tv Bloomberg Markets Americas Bloomberg June 1, 2018 10:00am-11:00am EDT
to "bloomberg markets." u.s. posts a stellar job report as global leaders react to tariffs. more on that in a moment. first let's get to economic data. abigail doolittle is with us. >> we are looking at them a number for the ism manufacturing report. the number for the month of may coming in at 58.7 versus the 58.2 that the survey was calling for, versus the prior month of april at 57.3. anything above 50 cells -- tells us the economy is growing. together with the strong jobs report, a consistent message of a strong economy. we have the markets trading higher on the solid economic data. the data, s&p 500, and nasdaq
higher on the day. it has been a choppy week. yesterday, the s&p 500 was down .7%, now up .8%. up about 1.2%. investors murmured about the trade war, and today we have some strong economic data. this year's theme of volatility continues. on the week, we are looking at a mixed picture. take a look at the bloomberg. these are the weekly gains and losses for the three major averages. month,ary, a strong declines in volatility in february and march. this is the nasdaq in white, the dow down half a percent. the s&p up by .3% right now. really the first time we have seen this this year, outside of a smaller divergence in may. it will be interesting to see
how this resolves next year. let's look at a few movers on the day. comps came in4%, at 19% versus expectations of 12%. also higher on a strong quarter, up 8%. alta and workday trading lower. alta beat mother guidance was disappointing. caroline: buy that weakness, buy into the stock market in europe at the moment. 19 minutes until the close of trading in europe. check out the imap. what is winning is financials, currently of by 2.5%. let's check at which banks are on the move. the spanish, italian lenders.
we have new leaders in italy, spain, and we see the likes of unicredit higher. banko santander is higher as well. keep an eye on italian and spanish lenders. also keep an eye on banks like deutsche bank. trading higher today, even as we see standard & poor's cut its debt rating. they say the capital is looking relatively good, liquidity is looking pretty good. particularw those stocks in a moment, but we are seeing a good day for financials. it seems as though relief is flooding the market as we had leadership in italy -- still concern that it is populist leadership. we will see spending rises, but better than the worst-case scenario, which of course for italy, was a new overall election. dit is up.
deutsche bank is rising off of that record low we hit yesterday. let's look at another industry group. we have to keep a close eye on another asset class. i am looking at the euro and italian bond. as is where we see the roller coaster week we have had. the euro closing higher. we had a rocky ride at the beginning of the week, italy concerned about the fact that we would not see any leadership, a new election. the euro hit close to lows, but now we are trading up again. new leadership in spain, italy, and the yield spread, the difference between bonds coming down. vonnie: of course, the trump administration firing those shots in what is becoming a trade war, announcing tariffs in steel and aluminum coming from
canada and mexico, and eu exports, and the response has been quick and strong. meanwhile, jim bullard speaking exclusively, had this to say. >> everyone is talking about how trade talks may change world trade arrangements. however, it really comes down to what is actually agreed upon, as far as trade arrangements. i'm not sure in the end that all that much will change. vonnie: we are joined by carlos gutierrez. he is the former u.s. secretary of commerce and former ceo of kellogg. a wonderful person to put some perspective on this. jim bullard trying to dampen down any hysteria, but when you have the european trade commissioners using language like retaliation will be measured, proportionate, she actually said this. when they say america first, we say europe united. it is military language.
how do you negotiate from a position like this? >> it's a good point. it is very hard to negotiate with a country in public when you have a gun to their head. and of course, that gun to the head is all of these carrots -- tarrifs. the question now is will the president that down, can he afford to do that? and what are the risks of backing down, because our credibility, his credibility is on the line. if he continues and does not back down, that we have a real trade war. that will impact not just the world but the u.s. come in may even impact us more than others, because our whole business model relies on inexpensive materials that are put into manufactured goods, and then exported or sold here. caroline: wonderful to have you
joining us. i want to get your sense on taking us back to when your commerce secretary, bringing in landmark free trade deals, with latin america, for example. during the times of the campaigns, you called dollar trends economic policy crazy, a disaster. you stand by those comments? >> i think the trade policy is a disaster, yes. i like trade reform, regulatory reform, but regrettably, the trade policy has the potential to totally undermine any gains made through tax reform or regulatory reform. this is extremely unfortunate. we have opened up three very large fronts. one is that the company other is the european union, and then of course, china. so to carry out those three wars at the same time, i just think it will be devastating for the
world trading system, devastating for our own economy. it will cost us jobs, it will create inflation. tariffsly, these steel will make it too expensive to build a factory in the u.s. my understanding is that all of this was geared toward ringing manufacturing back to the u.s. we are trying to solve the wrong problem, which is the trade deficit, and that is why we are getting into these -- this spiral. somehow, in the administration, there is a belief that the trade deficit is the big number to go after. that will get us in trouble. ofnie: when you draw the ire the canadians, you know there is something off in the global order, you are doing something wrong. is the correct position for europe, canada to maybe not retaliate, be the quintessential free-trade country and just not retaliate? >> i think when you are seeing
in terms of companies taking a position, is that they are pursuing more free trade but not with the u.s. countries around the world are trying to open up new markets, negotiating new free-trade agreements, because what they have learned from this experience is, regrettably, you cannot rely on the u.s. i was just in china couple weeks , and one very senior chinese official said to me, look, the problems we are having with the are teaching us that we have to be more independent from the u.s., that we cannot rely on the u.s. that has been the impact. on the domestic front, these becauses have to react there are domestic considerations.
no one likes to see their government being bullied by trade, even if it is the u.s. domestically, you almost have to respond. yourself, allow politically, from the standpoint of the image and stature of your own country, cannot allow yourself to look weak. that is what is happening here. greate: there is a op-ed today talking about making america 1979 again. there is not much economic logic but there is a political logic. perhaps those americans that president trump was speaking to in the election will think that this will help them, but not in the economic long run. you ran kellogg for a long time. what do you do as a ceo? you are hoping things will be turned the run but it does not
look like they will be anytime soon, so what do you do? the first thing is don't panic, even though there is a lot going on. if we wouldn't have this interview two days ago, we would be talking about something else. in three days, we may be talking about something very different. be careful about making day, strategic decisions that you may not have to make. but definitely have a plan b. this can spiral out of control very, very quickly. but if you start moving supply find anow, you may month, a year from now, that it was not necessary. you have to look at this closely, you have to have a plan b, and be ready to move quickly. caroline: i am looking at a fantastic bloomberg function trade flows.rld
the number one trading partner of the u.s. is, indeed, china. where do you see the relationship going forward for china and the u.s., ceos that are looking there as a supply chain going forward? carlos: this is not good for the relationship, and it hurts. course, are of wondering, as i mentioned before, if they can rely on the u.s., if it is smart to be so dependent on u.s. imports, u.s. inputs for manufactured products. of course, the zte example highlighted this. on the other hand, there will be repercussions on the ground that may not make headlines in the u.s., but will hurt u.s. companies doing business in china. permits that take orger than they should licenses that are withheld, or
joint ventures approved, acquisitions not approved. things of that nature that just life miserable for companies that is a form of retaliation. this is taking the u.s. and china relationship back, it is not good for anything else we are trying to do, whether that is north korea or trade. but if we are looking for a better relationship with china, this is definitely taking us in the wrong direction. the same thing is happening with nafta. the favorability of the u.s. in nafta has gone back down to where it was in the 1980's, when mexico was very protectionist. naftaent back up during to all-time highs, now back down again. this is not good for relationships for anyone in the world. the european union is very disappointed.
so what is happening is, the world is retaliating, and they will continue to retaliate. that will hurt us. if you take the example of steel -- if it is 20% of your cost, you have to raise prices at the --% to keep barges margins even. that is assuming everything else stays the same. if your sales declined as a recall that result of the 5% increase, your margins change. vonnie: mr. gutierrez, thank you for your time. the 35th u.s. commerce secretary, before that, ceo and chairman of kellogg. let's check in with first word news with kailey leinz. >> the u.s. unemployment rate has much the lowest level in almost five decades. the economy added 223,000 jobs in may and the jobless rate fell to 3.8%.
the report reinforces expectations that fed policymakers will raise interest rates when they meet this month. in spain, lawmakers have made it official. they have booted mariana roy from office after losing a no-confidence vote in office, setting the stage for a socialist leader to become prime minister. populist party is in italy will take power today with a program for fiscal expansion that challenges european union rule. is a lawrime minister professor with no political experience. he was born -- sworn in moments ago. will also be guaranteed income for the poor. global news 24 hours a day, on-air, and on tictoc, powered by more than 2700 journalists and analysts in more than 120 countries. i'm kailey leinz. this is bloomberg. caroline: thank you.
lenders rating in the early hours of the morning, following reports its u.s. unit was put on a federal reserve list of problem banks. we are joined by our bloomberg financial regulation reporter from frankfurt. the stocky saw recover somewhat today but this cannot be good news that it is even lower in investment grade territory, tinkering on sub. >> absolutely. the bank is quick to point out they have done a lot of their fundraising for the year in the first quarter already. cut,f you're reading is then you tend to only be able to raise money in the future at a more expensive rate, and that hurts your business. it is clearly a bit of a problem for them. they want to be doing more business, want to get back in the markets. what about the cartel charges coming from the deal they did in australia?
that will be another setback for .he ceo eve >> to me that is more of a headline. -- the lionsre share of their costly settlements are out of the way, the u.s. mortgage probe, libor, and so on. the really big ones that are dragging on profits are gone, but on the reputational side, it does not help if you are dragged through the headlines every day, your staff suffers from that, your clients -- maybe many do not want to do business with that kind of a bank. caroline: the ceo did try to calm employees, sending out in out, saying we have a clear direction for the investment bank. is anybody believing him? point. is a good we have some information on what businesses will be cutting back,
caroline: this is bloomberg markets. i'm caroline hyde. vonnie: i'm vonnie quinn. time for our weekly etf report. let's go to abigail doolittle. abigail: private equity is one of the last frontiers yet to meet democratized by etf's but there are some that come close. here to discuss is eric balchunas. this is so interesting, the idea that you are not able to play private equity through etf. you have an interesting idea. i have brought a couple
blog posts in the past couple of months making the argument that pe is overrated and you can get it through small cap or microcap. these are companies in early stage of growth, not as much analyst coverage, less financial strength. there are a lot of attributes that a private equity investment would have. that followur etf's microcap's. they are not well known and all of the stocks are not in a broad market. kind of a hidden area. the two big ones that people will need to choose from is ishares.the iwc that is your standard play. fdm is a smart beta play. you can see from the number of holdings, only 200 microcap's. it looks for liquidity and fundamentals and picks like an active manager. arele who are posting
saying that active and smart beta is a better way to do micro-casting because there are better ways to find value. the average manager, only 30% beat iwc. fdm is also a decent choice for people. abigail: small-cap is on a tear, up 8%. how are these doing in comparison? are doing really well. one of the reasons is they are protected from the dollar and they are benefiting from tax cuts. we have some research on this from our equity team. they are having a nice surge now, different from how they can be placed in a pe, but there is also some reason to look at them based on current trends this year. is there actually an etf that mimics private equity? eric: no, but there are some that all private and companies.
-- equity companies. they profit from the fees but is not exactly private equity. abigail: great investment insight. thanks for sharing with us. that was eric balchunas. back to you, vonnie. vonnie: we have some breaking news. the petrobras ceo has resigned. of course, in the news earlier this week. on tuesday he pled to protect the bottom line despite the changing political landscape. of course, a nationwide truckers strike and almost all of the presidential candidates oppose petrobras' daily fuel adjustments. this is bloomberg. ♪ ♪
let's get first word news with kailey leinz. kailey: president trump has escalated a standoff with canada about a trade war. prime minister trudeau says any renegotiated deal must be a fair deal or there will be no deal at all. he says talks collapsed when vice president mike pence said that the new agreement should have a sunset clause. an unprecedented intervention into energy markets. the government would use emergency authority to order grid operators to buy electricity from struggling coal and nuclear power plants. it is a move aimed at extending the plant lives. the trump administration has investigations into market rigging that began under the obama justice department. the u.s. opened a criminal probe into whether traders manipulated prices or fannie mae and freddie mac bonds. the focus is on secondary market trades for the mortgage firm's
corporate debt. british household saved less of their income than previously estimated. the government says the savings ratio fell to 6.6%, the lowest since 1971. it fell substantially lower last year. meanwhile, disposable incomes adjusted for inflation also dropped. global news 24 hours a day, on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm kailey leinz. this is bloomberg. adding the u.s. economy 220 3000 jobs in may, unemployment down to 3.8%. month over month average hourly earnings rose .3%. president trump tweeted before the release that he was looking forward to seeing the figures, spurring speculation that the reports would be up eat, and then they were. joining us is diane swonk.
before we get to the nuts and bolts of the jobs report, tell us exactly what was questionable about what the president did. we know that administrations get economic data in advance. >> so does the federal reserve, the night before. the issue is, the u.s. to statistics, they go to great lengths to have them not seen as political, as influenced by political powers. that is why the government itself does not comment on the data until one hour after the data is released. so there is really a long-standing issue out there of , if the data is leaked out, was it sent to anyone else come in detail to anyone else? comment on it before you know what it is, that has the potential to move markets, and importantly, to color the economic statistics come in a political overtone, which agencies go out of their way not to do. these are career bureaucrats.
they spend time they are higher quality economic statistics. you sit around statisticians, there is no conspiracy there. vonnie: i want to ask you about certain aspects of the jobs report. phenomenal topline number and the unemployment rate went down to 3.8%, but we have average hourly earnings up .3%. but on a three-month basis, does not seem to be accelerating. then you have the participation rates actually declining. what is going on with the labor market? diane: there is still ambiguity out there. a solid gain in the labor market, we saw some rebound from some lousy weather earlier in the year, building, material, garden stores got hit with snow in april. surprise in department and general merchandise.
discounters hiring. a lot of them are shoring up their online and in-store pickup , trade-ins, returns, -- it is getting hard to find a cashier in a store. we also have a flurry of store closings coming. news in manufacturing, not as strong as it could've been, but something that we are watching closely is machinery. economy,t in u.s. something we have not seen in the u.s. in a long time. very encouraging, but also an area that is right to be hit by the terrorist being announced. it is important to note that the decline in the participation rate, this is not the same on of plumbing rate we saw in 2000. you have to go back to 1968 to find the rounding of that number at that level. those markets had expanding labor force, participation rising rapidly, and literally pulling people out of the woodwork to participate. very different situation with
rapidly accelerating wage gains. not what we are seeing today. vonnie: we know we only need between 100000 and 130,000 jobs every month to replace those leaving the workforce. does this mean because we have strong headline job growth that we are back to two more rate hikes on the table for the fed? diane: i think we will get two more rate hikes, although the fed really needs to see much more sustained wage growth. this is getting complicated with the tariff situation. at to theen tariffs inflation in the pipeline, steel and aluminum prices, lumber prices all pickup. that is showing up in the manufacturing surveys: beige book, producer price index. that squeeze on margin maybe trading off on wages as producers are paying more for input costs. this is difficult or the fed. junell have to know you in as they raise rates how much will they tolerate in terms of higher inflation to get the
stronger wage gains. their goal is to get wage gains implicitly at 3%. news, buts welcome still not 3% sustained. we are not seeing that broad-based acceleration in weight growth that we need to see out there. would like to dig into the quality of unemployment. i have a chart that i want to show. it is called the jay-z indicator. if you are talking about large money, -- not talking about large money, what is the point? the quality of unemployment is dramatically improving. job leavers as a total percent of unemployment, as a proxy of quits surging. why do you think unemployment is not as good as it was in terms of quality? was betterainly earlier in the expansion, but when you compare it to the boom of the 1990's, the boom of the
1960's, you had many more poor people throw their hat in the ring. the good news is people feel confident about quitting now, and that is great news. they feel as confident as they have since the last recession. remember, this data goes back to that last recession and the last boom, not back into the 1990's, when we were really bringing people out of the woodwork, and women's participation rate was rising instead of declining. we now have a lower participation rate for women in the u.s. than we do in japan and other major countries. that is something that is hard to swallow. it is part of the reason for the women's loss in participation. they take care of the elderly and children when they become unemployed, and that is hard to extract themselves from. caroline: i want to switch gears and get your view on trade. a question coming in. president trump's goal is to
raise u.s. wages. where do you think his perspective is on trade and tariffs are going in terms of wages? diane: we know, historically, morefs have always cost us in wages and jobs that they had gained us. over time, those wages erode because of demand. it costs more to the users, there is a lot more steel and aluminum users out there than producers. alreadyet there is negative. the steel tariffs from the early 2000's cost us 200,000 jobs in the vehicle sector alone. to really understand what is going on, you have to dig deeper. have its downside in displacing workers, which is extremely important, but the solution is not tariffs. the solution is investing in human capital, education, bringing skills up to the level
that we need to hire in better jobs. that loss in productivity growth we have seen, erosion in skills, that is on us. we failed to invest in education, k-12, a printed programs are not out there. there are no incentives for them to be created, like we would like. caroline: here in london looking at what's happening, what a week we have had in terms of europe, italy, spain. the political ramifications and turmoil. what about the economies of europe, how are you even that as we see the with data coming in strong? diane: another issue that has spill over a fax from the tariff s and escalation of trade disputes. people refer to it as a family feud. people, then hatfields and the mccoys was also a family feud, and it can get pretty nasty pretty quickly. everyone knows that one little slight can turn into something that is decades long, sad but true.
expansione european looking like it is cresting, not as robust. that was a surprise last year with how strong it was. now we don't know how strong italy will be committed to staying in the eurozone. also, collateral damage of tariffs to europe more generally. injury adding insult to at a time when they are already vulnerable, increases the risk of contagion that to the u.s. this is all at the same time that some emerging markets are having a hard time with the strength of the dollar, dealing with her own currencies. ,he international situation those risks related to trade are going up. very hard for financial markets to price in because it is an either or.
until today, we have seen the now the markets are thinking, is the administration crying wolf on this, are they going to back off again and not go forward? that is hard to price in. until today, we have seen the administration's bark much less than its bite in terms of protectionism. the problem is the uncertainty associated with this is also having collateral damage on europe and could come back to our own shores. u.s. multinationals in their earningsents of are talking about uncertainty about where to place their b ets going forward. vonnie: thank you so much, diane swonk. caroline: here is what is coming up. walmart's new employee perk. go to college for one dollar a day. we are live at the retail giant annual meeting. vonnie: an exclusive interviews from the g7 finance ministers meeting. now a quick look at the european markets. green in the stoxx
vonnie: breaking news. shares of petrobras lower after the relay controlled oil giant announced the ceo has resigned. he is now the highest profile victim of an 11-day long truckers strike against fuel prices. is one us from sao paulo of our reporters. but said hesigned was defending the company's bottom line, doing the right thing. what caused him to give up the goat? >> that's right, he resigned yesterday, a holiday in brazil. the government announced how they would compensate for the
diesel price cuts that they promised truckers. they also announced a meeting with the president temer. petrobrasne hour ago, released a filing saying that the ceo resigned, gave no other information. vonnie: he was credited with turning around the state-controlled oil company. caroline: do we know who will be taking the helm next? this must be why shares are falling so significantly. know yet, we are still dealing with the breaking news, the shares did take a lot. they were suspended in brazil. in new york down 10%. petrobras did not say who the interim ceo would be. there should be a press conference momentarily to explain. the first reaction we got from analyst and politicians was that this was not good news for petrobras. struggling under the
pricing policy that he had implemented. vonnie: what does this mean going forward for shareholders, debtholders, for the citizens? will there be a different tactic from the interim ceo now? >> that's a good question and it depends on whether he resigned whether he was being pressured to change pricing policy and what this new ceo will be pressured or not into doing. what had been boosting petrobras is they were no longer controlling prices, no longer selling fuel for a long time, losing money compared to international oil and currency prices. we need to see how this policy is moving forward. it is too early to tell at this point. vonnie: thank you, julia. fascinating story that we will keep on top of. the new government in rome promises many sleepless nights for bureaucrats. mike mckee is at the g7
conference in whistler, and british columbia with mr. euro himself. caroline.ou, we are here with mario centeno, the president of the eurogroup ministers. it's been an adjusting year for you. have two last week you new governments, one in italy, one in spain. what can you tell us about what you know about the italian government? >> good morning. this is democracy at play. we have to continue working with all countries in europe to progress in our agenda. i am looking forward to meet the two new finance ministers. it is going to be a continuation of what we have been observing in europe, the agenda, and we have to proceed on the agenda. mike: do you think it will be a
continuation, particularly with italy? the finance minister has written about the need for the country to leave the eurozone. mario: i don't know him personally but we know that italy is the founding father of the european union. the italian perspective on europe is very important. we are going to continue the discussion to make the eurozone .ore robust that is the crucial thing for us. mike: given the remarks that coalition partners have made in the past, writings, are you concerned that italy may be less than enthusiastic about staying in the union? mario: we need to make the eurozone and the euro our common currency a source of enthusiasm for everyone. because it is a crucial element for development of our economies.
i am sure that we will be able to make it. mike: will the eurogroup do anything to convince italy to stay in? particularly thinking of an aid package, for example, with a migrant issue in italy. mario: the political agenda in each of our countries is quite broad. again, we need to make sure that we provide economic conditions for our people, and that is the goal of the discussions we are having in europe. mike: is there an appetite to provide more to italy under the circumstances? mario: the rules that we construct around our common currency arecircumstances? you two -- equal to all member states. we think they have to be applied in a flexible way so that you can adapt to the economic circumstances at any moment in
time. but they are quite robust. i am sure that we will be able to continue this process with italy on board. mike: do you think it slows the pace of reforms in the eurozone if italy is more reluctant? mario: the political cycle in our countries is very important, to promote these decision-making process. i said that at the beginning of the year when i took my position as president of the eurogroup. we have been observing this overlapping of political cycles. these will not stop our work. it has to reinforce it from the position we are in. there is a new government in both spain and italy. we have to work with these governments, and continue our job. position we are in. mike: the spanish government not
as big a change. what do you think of the new administration there? they are more friendly towards eurogroup. mario: this is a domestic issue in spain. the discussion there is not about europe, which is good. but,the discussion there is not about yes, we will continue to work with spain. i have been working closely with the two previous finance ministers of spain. i am sure that it will continue to be like that. mike: the catalan situation has been 10 down for the time being but still exists. you have the populist parties taking over in italy. are you concerned populism is still on the rise in europe? mario: we need to combat populism with pursuing our way, inn a very patient the sense that we need to be quite assertive on pursuing it.
and deal with the aspirations of the cities in a positive way, so that we can really meet those answersons and provide that have the ultimate goal of progress in the european union. e that we are in a very good growth in europe, unemployment is at its lowest level for many years, wages are increasing. these are all good news. growth inwe just have to make d news understandable to everybody economic areathe of the euro with more robust institutions. instabilitylitical
in europe shopping financial markets this week. are you worried at all about the impact on portugal? it is seen by many as the most horrible country to something like that. when you are an economic and monetary union, these types of events when they occur, they spread across the area. when you are an economic some countries, so-called peripheral countries, tend to be at more stake for that. as we also observed today especially, again, there was a strong correction in the markets. i think we need to work from a political perspective to provide confidence to everyone, to all of ourin thissome countries, mt ultimate goal. that will be reassuring for everyone. shifting gears, can you tell me the minister's general
feeling about the united states and terror -- tariffs? mario: this is a situation we regret very much, i must say. amongails a reaction allies, long-term partners on this specific issue that was supposed to bring our economies forward. we all know that trade benefits everyone, if it is fair and free. we need to continue the multilateral discussions with the wto rules behind it. those discussions are very, very important to our future. we must stress that this is the way to go. i am very skeptical that these types of trade wars will come at the end of the day, result in
the expected result for the country that is starting them. it is better for us to be cautious. it make it harder for the finance ministers to work together going forward? mario: not at all. we need to enforce the work we do together, to make sure that we can overcome these situations. it is very regrettable that we hand,th this process at but we need to continue. i'm sure that we will be able to reach a positive outcome to everyone. worried about the imbalances that we have in the world, both economic and social. so we need to work about togeth. mario centeno, thank you
for joining us, the finance minister from portugal, president of the eurogroup. caroline: cautionary words, thank you. next hour, more exclusive interviews. this time, british exchequer philip hammond. meanwhile, european stocks are trading higher. ,e are on to the european close less than 35 minutes until the end of trading. the best day in europe in the stoxx 600 since the beginning of april. banks, miners leading the charge. mark barton is up next with vonnie quinn. this is bloomberg. ♪ .
vonnie quinn and this is the european close on bloomberg markets. mark: here are the top stories we are covering from the bloomberg and around the world. hammondellor philip reacting to the u.s. decision on tariffs and we will speak with him live from canada. more insight from what the rising trade tensions mean for the global economy from the french finance minister bruno le maire. populists surge to power in italy. is out as prime minister of spain as well. have a look at european equities. gmm is the wonderful function with the stocks rallying and the ibex is up.