tv Bloomberg Markets Americas Bloomberg February 6, 2019 10:00am-11:01am EST
vonnie: it is 30 minutes into the trading day in the united states. guy: welcome to "bloomberg markets." vonnie: stocks slightly lower after the state of the union address, but also some earnings reports and individual stories. s&p 500 down 2/10 of 1%. take two interactive really feeling the heat from "fortnite." different story for skyworks solutions. price target upgrade at goldman today. the idea out there that it might be a bridge to a better 5g network across the united states. guy: let's take a look at what we are seeing on the side of the atlantic. we are seeing very weak german data today when it comes to factory orders. a year on your number of -7%.
that is a dramatic downturn for the german economy. most of that comes from outside the euro zone. that is why the dax is weakening up a little bit today. we've seen a spectacular italian 30 year auction today. a syndicated loan on the back of the derated story, and the market took it down in massive size today. what you then get is a portfolio effect into the existing secondary market. that is what you are seeing today. we are seeing the bond market turned negative, yields rising on the back end of the italian curve. tomorrow we may get more details from the european commission on whether or not it is going to downgrade the forecast for its expectations when it comes to italian growth. the other thing i want to mention is this screeching u-turn, some would argue, similar to the fed coming out of the rba and australia. a huge move being represented in the aussie as well. there is a segue into what is happening with the mining
segment right now. this is the european mining flirting with pb a bull market. we are seeing a huge updraft in the price of iron ore. if you take a look at the rsi, we are firmly back in overboard territory. vonnie: president trump's state of the union address talked up by partisanship while sticking with white house demands to build a border wall. have a listen. pres. trump: we must reject the politics of revenge, resistance, and retribution and embrace the boundless potential of cooperation, compromise, and the common good. now republicans and democrats must join forces again to confront an urgent national crisis. we have a moral duty to create
an immigration system that protects the lives and jobs of our citizens. in the past, most of the people in this room voted for eyewall -- for a wall. but the proper wall never got built. i will get it built. [applause] vonnie: so potentially no talk of increased tensions, not dropping the talk of the wall. new?e hear anything let's ask the head of u.s. global policy at micro corner strategies. what did you hear from the president last night? guest: i don't think we heard very much that was new in terms of substantive policy proposals. nothing new on drug prices were infrastructure, but he did mention them. he did mention nafta as well. i thought it was somewhat
notable he mentioned specifically with regard to china that we need structural reforms in order to get a deal. that seems to be a tougher stance than the tweets last week. what was new was the bipartisan tone. we will see whether that lasts from the president, and whether that really translates into legislation. i am kind of skeptical of that. vonnie: on the structural reform needed out of china, what structural reforms is he particularly thinking of? is it just ip, or is it other things with the currency, with the market opening up? will china provide that this month? guest: i doubt that they will. i think what he's interested in, and what robert lighthizer as mentioned before, is things like subsidies to state owned enterprises, disco editorial practices that favor chinese companies over foreign -- discriminatory practices that favor chinese companies over foreign competitors.
these are the things the u.s. has been demanding. i don't think china is prepared to do that, so if there is going to be a deal arch first or around that time, it will probably be the president except in some deal that doesn't match the demands he's been making over the last year or two years. guy: was there anything in the speech that you didn't expect? was there anything that wasn't mentioned that you didn't expect? were there things that you thought should have been in there? guest: i thought maybe would get more specific on the things he wants to get done. criteria, ford of example, on drug prices or infrastructure just to set a framework for what a deal could look like. give some direction to congress, lay down some markers about what a package he would find acceptable would look like. it didn't surprise me that he didn't do those things, but i think it didn't help the effort if he wants to get those things done. just mentioning drug prices are too high, we want to get them
lower. foreign countries are taking advantage of us. that doesn't give a framework for how we move forward with legislation. what does that legislation look like? guy: does the lack of detail signal a presidency in crisis, do you think? do you think this is a presidency that has run out of ideas, or run out of an ability to find a way of making those ideas a reality? guest: i wouldn't say that. i think it is going to be very difficult because of a divided government and the toxic environment in washington, but i think the bigger problem with the administration from the beginning is that presidents who are successful pick a couple of top priorities and really focus on those things. they work with people on both sides of the aisle. the president puts his own personal effort and energy into that. you just don't see that. , it's not really a presidency in crisis. i think it is a presidency that
isn't doing the groundwork to have legislative successes. i think that has been president's weakness and continues to be his weakness in terms of passing legislation. vonnie: the second state of the union is oftentimes the beginning of the reelection campaign. did you hear anything that may be the president is using for some speech potentially? guest: i think one of the things that will be interesting, will the president have successes on things like drug prices or infrastructure or trade going into the election? this will be part of his stump speech one way or the other in 2020, but it will be elect republicans and we can do some of the things, or i got these things done. but obviously, the immigration issue was a major theme. i don't think he's going to get very much of the way of even border security, never mind wall money, so i think that is going
to be a major theme in 2020. if the president talks about it in a slightly different way, i think it is a winning issue for him. there's a less divisive way about highlighting concerns for the border. i think we saw a little bit of that last night. he took a step in that direction, but i think he could go a lot further to have broader appeal for that message. vonnie: what did you make of the democratic response? did you hear anything that might put a light under the democrats? guest: you know, i think -- the president is so unpopular among democrats. democrats don't trust the president. i think they are going to have a very hard time corralling votes for anything the president is in favor of. personally i am below 5050 that we are going to see any kind of drug price legislation that is meaningful, or even an infrastructure package that is meaningful. the way those things could get done is that the president accepts democratic ideas, but
issues where you really need a lot of cooperation, complicated issues where both sides have to give and take, i am just skeptical that we are going to see much of that in the next year and a half, two years. vonnie: thank you for joining us. andy is head of u.s. global policy at cornerstone macro. he is in our d.c. studio. let's check on the bloomberg first word news with kailey leinz. kailey: sticking with the state of the union last night, and the address the president announced plans for his second summit with north korean leader kim jong-un. pres. trump: if i had not been elected president of the united states, we would right now, in my opinion, be in a major war with north korea. much work remains to be done, but my relationship with kim jong-un is a good one. will meetim and i again on february 27 and 28 in vietnam. kailey: since the first summit
last june, little progress has been made to get north korea to give up nuclear weapon. meanwhile, president will meet with leaders from other nato countries in a summit in december. the meeting is set for london. president trump has been critical of nato and urged members to boost military spending. investor appetite for italian bonds show little signs of letting up from a record-breaking deal three weeks ago. it was priced $9.1 billion of bonds this year. orders surpassed $47 billion. 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. guy: thank you very much indeed. coming up, we are going to hear from the cfo of gm. the call has just started. the company reporting earnings a little earlier on. if you want to follow along with that call, you can do so on your bloomberg.
look in the bloomberg, a great way to see what is happening for any index on a sector basis. we see all 11 of the s&p 500 sectors are lower. up top, consumer staples. that defensive sector down fractionally. on that, someg gaming names such as electronic arts and take-two. all of those names down more than 10%. activision down almost 10% in sympathy. where we had a pocket of strength not just in the u.s., , appleo for european suppliers up about 12%. they just beat estimates ever so slightly. considering apple has been in a world of trouble relative to the iphone, investors seem relieved by the fact that they made numbers, plus a $200 million buyback. of course, ams up 10%.
they missed numbers. they also guided down, but investors are looking past that. guy: it is interesting. ubisoft on this side of the atlantic taking a slower on one of the worst performing stocks in europe. the gm earnings call is underway. we spoke to the automaker's cfo. >> there was a strong quarter and a strong year. eight percent margins, and strength across the board and most of our operating segments. north america was very strong as well, with 10.2% margins. $2 billion of equity income in china for the year, despite the challenges we are facing, as well as gm financial performance at record for the quarter as well. howou take a look at
results came about, a lot of it strength andped by our new truck launch, which has gone exceptionally well. we delivered 75,000 of our light duty trucks in the quarter, and they were received really well and held on a price perspective. our crossovers, which we launched in late 2017, continued to perform really well. we have an intense focus on cost and execution, and you can see that flow through into north american results. really that all of this points to, in an environment where you see commodity challenges and foreign-exchange challenges, the earnings resiliency of the company and our execution in this environment. david: it is fascinating you point that out because there were a lot of headwinds, and for all of the auto industry, some difficulty in the market. costs going up, dickel he was
trade. how much was pricing -- difficulties with trade. how much was pricing, particularly with the trucks and crossovers you mentioned? guest: let me step back and give you the headwind perspective. we faced over $1 billion of commodity headwind for the year and foreign-exchange challenges in south america as well. . but against that, but we are seeing is from volume, to your point, volume was up in the fourth quarter with the rollout of our new trucks. pricing was a big factor. we are continuing to see discipline in our own pricing, as well as this plan from a perspective of cell down of the old trucks as well. cost optimization played into that as well. you put all of that together, we saw some pretty big challenges, but we were able to offset that
through execution. david: take that and apply it to china, which you mentioned. as i understand, you had some real softness in units sold overall in the market there, down for the first time in 10 years. and yet, you sold a lot more cadillacs. are you making up in price what you might be losing in volume? guest: i would say in china, if you take a step back, fourth quarter was a volatile quarter for the entire industry. what we were faced with was, and addition to the volume pressure, the normal pricing pressure you see in china as well. against that, as you point out, cadillac sales performed really well, as well as our cost efficiencies i've talked about before. we continue to be intensely focused on cost in china. that helped for the quarter. i think it is important to note if you look at our results from q4 in china, there were aspects specific to that quarter. because of our launch activity, launch costs were elevated.
we took some production actions to make sure we were positioned well for 2019 as well. all of that flowing into our q4 results, that is what you see in the outcome for china. as we look at 2019, i think we are positioned well into the new launch we are going to have. we have 20 new launch is coming up in china, as well as continuing on the catholic momentum to offset -- the cadillac momentum to offset some of the changes we might see in china. guy: gm cfo speaking to david westin earlier on. the call is underway. we are monitoring it. you can follow along as well on your bloomberg terminal, tliv. vonnie: it is time for our latest bloomberg business flash. tesla is cutting the price of its model three sedan. all versions of the electric car will now cost $1100 less, bringing the base price to just
under $43,000. tesla says the cost cuts will offset the end of a customer referral program that was moved -- that would move costly incentives. musk led talks on production of an electric van. mayor -- theya parent of mercedes-benz expects earnings to bounce back this year after profit slumped in 2018. they say profit will rise slightly. the company is coming off a year in which it struggled with the u.s./china trade war, bottlenecks in europe, and rising expenses to develop electric vehicles. and that is your latest bloomberg business flash. coming up, we are going to hear from my interview with evercore
♪ vonnie: it's time now for our muni moment. a new outlook for economic growth. let's get to taylor riggs for more. taylor: joining me is the head of analytics and research at s&p public finance. thanks for joining me. in your latest report, you talk a little bit about slowing economic growth in the next few years. how does that change your view on state revenue? guest: we did just finish all of our outlooks, and we spent a lot of time throughout all of the different sectors looking at when the cycle turns. 2018 was an anomaly. a real surgeon economic activity for states.
we tend to look at a weaning falling revenues first. we think 2019 will but to me -- will be a much slower economic growth period. the reason why we focus on stakes is because they tend to impact all of the other sectors. taylor: you talk about impacting all of the other sectors. one of those down into the local sector, and a lot of those paced a little more pressure. how does this affect local municipalities as well? guest: states, one of their great areas of flux ability is they need to downstream any challenges they have on the revenue side. we have seen that over and over during cycles. but this recovery period in a record phase correctly, and this year may either tearing point -- may be the turning point, it has been a very different recovery. it has brought a lot of austerity you don't typically see in economic growth. there hasn't been a big surge in
spending you typically see on the stateside, and that has affected locals. taylor: i want to talk about stress within states. some of that comes from pension liability. we talk about how liability expenditures outpace revenue. windows the rubber finally meet the road on when a state really has to deal with this issue? guest: it is interesting. you are in media, and it has been a front-page headline issue for the last 10 years. i think the fact that it has sustained means the rubber is hitting the road for many governments, and this silver is reallyat is coming going to accelerate some of that pension liability and retired health liabilities that have been outstanding for most governments. i think for many, the time is now. if not now, the choices that they are making now, and you go with what funding choices they make, if not this year, then in
future years will continue to be a real hot button issue. taylor: we will be watching this closely, for sure. thank you. s&p was robin prunty, the public finance head of analytics and research. vonnie: breaking news on jcpenney. the stock is down about 3% off of lows earlier. it has announced it will stop selling furniture in stores. it will continue to sell furniture, but online only. those changes will be effective at the end of this month. it is interesting because the footprint for these retailers is declining, and it looks like there might be an opportunity for jcpenney with sears closing doors, but now jcpenney seems to be closing doors. this is bloomberg. this isn't just any moving day.
show me decorating shows. this is staying connected with xfinity to make moving... simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today. ♪ guy: live from london, i'm guy johnson. vonnie: live from new york, i'm vonnie quinn.
let's get a quick check on oil prices. they have been pretty volatile. wti down 1%. the market is looking for a build of 1.4 2 million barrels. wendy to permit of energy 1.42ses those numbers -- million barrels when the department releases those numbers. oilsitive number on crude inventories. a bit more of a decline then the industry was looking for. gasoline inventory rose, and in terms of distillates, once again we had a build of 5.90. afinery utilization was positive number, .6%. let's take a quick look at how prices have been adjusting. 41, brent at $61.74.
guy: let's get the first word news. here's kailey leinz. kailey: the u.s. trade deficit shrank from almost $66 billion to a little more than $49 billion. exports fell a little less than 3%. president trump talked trade in last night's state of the union. he vowed to get a fair deal with china. pres. trump: i have great respect for president xi and we are working on a new trade deal with china, but it must include real, structural change to end unfair trade practices, reduce our chronic trade deficit , and protect american jobs. [applause] kailey: the house intelligence today to sendcts
documents from its investigation to special counsel robert mueller. the panel once him to consider whether additional perjury charges are warranted after president trump criticized what he called "ridiculous partisan investigations because put in his state of the union speech. more signs that -- investigations" in his state of the union speech. deutsche bank is making the case that the german economy is threatening a recession. leader of thethey national assembly has called on the military to advance on president maduro. even before that, venezuelan soldiers were defecting in 6% of venezuela's troop strength. 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. guy: thank you very much indeed. as kaylee just mentioned, the drop in german factory orders led to a string of disappointing data out of europe and around the world as well. joining us is tracy mcmillan, head of global asset strategy for wells fargo. she joins us from charlotte, north carolina. turninghe data are pretty much around the world at this point in time. the german data is just the latest in a long string of numbers. given the data we are seeing at the moment, does risk rally we seem to be seeing in assets make sense to you? guest: yes, it does, and good morning. the risk rally in assets right now is in large part in response to the significant downturn we -- or later in 2018. we are really seeing flat
markets for the last months. the u.s. large-cap market is flat. we cde for index also flat over the last three months, so it really just is recovering from that significant downturn. one thing about the german economy in particular is that the ecb is now watching the german economy because it is so andrtant to the euro zone, we expect them to probably take a more dovish stance should the german economy continued to weaken, just like we seen the federal reserve here in the united states take a more patient stance as some of the akened laste year. guy: it has been quite a u-turn from some central banks. we saw australia making a similar u-turn overnight, going from hiking mode to neutral mode in fairly short order.
what is it in the data that you think is spooking the federal banks? guest: we think that some of the slow down in gdp is certainly contributing to the central banks' change in policy here, but in the united states in particular, what we are seeing is some softening of the data in the fourth quarter, but a turn in some of that data so far this year. we are still seeing very strong job growth here in the united that ifand we think there are any agreements with regard to trade policy, particularly with china, and then by extension some additional agreements with trade policy with the euro zone, all of that, if resolved, could certainly add to global growth in 2019. vonnie: senator rob portman, a
member of the senate finance committee, let's hear what he had to say regarding u.s. trade pacts. republicans and democrats are like are saying, why did we do this? it provides no leverage. it hurts the economy. it hurts the families of federal employees not getting paychecks. people that are furloughed get paychecks after the fact. it makes no sense for taxpayers. vonnie: that was a double fail because that was rob portman, but it wasn't actually the soundbite how was looking for. rob portman talked about the negative impact of stalling trade negotiations. what happens with these china negotiations, according to our own emma chandra, everything we talked about concerns china and trade with the u.s. guest: sure. we do think that president trump
and president xi will meet later this year ahead of that tariffs deadline on march 1. more than likely we are going to see some kind of high-level deal come out of that meeting, and it is probably going to relate to things we've already seen like u.s. exports,ore particularly in agriculture -- china buying more u.s. exports, particularly in agriculture. they will leave the more complex aspects of that trade deal to others to work through in the course of quarters, perhaps even years, because that structural element is the part that is so complex. things like forced technology transfer, state-supported industries. all of that is part of china's 2025 plan. it is not going to be resolved as easily. vonnie: if we don't get a deal by the end of this month, what
kind of hit could the economy experience from that? guest: if we don't get a deal, it is going to have a significant impact, we believe, on the global economy, not just the u.s. economy. the u.s. economy will probably still continue to have growth in excess of 2%, but it will be another hit to the global economy. deal and the get a fed remains as it does now, what is the upside for stocks? how much headroom is there? guest: we do think there is some upside for stocks. 3% to 5%ast has it at upside from where we are today, so somewhat more upside, but we think we seen a lot of the upturn already in january. we are actually taking a little bit of risk out of our stock
holdings in the united states. we are pulling back on small caps, and we've added that into short-term fixed income, so taking a little bit of risk off the table here, and also taking some returns considering small-cap is up 12% from its low in december. guy: if you think we are just going to see a repeat of last year? at the beginning of 2018, massive stock rally. the rest of the year not so good. is 2019 shaping up to be similar? guest: we do think there is going to be more volatility. we think 2018 was a transition year. we actually titled our outlook for 2019 the end of easy, meaning we do think the economy and the markets are going to face some additional headwinds in 2019. expect that volatility. expect the market rally that we seen to come off a little bit in the coming months, possibly a
retest of some of the lows. but we would see that as an opportunity because we don't think this is the end of this recovery or the end of this cycle. vonnie: are there any spots in markets across asset classes where you see vulnerabilities? guest: we see vulnerabilities certainly in small caps, so we've taken some of our assets out of small caps, but we also see some vulnerabilities in the riskier areas of fixed income. for example, high yield. we don't think the risk is worth the amount of return you're getting in high yield right now, so we would move that exposure into short-term fixed income as well. vonnie: all right. mcmillion coming to us from charlotte, north carolina. thank you. coming up, part of my interview
♪ vonnie: live from new york, i'm vonnie quinn. guy: from london, i'm guy johnson. this is "bloomberg markets." let's catch up on some of the biggest news we are tracking here at bloomberg. let's kick it off with the european union antitrust regulators. they've rejected the proposed rail merger. the eu says the companies were not willing to address concerns about controls over real signaling systems and very high-speed trains. french and german officials
argued the merger was needed to beat competition from china. we talked to the eu come edition commissioner. >> there is -- competition commissioner. attentive to be very to these questions. they are not only european champions, they are global champions. they do very well in every contestable market in the rail industry. guy: the french and the germans not happy. the american banker, this man who wants man barclays, is stepping down as the executive chairman of the african banking venture. bob diamond says he will stay on as a nonexecutive director. the bank is reviewing assets and seeks to exit some countries. shares have plunged since going public into any 13. 13 -- u.k. -- in what he in 2013.
u.k., a cotto -- a cotto sharestt -- ocado falling after a warehouse fire. vonnie: in the state of the union address, the president this gust working on a better trade deal with china. core,i chairman at ever , ed hyman, spoke to me this morning. the economy could slow in 2019 and 2020, and pick up in the latter part of 2020. but right now it looks like it will be a slower pace than it has been. that said, the economy has
increased about 50% in the past decade. i don't know if you think that's a lot, but it is notable. i travel constantly, and every place i go to you can see the prosperity not in rate of change, but just that it is so much better. boston, for example, is really strong. you can see it everywhere. i was on the west coast last week. it is very strong. they got a kick out of the super bowl because you've got atlanta, that beautiful stadium, and atlanta is just booming. it's realoming, but estate is weakened quite a bit. and boston -- i think the patriots are from boston -- [laughter] vonnie: you mentioned the other day when we were speaking about the economic cycle, you had a
good reference to the super bowl. guest: that's one of the things i'm most interested in now, is this topic. the economy probably grew in the first quarter. if it grew in the second quarter , if u.s. gdp increased, it will be the longest expansion on record. 40 quarters. the longest is 30 nine quarters in the 1990's. that will get tongues wagging. peter, you interviewed larry summers. you were discussing with him when the next recession would be. he mentioned australia. australia come as you know, has been at it for 28 years. , this is being recorded. i don't want you to get the impression that i think the next recession is 15 years out. but if we get to the second quarter and it is the longest
ever, you will be asking the question what's what. this is what i think is happening. this is the first expansion that china has dominated. china really became china as 2007, so this in is the first time they have been driving global growth, which they have been. second, these forces are now in place for two decades. competition, technology, and globalization. they are driving growth and taking inflation down, and they are always getting stronger. in the current episode. so those things are making the cycle longer than it's been in the past. so we'll have to cope with that. i don't see a recession. it will be a couple years out, if not longer.
vonnie: you spoke about tom brady. guest: right. [laughter] guest: any performer that is old. we are chronologically old and biologically young. i would say that we are tom brady he's 50 -- tom brady when he's 50. vonnie: that was part of my interview with evercore isi chairman ed hyman. more to come. this is bloomberg.
♪ vonnie: live from new york, i'm vonnie quinn. guy: from london, i'm guy johnson. this is "bloomberg markets." let's turn our attention to the futures market. let's go to chicago. u.s. oil industries increasing from last week, but smaller than had been expected. let's go to bob from the cme. data?houghts on the eia
the wti market is down for three days in a row now. is it turning? guest: i don't think they are turning medium-term. when you look at the last three eiaions, certainly this number is not enough. a little bit of theater of the obvious because it is falling. however, look at the refinery utilization component of the data. 90.7. that is weak relative to the last few weeks. that is showing less and less short-term demand at the refinery site, and part of it is the polar vortex. he talked about the cold weather here in chicago. 250 million americans were affected by that cold blast. people in florida were not driving their cars and 50 degree weather. so it totally affected much more of the country then just where i am standing right now. you're seeing that in refinery utilization. you are going to see it in gasoline inventories in the coming weeks.
guy: i wonder whether venezuela plays into that. one oil analyst says he believes opec plots will extend. is that in the market yet? guest: i don't think it is. that is an interesting comment considering the country it came from, secondary to russia in that opec plus equation, but also kind of on the block for opec admission as a member. it has some validity to it. it is definitely a preemptive comment. this is something we've talked about for months, specifically saying that cut was a step, but saudi arabia had already cut more than 400,000 barrels from november to december. december to january, 630,000 barrels. ,e can't get to that $60 number a jumping point for where they want it to go. this is a preemptive comment. may have been leaked by the azerbaijan so they can confirm or deny it on the road. i think crude oil is going to
rise, but not until some of the excess supply gets taken out of the market short-term. guy: could to hear from you bob. iachhinohin -- bob of past reading partners joining us. highlights. us the i know there was a lot about trade. reporter: we had gm earlier saying profits on sales were down, this move to bigger cars movinge more costly, towards higher prices to deal with slow down we are seeing within the auto market globally, and especially in china, the world's biggest car market. there were lots of questions about china which are still ongoing. in china, g.m. thinks they can to $3070 million f million.
the cfo said they are growing launches, selling cadillacs there, but analysts are probing for how they are going to make up for this slowdown in china. also a question about tariffs. aboutlleagues talking having a greater awareness of 232 tariffs among the wall street community. commerce secretary wilbur ross is expected to hammer the president on whether certain parts are a national security threat, something that has been ongoing for a number of months. people are wondering how they are dealing with that. gm did say they took $1 billion in cost related to tariffs and higher commodity prices. profitabilitycar at least three years away.
how firm is that number? reporter: it wasn't very firm. one analyst asked when will electric cars be profitable, but we didn't get a lot of detail on that. we know that and it comes to electric cars, they've been focusing a lot on how they bring that to market, how they get that through the various safety tests that are required. they've applied to the government for a better sense on what they can do, but it was still fairly unclear. vonnie: emma chandra, thank you. 1.5% even is now up as markets decline fractionally. the nasdaq is down about 2/10 of 1%.
guy: 30 minutes left in the european trading day. from london, i am guy johnson. .onnie: i am vonnie quinn this is the european close on bloomberg markets. guy: the german dax trading down today. factory orders really terrible. the data not good from germany right now. the year on year number is a dramatic drop-off. it fits with the data series we are getting out of germany. bondy speculative 30 year sold today. we will talk about that in a moment, with mark nash. italy out into the market. massive, big takedown of this. it has a portfolio effect into the secondary market, as you can see. we are seeing yields rising at the back end of the italian curve, but as i say we will talk more about that in a moment. central banks performing a series of you turns around the world.