tv Bloomberg Markets European Open Bloomberg February 4, 2019 2:30am-4:00am EST
the airline cfo tells bloomberg boosting market share remains a priority. julius baer's asset management falls. we hear from the ceo during the next hour. a very good morning. you were rudely cut off talking about as we head toward the european equity markets. matt: nonetheless, i will tell you we are looking right now at a treasury yield that is coming up a little bit as investors selloff the paper. we are seeing some signs of risk on appetite in these markets, although they are few and far between. take a look at futures right now. you see a mixed trade there. not a lot of action this morning. getting a goodot indication of which way markets are going to go this week or even today. text futures little changed as well as ftse futures and cap
futures. what do you see on the gmm? anna: we are lacking news flow. as we have mentioned, asian equities already on holiday. others will be later in the week. lunar new year beckons. that diverts some volumes. this is the picture across the asian equity session. modest gains across the asian equity space. have job data to digest. no real news flow. the dollar did managed to eke out a 0.1% gain. we see some selling in emerging-market currency. the recent comments around powell, that is of course of interest, talking about a lack of news flow, i know you brought
news flow around consolidation. nasdaq making a formal , 152 for the oslo norwegian krone per share. this is a fairly small asset. it is worth less than $1 billion. it is going to be the subject of a bidding war. euronet said it is determined to buy oslo board. you have nasdaq making a formal offer. euronextt -- reaffirming its determination to make a pick -- a purchase. the run to the oslo bores takeover. anna: we have the deals report coming up later in the program. let's talk about the asian
session. asian stocks started the week with modest gains following u.s. economic data. trading is more subdued because of the lunar new year holiday. china, south korea, and others are already closed. let's get into these markets. mark cudmore in singapore joining us. let's take the big picture view. on another occasion, we did not have lunar new year, we might have expected the asian session to be gripped by the positivity of the data we saw on jobs. if we had not just saw the pipit with the fed, that might also have been true. >> overall the backdrop is quite positive for risk assets. cheap for the economic outlook. the economy is not collapsing. it is slowing, but still solid levels.
good, and that was enhanced by the fact we got good data out of the u.s.. this massive pivot from the fed is positive for risk assets. the two flies in the ointment for the whole year perhaps are the fact that the trade war, we still don't have clarity whether there will be a deal between the u.s. and china. there were positive signs last week. people will be a little bit nervous if we don't have a deal closer to the deadline. the other thing is the chinese economy. when will stimulus start supporting growth? when will we see growth bottom out? q2 is probably where we will see the bottom. investors want to see confirmation. the two big risks are china related. we are not expecting much new this week. the markets will be vague in
direction until the lunar new year. more boringis a risk, which is that the economy, the economic growth really just is not there globally or here in europe. on saturday, saying he is worried about a significant risk in terms of government bonds in italy, higher borrowing costs there, and downside risks to the economy. we know that italy is in a recession officially. what do you think of the situation here in europe in terms of the -- now we are in the year of the pig in china. >> unfortunately for you, the real problem with growth is in europe. germany, italy, france, most of the euro zone is struggling. the euro zone is a
disappointment for growth. china is slowing down somewhere like 6% from around six .5%. it is going to have more nominal gdp than any country in the world. it is growing at twice the pace of the u.s.. china is doing ok. india is growing over 7%. most of asia is doing ok. the u.s. is still solid growth, probably over 2% this year. the real pig economically is the euro zone, which is doing terribly. i think there are problems that are going to drive down growth globally, but it's not going to be a recession. anna: let's talk about europe and what drives any prospect of recovery. our markets live question of the indexandy euro stoxx sustain a rally without a recovery in the regions banks? ib+tv if you want to join the conversation. chart which is the
ratio of bank stocks to the euro stoxx and asking whether this will of rebound. it has just hit a record low, and you can see from that chart on your screen at the moment it has completely collapsed after the crisis. intuitive.s is , it was.s. post crisis the banks in europe who bailed out the government's. tltro's were used to buy sovereign bonds in europe. that is why banks in europe are being held down and not looking attractive. ,anks continue to suffer however, it does seem counterintuitive that european equities can do well while european growth is doing poorly in the financial structure -- sector is struggling. the big question is whether the
broader equity market will continue to be dragged down by banks or whether banks will have to start being dragged down by the more positive outlooks from the broader index. i think it is the banks that maybe showing the way even how negative the growth outlook is. more earnings this week from italy and france. matt: good to get your take on this morning. thanks for joining us. mark cudmore is a bloomberg mliv strategist. you can get his work and the rest of the team by typing mliv on your bloomberg terminal. for the first word news we go to dubai. >> the u.k. business secretary has earned theresa may to rule out a note yield brexit. -- says it will not build its plant amid ongoing uncertainty about the u.k.'s split from the eu. ministers are considering withdrawing a 60 million pound
support package for the japanese carmaker. now to trade. donald trump and xi jinping are considering meeting in vietnam at the end of the month. the u.s. and chinese presidents are looking at holding a meeting on february 27 and 28th. president donald trump is standing by his plans to reduce the u.s. military footprint in the middle east, but tessie plans to maintain a presence in iraq to keep tabs on i run. iran.ran -- venezuelans will defend their country in the event of a u.s. invasion according to president nicolas maduro. the leader has rejected an expiring ultimatum from european countries to hold a new election following escalating protests as supporters from both sides marched on the streets. donald trump says military intervention remains an option.
australia's financial industry faces tougher regulation and scrutiny asked the government inquirypted -- from an into misconduct. the australian treasurers says the report is a scathing investment of the financial sector's conduct. indictment of the financial sector's conduct. global news, 24 hours a day on air and @tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. anna: coming up on the european market open, europe's biggest airline says it could miss its downgraded targets if brexit turns out badly. we will discuss results. this is bloomberg. ♪
matt: welcome back to "bloomberg markets: european open." we are 15 minutes away from the start of cash equities trading across europe and the u.k.. you don't see much going on there. not a lot of movement on the futures contracts for any of the major indexes across europe right now. we do not know how this week is going to kick off. a couple of risk on indicators out of treasuries, for example. the yen and gold. we do not see it shining through yet in the european trade.
let's get the bloomberg business flash. >> sony is the latest big tech company to suffer from the slowing global economy. it slumped the most in 3.5 years on weak demand and a low full-year revenue forecast. 660 milliono about dollars for the holiday period is the company saw just over 8 million consoles compared with 9 million a year earlier. jp morgan and morgan stanley are picked for a possible initial public offering of asian operations. it could be one of the biggest sales this year. it could be considering hong kong as a venue. a final decision has not been made. an ipo could raise more than 5 million u.s. dollars. asian sharely three sales top that last year.
wall street firms are preparing to lobby china for changes that would make it easier to short stocks. societe generale says it is among the banks seeking a -- relaxation of rules. bloomberg citigroup and morgan stanley are also pushing for the changes. that is your bloomberg business flash. anna: thank you very much. let's stick with the business news. ryanair cannot rule out further europe'suidance as largest local airline sees a slump in shares amid ongoing brexit uncertainty. the ceo told bloomberg's shareholders may lose voting rights in the event of a no deal divorce. have to beairlines majority by eu nationals. we have a strategy which will enable us to retain that in the event of a hard brexit. what that will involve is that our non-eu shareholders, of
which the u.k. will be part of, will not have voting rights at our agm's for a period of time and will be forced to sell down to eu nationals. anna: for more, we are joined by chris jasper from bloomberg's aviation team. when we talk about disruption from brexit, are we focused on the day-to-day ability to get and keep aircraft in the air? or are we talking about shareholder ownership regulations? >> it is not keeping planes in the air anymore. lately tos are survive even a no deal split. about whatncerned will happen if we head toward a no deal split. they are worried that some of their planes will disappear if there , somethingro parity that would stop people booking
those last few crucial weeks of their financial year. matt: what is this news ryanair is going to name a ceo for each of its units and that michael o'leary will take over as group ceo? >> potentially a big development. michael o'leary has taken something of a step back from things over the past year or two as the labor strike with unions and so on. this is a further development. they have created a group structure, but there will also be a separate airline ceo who will presumably do most of the negotiating with the unions. we can see this as a step back. their chairman, who has been there almost since the ark, actually 20 years, he is standing down at next year's agm
.nd there will be a new ceo we can definitely see this as something of a changing of the guard. michael o'leary might argue it's not quite that way. they are running things from on high for the next five years. but it should ease the situation with unions but also maybe massaging that strategy away from the ultra low cost approach ryan has previously pursued. anna: having him there so long in the role he was, that was controversial with some shareholders. >> he has been a focus for activist investors. they said everyone has been around for too long and they really need a proper shakeup at the top. thanks very much for joining us. a lot to cover today on ryanair. chris jasper from our transport and aviation team at bloomberg. now, we are minutes away from the open. about 10.
minutes to go until the start of equities trading in europe. the lunar new year is over in asia, so we are without some of the signs we get from the asian session. m&aa tadeo is looking at potentially in the logistics space. we have the details from our equities team of julius baer. annmarie hordern is focusing on another twist in another tale. is an m&au said, this story. offer for theck company, but that has been rejected by the biggest shareholders. anna: i saw the sv has also called lower, which is not usually the thing you seem. what's the detail i julius baer? is loweringer
financial targets and announcing cost cuts. markets declined in 2018. we had an interview with the julius baer ceo earlier today and he said the swiss bank is comfortable with the new targets . shares are being called down. anna: we will keep an eye on those. anne-marie about wirecard. this started with a story some time ago that said the share is -- the shares are cratering. they have denied wrongdoing. >> they are saying they found no conclusive finding of criminal misgivings in their offices in singapore. that is where the allegations relate to potential compliant reaches in accounting -- compliance breaches in accounting. the stock is called higher on
this news, up 15% after the ceo talking saying the shareholders have experienced a strong 2019. it has been a twist and turn for this story. anna: thanks very much for joining us. if you want to find out more about stocks we are focused on each day, first to go is the place to go on your bloomberg. keep an eye on circo's contract business. company involved in iron ore, new business there. futures not giving us any big picture items this morning are they? matt: they are not. we have some of the commodities stocks. bhp and rio for example getting downgrades this morning. definitely watch the commodities sector for some of your early movement. those stocks tend to move the stoxx 600 one direction or the other as they are so heavy.
ago. less than minutes welcome to bloomberg markets the european open. we are without a lot of the contribution from asia, many markets closed for the lunar new year. china is closed. this is the picture as we work our way toward the start of equity trading. the euro on the back foot. we will talk more about that. oil getting a bid in the last hour, up around .8%, compared to the close. that's the rent price. -- the brent price. the nikkei is fairly flat. on the pound, brexit looming,
ongoing conversations about where we had next. theresa may gathering those in her party to talk about alternative arrangements. she will not turn up empty-handed in brussels. futures give us little clue as to where we head at the start of the european trading day. let's kick things off in europe. could be an interesting one, given we are without chinese volume and asian volume later in the week. could be interesting in terms of the lunar new year holiday. keep an eye on gold prices. the connection between the physical demand you normally see out of the chinese market. that's one thing we keep an eye on. the ftse 100 fairly muted. let's have a look about where we had in terms of the sector picture. it looks inconclusive. not much of a story. financials fairly mixed, stables fairly mixed, industrials.
health care positive, energy positive, a surprise given we see oil price higher this morning. that's a pretty mixed picture. maybe everyone is still watching the super bowl. matt: maybe people are tired from watching the super bowl, although it's so boring when the patriots, proven to be cheaters, go back and win every year. take a look at what's going on. we've got 317 gainers today, 240 losers right now. so it's a pretty even brett. -- breath. in terms of the movers and shakers, you see the old payments -- old names here. because it's a have a stock, it tends to live the index. you see the oil companies on the winning index. total also gainer. on the losing side, you see reno and bhp. glencore down, as well. you've got the oil stocks
moving, the stoxx 600 up, and you've got the money stocks moving down. anna, what else to you see? let's have a look at the broader picture across these markets. wrapping up the individual stories. dsb and in a peanut moving lower on the difficulty, tying up the m&a story. let's talk big picture in the market in regards to the fed. neel kashkari says chairman jay powell is coming around to a wait and see view. jpmorgan things the hike could shake up the timing of the cycle and 2020 might not be a year to think about recession. joining us now is stephen isaacs from outline capital. very good to have you with us. happy monday. stephen: good morning. anna: interesting to see those comments, 2020 would be premature because of the turn
we've seen from the fed. stephen: i'm impressed they are so precise. it's foolish to make those long-term predictions. you look what's happened, jay powell has reacted to reality. you go back to the beginning of october, which is when the markets beginning of the free swoon in october. at that stage, the fed was in full on hike mode. qt was getting warmed up. that was exacerbated by the december meeting, when they raise rates and kept their foot flat down, all of which in hindsight, and i think the fed would recognize that, was a bit of a mistake. that's been unwound. we now have a situation where the fed is saying we are data dependent. we're going to wait and see. the market has been whipsawed very violently by those moves. the question is, what's going to happen now? and we do have to accept the fed
has been compromised. they missed touch the core and they were open about it. there is a little credibility issue, a problem that's quite difficult to get back. is the fed going to move into easing mode? is the fed going to do what previous administrations have done, which is, at the moment, accord i'd the market? they rush in to defend asset prices. that's where i think it's a bit more complicated. this time around, we're dealing with 4% unemployment. we're dealing with wage growth in the u.s., which is picking up for a tenure high. it's -- 10 year high. it's a different scenario. you are seeing unemployment at 10%, rates much higher. anna: but the underlying economic exchange -- stephen: i think the fed accepted reality that globally, there's been a marked slowdown
from this time last year. it would take a great deal more than the market is expecting for it to actually move from wait and see to easing. anna: matt? matt: i wonder what you think about the fed's achievement. they been able to raise rates, i think nine times, and they are still adding 300,000 jobs and change in the month. -- waget rage inflation inflation at 3.25%, with core pc under 2%. you talk about the previous crises as if we're facing one now, but things seem to be going well and the fed has a ton of ammo. stephen: that's a great point. we in the markets have to differentiate what we see on screen and what is going on in the economy. there was a feeling of crisis before christmas. the 24th of december, 20% down
and one month. 91% of assetces, prices across the board in 2018 were down. in the financial markets, a little crisis, but you make a fair point. the economy is strumming along well. that's why after the fed causes for breath, white the egg off their faces, they are -- wipe the egg off their faces, there is no pressing need for the fed to take further action, would be to ease or into qt. anna: you made the point volatility is here to say -- here to stay. this is a dovish outlook faltering. this is expectation of cuts in interest rates in the market. the market moved quickly to factor in possibility of a rate cut. as you point out, the underlying strength in the economy reminding everyone, hang on a second.
there's a difference between patient and cutting. stephen: u.s. unemployment is up 4% and the economy is continuing to grow jobs. if you look at previous periods of qe and easing, they've all been when unemployment was much higher. the fed has a mandate. part of that mandate is unemployment. if on employment is 4%, effectively full employment, it's the lowest in 40 years. so we've got full employment. is it deflation? not at all. maybe it's under control. there's no concept of deflation. the fed, maybe it's got it right. we'll see. we're floundering in the dark, but the fed seems to have got it right. i can't see for -- further medicine for the markets coming. matt: a lot of people for the left are talking about modern monetary theory and fiscal policy taking over, just
spending as much as they can to dig ditches and fix broken windows. stephen isaacs, we're going to keep you with us to this program. is the chairman of the investment committee, our guest host for the hour. a lot more to talk about, including the stocks on the move. we're going to bring those to you up next, including wirecard. the company stock is up after neither the digital payment foundy nor the law firm conclusive evidence of criminal misconduct. that's a great thing to hear waking up on a monday morning. if you are a shareholder this is bloomberg. ♪
matt: welcome back. this is bloomberg markets. you are watching the european open. 10 minutes into the trading day, a mixed picture. although, more green arrows than red, more gaining stocks that losers. let's get your individual stock stories with annmarie hordern. annmarie: wirecard of more than 7% this morning, nearly 8% if you were a shareholder. good news went enough today as they found no conclusive evidence of misconduct, relating to allegations of fraud in their singapore office. also a strong 2019. dsp to the downside.
to the downside, interesting to see them down. they say they will reject this. that stock down more than 5%. , assetius baer downturns management coming in at 4% below estimates, also cutting guidance. nejra and manus spoke to the ceo. we'll see more throughout the day. anna: thanks very much. interesting stories in the markets, the stoxx 600 entire he -- entirely flat. another blow for britain. nissan scrapped plans to build a new model at its plant in sunderland. ongoing doubts about the u.k. split from the eu factored into the decision, although there were other factors. what does this mean for theresa may as she launches a group today to work on her plan b, the so-called alternative arrangement?
joining us is, thomas. having a bloke -- and the thomas. this -- howow is big a blow is this? emma: certainly a blow to theresa may, partly because she was offering guarantees to nissan about the future. nissaner that letter, announced it would continue investing in the u.k. to some extent, it suggests it's no longer for the car company. could lose quite a lot. it's interesting to note in the northeast, there has been polls in recent months that suggested a slight change of heart about brexit since the referendum. so this comes with just 53 the day andgo until brexit
theresa may trying to find a deal she can get through parliament. today, ministers and manner -- members of the parliament are going to meet across the brexit spectrum. they are going to hash out a compromise on what they are trying to do, and they are trying to rewrite the most toxic part, the irish border. the eu says it won't budge. some skeptical tweeting by the deputy chief negotiator, saying the alternative arrangements the u.k. is talking about simply won't work. matt: this is one of the most interesting developments i've seen in recent days because this shows, the tweet shows that the eu doesn't believe there could be any technical solution within years. so they must have expected the backstop to kick into play. has assaulted eu the arrangement to keep the u.k. in the customs union
semi-permanently, doesn't it? emma: it's what the eu always wanted, the future relationship, the post-transition period relationship, to be a close one. and they had suggested they are quite keen on the u.k. to stay in the customs union. certainly after the deal was reached in november, there was talk in the eu that it has become the basis for the future relationship. you're right. it was always difficult to see how the backstop wouldn't be invoked if the u.k. didn't stay in the customs union beyond transition. this has always been an exercise in kicking the can down the road, getting the deal. and then later on figuring out the future relationship. and perhaps the technology won't exist. everyone is clear at this point it doesn't exist. there is no border in the world with of the technology the progress they are talking about. anna: thank you very much, ammo
ross thomas, our bloomberg editor. stephen still with us. weeks to go until the brexit deadline. you said you do think the chances, correct me if i'm wrong, i think he are suggesting chances of no deal have increased, probably because the role the labour party is playing. explain that. stephen: only weeks to go. that means we've got weeks to go. just want to comment on the timescale, first of all. angela merkel made a few comments what she said eu negotiation is only the last couple of hours things get done. what she was saying is what's pretty obvious to all of us. nothing is going to happen in february. in february, we will be going backwards and forwards with various plans which nobody can understand or accept. anna: do you think we are closer to a no deal?
stephen: i think the timescale is one thing. what did happen the last two or three weeks is that jeremy corbyn showed his hand in a rather oblique way. a lot of commentators, people who hope to brexit would be prevented, have put a lot of faith in the labour party and labor leadership, who played this game, put up a smoke steam -- smokescreen that we are going to a second referendum. we're never going to accept a no deal. i think they've created enough of a story now. what they don't want to do is be blamed for no deal. but the leadership, and let's differentiate the leadership from the party, is very keen on two things. one is no deal, because they want to bring socialism to this country, which you can't do. and two, they actually want this out of the way. that's equally true from
conservative leadership. why would either of the two-party leaderships want to prolong the agony any longer? and for the labour party, they are seeing poll figures start to erode. why? they are divided on brexit. it's quite clear. both party leadership's want to manage the troops in the house of commons. their thinking, let's push this all the way. anna: matt? matt: i wonder if there's any chance of the eu budging on the backstop. i think serena williams tweet makes it clear they play the backstop to hold the u.k. permanently in the customs union. they don't believe there will be another solution. clearly, it would have been invoked, will be if it's taken on. is there any way the eu allows the u.k. out of the backstop? stephen: matt, i love your comment. what you're saying is it was a cynical ploy, a power ploy. i think you're right.
thing that still is the eu plan. will the eu buckle the last minute? that is difficult to answer. i don't think they will. i think they've invested too much political capital and misread the mood, particularly in the labour party. i think they think, and they use this negotiation tactic towards switzerland, towards many different situations when it looked like somebody was going to do the wrong thing, if i may put it broadly. and they've generally been right. they think that will be the case. takepossible, but it would -- it would have to take someone like emmanuel macron, who is a remainder, the whole concept of brexit, to see the economic damage this will work on his fragile political situation in france. it's unlikely, but that's where it would have to come from. matt: all right, we're going to
are: euro area bond markets signaling the ecb may have missed its chance to raise rates. investors are betting on a hike from june 2020. earlier expectations suggested a move this year, including talk from the ecb itself. stephen isaacs, chairman of the investment committee, is still with us. we know that draghi wants to raise rates before his term is up. we know banks have been badgering the ecb to raise rates. environment is not easy to make money in. but will they be able to this year? so,hen: no, i don't think and i think we are looking at his successor. that is the most important prism for us to be looking at euro monetary policy. another interesting commentary, angela merkel.
she she was at davos, what said is what we need to see is a change in interest rate policy, change in outlook for the eurozone. she paid attention to the cost on savers of negative interest rates. was it she putting a marker down for a character to replace draghi? i think she was. the concept there will be another southern european, a goldman alumni who is going to be very aggressive layer, as draghi has done, i think is unlikely. some people talk yens the. i think there's going to be a big change, and that will go for a different monetary policy. anna: do you call for the northern europeans when you want inflation? that's the case. the chart says there's not much to fight. they have barely risen during quantitative easing period. what are the underlying motivations? stephen: we are more talking about if there was another crisis.
we're never too far away from another crisis in euro land. how will the ecb respond to it? one could argue, with draghi, we knew how he would respond, very robustly, several trillion of qe with negative interest rates. the next crisis, we are being slightly unfair but people know person may seeat monetary policy as having unintended consequences, one of which is what happens to european banks. they are doing poorly. deutsche bank is in crisis now. another, where did you go from -40 basis points? i don't know. it takes a lot off the table if there is a change at the helm. i think it's coming and merkel signaled that. matt: so banks are in trouble. europe is a mess.
what about the stuff that we need, the stuff we can't live without, like technology companies? everybody flags them off and they had a rough 2018 and they are having a rough day probably today because of sony, but what about the future of tech? stephen: i think there are winners and losers. i'm glad you brought that up. i would like to return to apple's results last week. apple was very clever at managing expectations. they got the profit warning at the beginning of the month. and then they staked out the results, which were marginal, but only very marginal ahead of expectations. but they want particularly good. that's what worries me about technology companies. you have changes in fashion. you have peak usage, for instance. and there's a good argument to say apple has the tech -- it doesn't have a visionary ceo. where is the next product cycle? this is a problem for apple and
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matt: 30 minutes into the trading day, let's get your top headlines. anything can happen. european stocks and equity futures search for directions. kashkari says chairman powell is coming around to a wait and see view. o'leary ascends. ryanair promotes chief executive to group ceo in a restructuring of the airline. stocks dropped 4% after reporting a quarterly loss. and wirecard goes the other way, surging the digital payments company jumps more than in a decade after finding no conclusive evidence of criminal
misconduct, which is a fantastic message if you are long the stock. welcome to bloomberg markets. this is the european open. i'm matt miller in berlin, alongside anna edwards in london. anna: 30 minutes into the trading day, anything can happen. you look at the stocks that are up versus down, we're pretty divided equally, both around 300. we do get the sense anything can happen later. 16%, denying any criminality, essentially the story, denying criminal conduct. and the stock rebounded. downside, at the another view, the stocks you mentioned in the headlines. julius baer just under 5%. funds under management coming below estimates, cutting down to the medium profit forecast. ryanair holdings changing the
structure. it could be what they have to say about pricing that's weighing in. easyjet down, as well, down 2.4%. ryanair just under 4%. they talked about fare declines and how they might adjust their guidance, defending whether we get brexit turning out badly was the line they used. let's get a bloomberg first word news with desley humphrey in dubai. desley: the u.k. business secretary urge theresa may to rule out a no deal brexit, according to the financial times. the comments come as they won't build the suv in sunderland. it cited ongoing certainty about the split from the eu. the times is reporting they are considering withdrawing a support package for the carmaker. jinping are and xi considering a meeting in vietnam at the end of the month.
the post is reporting the u.s. and chinese president are looking at holding a meeting in denying on the desk in d -- in da nang. he says he intends to maintain a presence in iraq to keep tabs on iran. trump says he will ignore the advice of the intelligence community when it comes to that country. president trump: we were in many, many locations in the middle east, in huge difficulty. every single one of them was caused by the number one terrorist nation in the world, which is iran. so when my intelligence people tell me how wonderful iran is. if you don't mind, i'm just going to go by my own counsel. desley: australia's financial industry faces tougher regulation and more scrutiny, this after the government accepted key recommendations from a year-long inquiry into decades of scandal and misconduct.
rer says thetreasuew report is a scathing denouncement of misconduct. >> the community's trust in our financial institutions has been lost. and this is why it must be restored. today, the banking sector must change and change forever. virginia.ntroversy in governor ralph northern says he will resign over a racist yearbook photo. fellow democrats have called on the governor to step down following a national outcry over photos from a 1984 medical school yearbook. he says the photos are clearly racist and offensive, but denies the people shown in kkk robes and blackface are him. he is weighing options with senior staff. in sports, the patriots beat the
rams 13-3, to win the lowest scoring super bowl ever. tom brady extends his lead for the most super bowl wins for a quarterback to six, the most decorated quarterbacks in history. it wasn't all fun and games. bud light cause controversy. the ad call that competitors for the use of corn syrup, and said corn growers are disappointed in the company. but they say he supports the industry and will continue to invest in it. global news, 24 hours a day on air and at tictoc on twitter, powered by more than 2,700 journalists and analysts in more than 120 countries. i'm desley humphrey. this is bloomberg. matt: desley humphrey with your first word news. juan guaido is calling for a transparent relationship with china, a key investor in the south american nation.
he's also promising any agreements made with the regime of nicolas maduro would be honored as long as they were done lawfully. joining us is roslyn mathieson, executive editor for international editor at bloomberg. what sort of outreach is guaido doing here? what is he went from china? roslyn: he's clearly indicating he wants to talk. a person in the note told us separately that there's been an initial conversations with the chinese embassy in venezuela. the reality is he does need china in some form. it's a buyer of oil. if he does come to power, he's inheriting an economy that's shattered in a country that has long-term infrastructure needs. aidould expect humanitarian and what you need is countries willing to give money for the long-term. that's where china comes in.
it doesn't seek an immediate return on investment. it plays the long game and may be willing to put money in long-term products. that said, he wants a reset in ties. he wants a relationship that's transparent, based on mutual trust, and he wants to examine prior deals to make sure they are legal, which puts a question mark over those. anna: what is he trying to do in terms of the international parties he's a speaking to? he's trying to underlined to china there is an investment imperative, that they need to see investments as having struggles. but he's walking a fine line. he's talking to china, but is also trying to keep the u.s. clearly onside. can he keep both?/ rosalind: that's the question. it's very tricky. venezuela, for a small country, has been significant for geopolitics. you've got russia, china, the u.s., turkey, other countries
jostling for influence. for him, the u.s. is the priority. america for decades under chavez or maduro wasn't interested in venezuela. now it is. they were a proponent for international support. it's been in venezuela's neighborhood. he needs that relationship. at the same time, he needs money from places like china. he needs to be careful not to become a in the dance between the two major powers. responded?hina we heard from maduro he has room -- support from some around the world, including vladimir putin and erdogan. what about president xi? rosalind: china has been careful in his public statements. they don't support interference in another country's affairs. they pointed out they were there butmaduro's inauguration,
they have not specifically said they support maduro and they are keen to talk to geoeye those people. they have supported chavez and maduro, and that's been useful for them, not just financially, but because they like to needle but the u.s. would think of. they are pragmatic. they can afford to let some investments go and it would suit them to stay in the country. anna: taking a nuanced line, asked three times, last week if china saw maduro as president. the foreign ministry noting china attended the inauguration, which is interesting. thank you for the update. roslyn mathieson joining us. up next, we bring you stocks on the move, including the swiss logistics company slumped as the largest stakeholder rejected a $4 billion takeover offer. you might expect the inquiring company to be on the rise, but
not a lot of movement. .1%, as isftse up the ftse mib come along, a little over .2%. the dax is unchanged, and the cac is down. let's get the individual stock movers with annmarie hordern. annmarie: m&a monday comes to a 7%, theo deana down largest sara and -- shareholder rejected a bid. anna makes a great point, usually you would see them higher. but both companies under pressure. right air down, just shy of 4%. they reported more than 19 million euros of a net loss, also citing weaker affairs ahead. -- weaker fares ahead. in the stoxx 600 energy, one of the biggest gainers. we are seeing oil above $63 a barrel on brent. over the weekend, russia says it is cutting more than the
minister estimated. there's a slowdown in production for shale. anna: thank you very much. not much movement as matt said, but fascinating individual stories.let's talk about m&a . a closer look at some of the deals driving these markets. joining us now is ruth david. friend of the show, thank you for coming to see us. let's talk about consolidation. the subject of a bid battle. we've had euro next saying they are committed. what is it they are after? ruth: they get to consolidate changes in their region, and there's the nasdaq, which is what they are looking at. it's interesting because they have the backing of the board, but the euro, which is an investor in the board, has the backing of shareholders. now nasdaq is in this position where has to go to all investors
and try to get approval. but one of the investors has made a bid and it seems the finance industry will have the final say in who wins this battle, because these are seen as strategic assets. but that could take a while. it seems this deal is not over yet and there's no way of telling who is going to win. matt: why is it such an important deal, by the way? this isn't even a billion dollar asset. ruth: yes. and it kind of fits into the larger theme in europe, where we are seeing m&a volumes are down this year in europe, where as they are up in the u.s. and asia. but there are these assets and companies that are quite contested and you are seeing counter bidders coming in. .he panel rejecting an offer you don't know if they are coming in last week.
we have a situation where they have been talking to the packaging firm for weeks and weeks and you had the u.s. company come in, very global, and make a counter bid. the u.s. companies seem like they have a lot of money and investor backing and the advertising to do these. if you look at global m&a volumes, it is the youth markets driving it. anna: it's interesting to me. the offer came from dsp. -- dsv. also, what does that tell us about this particular type of m&a? you would expect the bidding company not having to pay up might go higher. ruth: yes. so there are two options we think could happen. they could come in with a higher offer or they are hearing that there are companies that are not
necessarily in the region, but globally looking to see if they can make this deal happen. the price has been a sticking point. it seems like they might be open to more m&a because they say the growth strategy that includes m&a -- anna: so they might have to pay up? ruth: absolutely. matt: one-month in, what does the m&a picture look like compared to last year? january ind the best nearly two decades. the years in the u.s. that are driving it. it's interesting because at the end of last year, dealmakers were saying appetite is going to be lower and there's going to be more risk, more regulatory hurdles, so you might not see m&a volumes that strong. but january has been a blowout. june was the one that accounted for most of the u.s. line. but in asia, you are seeing a
lot of that. europe has been slower. all these deals, if they happen and we see more consolidation across the big sectors we've been talking about, whether tnt or financials, the big bank mergers, europe could pick up too. seems like a pretty good year sitting where we are. anna: on value, if you look at the geographic breakdown, europe does look like a lagger compared to last year, down 45% compared to this stage last year. ruth: absolutely. and you have to imagine brexit and some of the other political risks around are making inquirers pause before they do the megadeals. ruth, thanks so much for joining us. ruth david from our deals team. if you're a terminals subscriber, check out the newest and biggest deals.
you can even look at the smallest deals, which may be very important right now. just type ma on your bloomberg terminal for a wealth of information, including the league tables. flashing, flows are an encouraging sign for active investing. equity markets absorbed to $5 trillion in a fed powered rally. at the same time, investors are pulling cash from funds. is 2019 the year of the stock ticker? here to explain, to give us the take right now in this age old debate is dani burger. dani: this debate keeps going on. maybe it's premature to say it's for the year, but for the first month, it does let positive for the active manager. here we have etf flows listed. check out what happens in january. $16 billion in a you when pulled from investors. that's a big change because we usually get steady inflows.
in the past, we've seen this. it's only happened two times the past six years. .ypically, stocks are falling in 2014, stocks have fallen 4%. this outflow over here might be investors moving away from passive funds and looking for opportunities in individuals. that picture for stock players is playing out in the data as well. here i have correlation for u.s. and european stocks. look at what is happened recently. correlation stocks are moving the most in a year. this is a lot of economic concerns. then we get powell putting the dovish brakes on. to look at investors other things. we are seeing brokerage accounts saying their clients, bank of america clients, are pulling out of etf's and into individual stocks.
looks like it might be a good set of for stock pickers. anna: the year of the active fight back. dani, thank you very much. dani burger with some great charts. don't forget, plenty of charts available to you. bloomberg users can interact with all the charts on bloomberg tv. gene keady is the function to use. all the ones that matt and i have used throughout the program. more charts coming up next, battle of the charts. this is bloomberg. ♪
matt: welcome back to bloomberg markets. this is the european open, 54 minutes into the trading day. we see red arrows forming across europe with the dax falling .4% just in the last 10 minutes. the cac down almost half a percent. we are finding direction. it is time for battle of the charts. today, and recorder and goes head-to-head with dani burger. -- annmarie hordern goes head-to-head with dani burger. annmarie: gold has been off the radar for some investors, but it's been a different haven. i'm looking at volatility of gold versus energy bonds and stocks. since the start of last year to thursday, it's only moved in a five point range, compared to wider ranges we've seen for
other volatilities tracking, energy bonds and stocks. goal has been up 14% since august. but one reason i want to talk about gold, we're about to enter the period many call a weak part for gold. it gets too big for buyers of china and india come off-line. there could be a reason for some pause and concern as we enter this weak period. anna: i was reading about that, because of the lunar new year. annmarie's got a volatility chart. you've got another. dani: i think these two are perfect because volatility normalization is the story for february so far. i'm looking at the dollar so far. this is one year realize volatility and it has fallen in january, the lowest since july. you can see it picked up into the fed's decision.
the dovish you turn a lot of volatility to come back down. whether it last will be the question. tariff negotiations. this picture might change. for now, a dramatic drop in dollar volatility. anna: thank you both. i'm going to go with dani on this one, volatility. it was interesting in the wake of the payrolls approach, we saw such a muted remove -- muted move in the dollar. to put that up against the strength we've seen in the fed of late. matt: i actually like annmarie's chart. i'm going to go with michael purvis there. i think it's fascinating to watch gold. it raises so many questions as to why it's not moving. but i have had enough of these ties, so i'm just going to go with you and say that dani wins. [laughter] anna: far too much consensus breaking out. put an end to that. thank you to anne-marie and
francine: timing is everything. jpmorgan says the dead -- the feds dovish pivot could push the recession past 2020. president trump strikes a positive tone on talks with lunar yeare approaches. with the year of the pig be a trade deal? ryanair slumps. holds risks from unexpected brexit developments. are non-eu shareholders of which the u.k. will be a part, will not have voting rights for a amount of time yo