take a look at your fair values. we are not moving very much this morning. the big story is what is happening with the dollar and the u.s. 10 year. we have a three point one handle. i checked and things are continuing to move. let's take a look at where we are with treasuries. on theies are a little move as you can see. it was a decent move.
we will talk to mark about this. 3.11, that is where we are with treasuries. we are pushing higher. this is yields. this is a selloff. something you need to bear in mind. this is an asset class that is losing value and a lot of value is being lost. italian bonds, this is the picture with the big move yesterday on these comments pre--government europe. a decent move yesterday and this morning yields are pushing up once again. let's get a good first word news update with juliette saly. juliette: u.s. lawmakers have china's top economic adviser to stop unfair trading practices as the nations try to pull back from the brink of a trade conflict. chinese premier is in washington for talks with steven mnuchin. it has been the second visit after a round of movie -- of
meetings in beijing ended in discord. the white house as distance itself from the hard-line korean -- north korean stance of the advisor. attacking john bolton for attempting to force nuclear abandonment and threatening to walk away from next month's summit. the president said korea has not raised concerns about his meeting with kim jong-un. president trump: we have not seen anything, we have not heard anything. we will see what happens. former u.s. secretary of state rex tillerson has taken a veiled shot at president trump, warning that it growing crisis of ethics and integrity has put american democracy at criticized's assaults on facts he said would lead to a loss of freedom added that only societies able to pursue the truth and challenge alternative realities could be truly free.
trump fired tillerson by tweet in mid-march. >> if our leaders seek to can -- conceal the truth or we become accepting of alternative realities that are no longer grounded in facts, then we as american citizens are on a pathway to relinquishing our freedom. reserve'sthe federal dot plot is getting old, so says the president of the federal bank of st. louis. the comments made in an exclusive interview with bloomberg. namingidea that you are the number of rate hikes way out in the future when you do not know what the data is going to be is something we should get out of the business of doing. global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. guy: thank you.
a bit of breaking news, at seven this morning we got the statement relating to what the u.k. is going to do with fixed and theodds terminals mac stake. that is being limited to two pounds. william hill, one of the largest operators of such devices is wheng out and qualifying it sees the impact of that will be. -- will be on its business. reduction in total gaining net to 45%.35% we will talk about this as we look toward the market open in 24 minutes' time. stocks kind of drifting. we are pushing 3.1% on the u.s. 10 year. it raises concerns around risk appetite. joining us from our mliv team, strategist mark cudmore. 3.1, are you worried yet? mark: i am worried for other
assets and this move can continue further. what divides us on the team is how much further it can go. and movings prompted higher in european yields and from technical breaks in u.s. yields. this has not been a fundamentally driven yield. rates, oil isking contained to move higher. there is momentum nine the treasury yields and that will raise the dollar and pressure emerging markets. abouteinhard is worried emerging markets. she talks about the idea that they are in bad shape right now. overreaching?he mark: i think she is. i was trading emerging markets before lehman brothers and it felt worse. since -- we are expecting an end of the world, emerging markets,
they are looking terrible. even though i think we will get more emerging-market pain in the weeks ahead, this is nothing like back then. back then, all emerging markets were on one cycle, there was one game and show, the commodity super cycle and the credit cycle in the u.s. both those things meant emerging markets were connected and when they blew up, they all blew up together. there are several different do enomics in d play. this will be as a buying opportunity by long-term investors. guy: has the pound lift got legs? mark: it does. sold off a long way recently. a has -- the pound has
terrible deficit. i do not think the brexit situation is sorted. the news that he might send a customs union for longer delays the brexit problem. it creates another problem in terms of cabinet turmoil. given the weakness we have seen in the sterling it will be sizable. there is room for reasonable thanks in the next week or two. and is a sell, na there a wider sell here? futureou're seeing that a little bit. i am not sure of a longer-term wider story but it will add to a sustainable move more than btp' s. i hope to these situations with italian politics, these governments do not go down as much as they threatened.
we saw these in the previous prices and saw that in greece, what was threatened in the election was not followed through on. i do not think the btp move is long-term. the euro has more weakness slightly on the back of this. guy: how much more weakness? we have gone 126, 118. we are trading around the 118 level. is there more to come on the downside? mark: probably a chunk more. the moves come quite a long way quite quickly but over the next come -- couple of weeks, yes. whole point is the fundamental drivers of this move remain in place and that is the european growth is disappointing while u.s. growth continued to do better. the diversions of the two on continued on yields to widen and the dollars favor. move is strengthening. the euro-dollar can trade a few cents lower. much.hank you
turning us from our mliv team where he is the macro strategist. you can follow the team and 20 of debate on the mliv blog. check it out at mliv . we have been talking about it, italy in limbo. still waiting for its nest government -- next government. we could see a discussion around italy's representation at the euro level, what does it want to look like, what sort of voice does it want to put out there? we do not know the answers and for where the euro goes next. we will be talking about it. that is next. this is bloomberg. ♪ euro goes next. we will be talking about it. that is next.
guy: 17 minutes till the start of cash trade. let's get a bloomberg miss -- business flash with juliette saly. totale haso tell -- said it is not risking investing in iran unless it can generate a waiver. saying doing business would be too great a risk. the company has large assets in america. as a result it will not commit any more funds to around 11 projects in which it took a controlling stake last year. it has emerged that u.s. regulators have given senior executives at deutsche bank a store -- a stern warning in
march. they were told to act more urgently to fix losses described -- oferies of fit settlements. the revelations underscored the daunting behind the scenes challenge facing the new ceo. representatives for deutsche bank and the new york fed declined to comment. tencent has jumped in hong kong after delivering record profit at top analyst estimates. coming investors who were braced for a big hit to margins. china's largest social media and gaming company posted a faster than percent -- expected jump as growth on mobile bounced back. soothed fearsults that outside spending would hamper profitability. mark zuckerberg is answering ,uestions about privacy issues he may be in brussels for a closed-door session as early as next week. lawmakers called on
zuckerberg to explain how personal data of millions of facebook users ended up in the hands of cambridge analytic up. .- analytica leader saide-star anti-immigranthe league are putting the touches to their program. the two sides have blown through deadlines set by the president. joining us now on set. good morning. market has been an out performer. it is rolling over a little bit. should we worry about what is happening? this was the nightmare scenario markets talked about a couple of months ago. we have to distinguish
between a government and policies that will not necessarily be great for italy. they will be a systemic risk to the broader european system. i think even some of the noises we are hearing coming out of these talks, some of the policies do not sound great for italy, but we are looking at systemic european issues. even some of the policies with regards to more fiscal spending, more help with migration from the eu, they have a point. they have had a mass flood of refugees into italy with the -- and with the balkans shut, there is nowhere for these people to flow onto. if that sounds anti-e.u. and worrying, there could be some good come out of this and it will be surprised how the eu approaches this government and maybe less concentration. guy: what are the market applications? karen: the on going recovery is
in place and the weakness we saw isthe last couple of monthsguye straight to the euro, and italy want to hear a bit more about the scale of these policies. we tend to see these parties, the initial headlines are much worse, their bark is worse than their final i. the underlying foundations there, still early cycle. they are just offloading their loans. that is why the italian government has performed well. bank are getting back on their feet. the drive-by europe over united states -- do i buy europe over the united states? karen: the weakness we saw in the data was the u.s. king strong. -- looking strong. you see that in euro-dollar. i think now if you look at how analysts are forecasting earnings for europe, they have
been up. the potential for upside is much more clear in europe and now it is the u.s.. guy: we were talking to one of is guys and the euro-dollar 116. is that a better entry point? do i judge might entry points based on the single currency? there are plenty of ceos that talk to us, second in line in thethe conversation, my numbers were ok but they are affected by the euro. with a look much better bid? karen: the data i will balance before then so whether it gets that low, to me, what happens in the first six weeks of the year with a euro moving rapidly through 126 at the same time there is talk of a trade war, the exporters in europe did not like that. already the stories are dissipating. i think even in the very near term, we will see some of those
european numbers come back, confidence that the recovery is still on track. i do not see the euro dollar getting that low. cyclicals are starting to underperform. judging from what i am hearing from you, you do not think that trade is, the red channel will be -- not be one the chart continues to occupy. is underpinning europe is the labor market. that is the wage growth improving, consumers feeling better, and this downturn in europe lasted seven or eight years. there is a heck of a lot of pent-up demand for when those people finally go, maybe i am going to keep my job, maybe i can afford that washing machine or that new car. i think that cyclical story has got a long way to run. guy: we will talk to the outgoing deputy at the ecb.
we are going to go through a management change at the ecb, we have a lot of things coming up for the ecb to think about. how does it play that story? karen: we always get too excited about central bank manager changes. look how excited we got about jerome powell and we found that the fed is focused on nurturing that recovery, it is not overly hawkish, it is not symmetric to its language. it is exactly the same as janet yellen said, we will have a change at the ecb, the same problem, there is not enough inflation. i am sure mario draghi would like to leave his legacy. the economy is not ready for it. karen ward will stick around. we will -- we are minutes away from the start of trade. we will look at stocks worth watching. it will see a reduction in total net gaming revenue after the
at william hill, the bookmaker. let's start off with mirsky -- maersk, a miss. >> estimates were looking at a profit of 211 million dollars. take a look at the company's performance over the last three years. you can see we had the chart ready for you, the earnings have not been what we have seen before 2016. year to date, the stock is down more than 6%. what is behind this? the company saying unsatisfying -- unsatisfactory performance. this is below the global demand growth of 3% to 4%. they did maintain their forecast so there is a bright side. he will be speaking to the ceo. looking forward to that conversation. doing business in the states. kroger,set up with
there have been some concerns that they are going to run out of money and cap investors to keep up the automated warehouse is but this comes with a 5% stake and big shortage is the stock will surge. two pounds and that gets multiplied. you: that is the maximum will be able to put into a terminal in a gaming shot -- shop on the high street. the government concerned about the addictive qualities. what impact will this have on the company question mark they are estimating a 35 percent to 45% reduction. similar numbers coming through from power. big moves on the downside. taking a look at fair values, a
we are looking at an incredibly flat session. keep an eye on stocks today. a lot of unchanged around europe this morning. not a lot of action at a headline level. you will see some movers this morning. let's show you the market open. 77-34 is where we are trading. a little bit of ground on the london market. don't expect much. 3/10 of 1%. the pound factor into the mix. flat.pening absolutely cac opening flat as well. dax interesting today. saying, wen union
will back our companies when it comes to dealing with irean. -- with iran. i am wondering whether or not the risk is really worth taking. let's see what is going on in the imap this morning. this is the sector story in terms of the breakdown. soft, care looks staples look soft. that is the picture we are finding ourselves with. financials as they are at a significant track to this market. -- drag to this market. tesco, alldividends, going ex-dividends. let's take a look at the move scrfeeen to give us an idea of what is going on.
this is the picture. let's show you, right. mail?idend, royal i am not sure that is an ex-dividend stock. experience on the upside -- experian on the upside. e.u. leaders are presenting a unified front against the u.s. decision to penalize the bloc, and regarding the iran nuclear deal. bloomberg'sow is richard bravo. what viable options does the european union have face down the u.s. when it comes to sanctions?
it looks like we may have a small communication glitch or a very long delay when it comes to dealing with that hit. talk aake you back and little bit about what is going on with these markets at the moment. a mixed session. the u.k. market is a little softer. there could be a stronger pound we are looking at. we will wait to see how these companies trade. someve early indications are likely to suffer. we are watching our condo -- a rcado very carefully. it has done a deal with krieger in the united states and may have a strong session. , running through the
stories for you. we still don't have a trade here -- we will get some numbers and find out what is going on. i think it is going to be quite a strong open for the upside. moore --to our chief chief market strategist for the u.k. what can we expect from these companies when it comes to doing business in iran? what isry about kind of happening in the oil sector at the moment? is so much higher, that is the place i want to be? >> the latter seems to be overwhelming. it seems we are going to stay in until thisice region uncertainty is resolved.
guy: trade, as we talked about a little earlier. administration in some ways is kind of backing down a little bit. story, we talked a lot about china in the u.s.. we are underplaying this from a trade point of view. this comes from the trade story. we're underestimating the potential from that disagreement. u.s.-china about the spot in the crossfire of that also, how that was going to filter over to the european union and how relations with deteriorate. we're thinking about how the
u.s. administration is going to conduct itself. then we get to discussions and moved turn down and we toward something more constructive. maybe that is the situation with regards to iran. guy: we do have a price on arcado, with a gap significantly higher. it has done a deal with kroger in the u.s. the stock is trading up by 31%. i didn't actually check the shorts. a little bit of a squeeze. let's talk a little bit about what is happening. the u.k. is coming in with a two pound limit. -- william hill, earlier on, quantifying what this will ultimately mean in
terms of the revenue line. this is marking the stock down pretty sharply this morning. is the trade story, it is hard to understand how you are pricing the trade story. what is coming clear is the psychological effects of the ambiguity, highlighting the end thelt, is enough to shake confidence of investors and companies. how do i price that problem? >> you have to go back to the basics. i have to think about the incentives economic if i was the united kingdom, but also the political incentive to take as much further. entrance -- the incentive to
start a trade war were never there. it was about the politics. as we move to the midterms, and needs at government rising stock market. quiteock market made clear it did not like the prospect of a global trade war. tweeted, thee aboutmarket is concerned whether president xi and i will come up with a deal. it was something like, him and i are chums. it is on his radar, absolutely. incentive is to be constructive and negotiate. be final outcome could reduced barriers to do business in china. that would be good for global trade. guy: he is starting to deliver
guy: welcome back. 11 minutes into the trading day. has reported an unexpected isst-quarter loss in what being described as an unsatisfactory performance. of a in the second year historic transformation of its energy units to focus on transport. two businesses to go. we will come back to that in a moment. aersk ceo is on the phone from copenhagen. you talk about the disappointing numbers being put up by the container line. moreou give us a bit detail on what the measures to deal with that include? segment, we have
a cost problem, and too much capacity. we need to take capacity out in order to get our unit costs down. guy: how is that going to work, and how quickly? soren: fairly quickly. we are operating 750 ships in a global network. about half of them are our own. we have quite a fleet in terms of facing capacity. guy: you are going to draw capacity out of the market. what is happening more broadly in terms of global trade? the financial markets are a little worried at the close of trade. this is going to have an impact on this synchronized global growth story. soren? you think,
growth wasal trade somewhere between 3%-4% in the first quarter, in volume terms, broadly in line with the growth fourve seen in the last years. i don't think we have seen growth rate coming off because of trade tensions. by thent is impacted negotiations between the united states and china, on a trade deals, which will have a longer-term effect if it is not resolved quickly. guy: i just want to alert our audience. the pictures we are watching on the screen. the french president, british prime minister, and the german chancellor are walking into sofia this morning. they had dinner last night, talking about whether european protected asld be
a result of the arrival of u.s. sanctions related to the iran trade deal. soren, what are the risks of doing business with iran now? can we get reinsurance and ken ships operate india -- operate i n the space? soren: if the united states imposes sanctions, it would be impossible for any global shipping liner to do business in the united states to serve the iranian market. guy: do you see this becoming a bigger problem? if we are seeing sanctions and trade tensions rising. what is your read as we are talking about this onset? has beenauthority swinging hard when it comes to trade.
soren: if we go back a decade, the world was on a path of liberalizing trade. and so on.d the wto not on a path where there is a lot of new deals being signed. we think that is a very unfortunate development. to make a strong case r through global trade, but the united states has and large trading deficits are not being fairly treated in markets outside the united states. people willexpect be able to come to new agreements that make sense for everyone. guy: when are you going to get a cfo? soren: [laughter]
hopefully, soon. we are in the middle of recruiting. maersk ceo.kou, thank you for your time. let's talk about the other stock stories. we can't talk about stocks this morning without aring 36% tocado, soear the upside. kroger,k a deal with and agreed to buy a stake in the online grocer. it is really a landmark deal. a big licensing agreement and the first four kroger. up nearly 37%. up 8.6%. it added customers in france and european markets for the first quarter. it is winning back market share
as a part of a plan to return the business to earnings growth. investors could be thinking the turnaround plan is taking hold. national grid is also up this morning, 2%. you will be speaking to the ceo later today. is a london-based manager of british power and gas. profits for the full year that meant atul -- average analyst estimates. in thee seeing growth 5%-7% range for the medium-term. guy: thank you. we will be speaking to john pettigrew, the ceo of national grid, joining us at 8:30 a.m. u.k. time. i want to have a conversation with him more about what is happening with the switch in the transport system.
you saw those pictures with the european leaders walking in sofia. you had the french president making comments to reporters. angela merkel was making comments a few months ago. she said the iran deal is not complete, but should remain in place. these leaders will be asking themselves if they can operate in a situation where the european union and united states see things differently. let me bring you some of the comments macron is saying. he is saying iran and trade are separate issues. is saying she wants a permanent u.s. waiver from the tariffs. economies are showing more crises than during the 2008
harvard professor carmen reind hart has strong words about the state of the asset class. says emerging markets are doing worse than in the time of the global financial crisis. she says those cracks are internal and external. you could argue that franklin templeton disagrees. $2.3 billion in bonds were denominated in argentina. this was very similar to what happened in ireland. a time of money was made on the trade. morgan -- carol from j.p. morgan asset management is still with us. off, ourap gets turned
people out of position? -- are people out of position? >> we can talk about emerging markets as a bucket -- can't talk about emerging markets as a bucket. people do and don't differentiate. if you look at argentina, everyone is out of emerging markets. if you look at china, profits you look atg, as its social media ecosystem and all the stuff it can sell. guy: a big selloff has come forward. karen: china it is absolutely certainbedrock for parts of the emerging world. china still has potential growth of more than 5% for the next decade target you think about how -- for the next decade.
you think about how it is being shaped by technology. that is one component of the weight you trade p.m. -- way you trade e.m. then, you have who is vulnerable to the higher oil prices. those are the ones who are suffering in this environment. story. not a broad em is when the market doesn't differentiate with swings like this, and forgets the underlying growth story. guy: a lot of emerging markets -- i take your point about china -- have a lot of dollar debt. karen: we look at how they built up reserves in the past five or six years. they can support themselves light,t any capital outf
much better than it was a few years ago. you have to do your homework on each country. talking puppy about emerging markets in this way will not make you any money. ly about emerging markets in this way will not make you any money. guy: the amount of denominated debt in indonesia was eye adorationthe absolute of the financial sector. now, not so much. karen you: -- karen: you have to do your homework on each individual place. guy: the dollar is a big part of all of this. karen ward, you will stay with us.
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30 minutes into the trading day. says brexit will have to push through if it is going to invert the curve. ceos believe their companies will be protected from the iran nuclear deal? soars after a landmark deal to license its technology to kruger. welcome to bloomberg markets. this is the european open. let's talk about that ocado
trade. 42%. is trading up by quite an aggressive mood -- move. i imagine there is a little bit of a squeeze factor. the stock continues that up 42.14%. is convincing the , let's talk altice about the bottom end of the markets. aersk, talking to the ceo about short-term changes that can be made in the way it uses its vessels. oren told us that a few minutes ago, but the stock is trading down this morning.
there are a few other exit-dividends businesses in the vidends-- ex-di businesses in the market. william hill trading down. let's get a first word news update. nations try to pull back from the brink of a trade conflict. the chinese vice premier is in washington with talks with steve mnuchin this week. it is his second visit here after an earlier round of meetings in beijing. the white house has distanced the north korea summit. sarah huckabee sanders says john bolton has tried to force a nuclear abandonment. the trump white house says it has not abandoned its meeting with kim jong-un. >> we will see what happens.
hong kong intervenes in its currency for the second day after the city dollar -- city's dollar fell. it spent $1.2 billion of its local currency overnight. low rates in the united states has made the hong kong dollar an attractive target for shorting. argument between thes to populist leaders who want to form the new italian government continued last night. it has been more than two months since the election. global news on air, 24 hours a day and at tic toc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. cado's outstanding
shares are shorted out. still a decent squeeze potential. d from j.p. morgan asset management is still what us. on newsl the footside the pound is going up? aren: so many stories with brexit. we treated earnings suffer when you have a higher sterling. -- repatriated earnings suffer when you have a higher sterling. footsie, buy the 250. karen: otherwise, you will see the biggest winners and losers. also, auto prices are justifying those high-dividents. .rexit, sterling, footsie
too much happening. the u.k.data out of economy is in a difficult place, putting brexit to one side -- how big an opportunity is there? is the data going to come back, turn, so i can have a better feeling when it comes to some of these retailers? karen: the opportunities in the u.k. market are massive. you have full-time employment greater than 2% in the latest data. that is not a soft patch. --ot of weakness is related it is going to come back naturally. the housing market is looking a little bit soft, but it has sustained itself well. are ambitious for more
affordable housing in the u.k. is a slow process may not be a bad thing, especially for the youngest. the outlook on an underlying basis is still strong and i think we will get a brexit deal. by the end of the year, as we go into next year with a higher wages will tick up and the outlook of the u.k. consumer changes dramatically into next year, as does the bank of england. it will be exciting. guy: we shall leave it on that note, karen ward. exciting times ahead. let's turn our attention to the united states. is it time to give up on fed bonds? greenspan was famous for
deliberately opaque remarks -- me,ou think you understand you clearly didn't hear me right. bullard speaks in an exclusive interview. when you are predicting rate hikes when you don't know what the future is going to be is something we need to get out of the business of doing. be in going to restrictive territory, which is going to put downward pressure on inflation. do you want to do that when inflation expectations are hovering below targets? it means the market has a different view of the future than the fed. think we are in any danger sitting here that the yield curve -- sitting here today. the yield curve has a nice, upper slope, over the last 30
concerned i would be if we did not march into an immersion with our eyes being wide open. guy: james bullard speaking to kathleen hays. we need to talk about the dot curve, so we are now -- do we get much higher? >> i think this is the end of the move, rather than the beginning. we could do 3.25%. the problem the market is going to face right now, there is survey data, soft data, through the roof. everything is great and we are going to get inflation. then there is hardly data, not quite materializing. if we don't get that real sign of inflation coming back, not
just expectations, we will probably find the ceiling around 3.25% difficult to move forward. guy: sitting on the side of the atlantic, the united states is like a different world right now. data is solid. even hard data doesn't look too bad. bund is at 6.25%. treasuries are at 3.1%. are we done with synchronized growth? jim: yes. about the strong as point in the world is the united states. the united states is very strong and optimistic. taxunited states has the cuts and everyone going. global synchronized growth was the story for 2016 and 2017. we don't have that now. niche trends show there is talk about it. we are not going into the recession in anything -- or
anything and continental europe is decelerating right now. we don't have global synchronized growth. think about it as a sporting event. we are going to start at the world record. we expect something big and no one clears it. we expect big growth numbers coming out of the united states, and the world. we are going to come up short of that if we are moderating and wind up disappointed. guy: what kind of inflation will we get in the states? lumber prices are going through the roof, brent is approaching 80. what is it going to take to get inflation going? jim if you look at: the economic data, the stimulus for the central bank, the fed, over the last seven years, you would have included that the inflation would have started 3-6 years
ago. it hasn't started. everyone is expecting inflation because surveys are saying it is coming, but they haven't caught a track record. maybe we will trade up to around 2%, but we won't go much beyond that. the market is expecting more. most are expecting five rate hikes because of inflation, but the was for is that it might be six or seven as opposed to -- the whisper is that it might be six or seven as opposed to three or four. guy: does this feel like the really good bit at the moment? jim: if you are looking at it through an equity lens, it must be disappointing. if you look at the eight or nine you were covering, the best revenues and outlook ever. you are unchanged on the year after having a 10% direction. a lot of that good news was
already priced into the market. the fed is raising rates, the yield curve is flattening, whispers we might see an inversion in one year if the fed continues to go five more rate hikes. that has never been good for equities. that is why it is struggling. good news for equities already happened two months ago. if you are wondering what the market is worrying about, look at the yield curve and higher rates. guy: when you guys come over from the states and you are in europe and watching what is happening over here, when you talk about what is going on here, what are you saying about what is happening? you gave us a hint of things are slowing. is it a soft patch or something more sustainable? jim: maybe it is a soft enough ecb does not throw
away it spaper in september. in september. hedge fund managers are wildly optimistic because the u.s. is the strongest point in the world. when you tell them things are slowing down in other regions, the american to find investor is american fund investor is misleading that because they think everything is great. there is a divergence opening up. you.jim bianco, thank i want to check on what is happening with etp -- btp. it is trading at 2.1% in italy. you can see my chart. this is italy's dimaio, and the starter meeting on that government plan. 2.1% -- if i could show you this chart, it shows you the
guy: welcome back. you are watching the european market open. 47 minutes into the trade. growthpany says it's projection for the medium term was at the top end of the forecast and on line with estimates. midterm growth will be at least 27%. joining us now is the national grid ceo, john pettigrew. that growth number you are much of that, how going forward will be generated out of gas, and out of electricity? john: we are announcing our results for the year.
strong operations and financial performance, up 6%. it has been underwritten by very about $4.3stments, billion. that is a mix of strong growth in the united states and the united kingdom, particularly the united states, with a growth of 7%. we are seeing strong growth on the downside in the united states. side, weited kingdom are stronger on the electricity side. uy: on the uk's side, does that trend continue? do you see that story continuing, the electricity side is going to add more value to the business? john: over the last five years, we have been investing about 1.3 billion pounds per year.
that has helped us grow about 5%. we expect that to help us grow in the medium term. our electricity network is bigger than our guest network and it takes more to help make and it takesetwork more to help us make sure it is reliable. you see the operating environment being like to the united states as a moment go the united states feels like a different place in terms of the growth data being generated -- at the moment? ae united states feels like different place in terms of the growth data being generated. hn: the need for investment has been realized by regulators and politicians. we are seeing strong investment for safety reasons. with the changes we are seeing in the energy sector, we are seeing a try for investment to support renewable and connected
drive for- a investment to support renewable and connected networks. this has led to a 7% growth over the medium term. guy: is there a tax advantage to that story as well? john: with the tax reform coming tax reform is neutral in terms of the economics. been a production from 35%-20 1% -- 35%-21%. customers see the benefit and it creates headroom to allow for further investment. guy: i am curious how this data is coming through in the u k and around the world. we have spoken in the past about the electrification of the transport network. rb ahead of ourselves -- are we ahead of ourselves?
you are the guy that is going to make this happen. john: we have put a lot of work into this. you're talking about purity, the price of electric cars -- parity, the price of electric cars versus internal combustion engines. we have been thinking about networks to support ev's. we have had discussions with the u.k. government about creating a charging superhighway across the country so people who have concerns about longer distances and not being able to charge their cars will be relieved. over the next few years, we will work on that and if we can do that, we will encourage people to buy ev's going forward. y: trading up around 1%, john pettigrew, national grid ceo. company won as
440 million euro contract to own and operate waste treatment lance -- plants in china. william hill, leading bookmakers to the downside, after a drastic reduction in the united kingdom. will now be two pounds, as opposed to 100 pounds. ill seeing a reduction in total gaming the revenue of as much as 45%. all the bookmakers are down, but william hill is leading them. down 4.5%.is they sawny has said volume declined 4.6% for the missednd they have estimates. and the u.k. data protection regulations will hurt letter demand. : bloomberg users can
thursday morning. a pretty sunny day. ocado stock is the stock of the hour. it is driving sharply higher. want to know what is tracking in the u.s. meant for ocado and its shareholders, you have a good idea. the deal with kroger is having a massive impact on its stock. a 20% short interest story. there may be a squeeze in it this morning, but you have never seen anything like this in terms of ocado stock. it is trading on big volume as well. the market is latching on to this story. you have six buys, a bunch of holds as well, seven holds, four
francine: trade talks in washington. steve mnuchin begins two days of negotiations with china after trump -- what are the chances of seeking a deal. italy's waiting game is caught between the two leaders. when we will -- when will five-star come to an agreement? theresa may's cabinet may be planning on staying in the customs union as a last resort until an irish border solution can be found. ♪ francine: good morning. welcome to "bloomberg surveillance."