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tv   Bloomberg Markets European Open  Bloomberg  March 11, 2019 12:00pm-1:00pm EDT

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left in the european trading day. from london, i'm guy johnson. vonnie: in new york, i'm vonnie quinn. this is the "european close." guy: the hours a little different over the next three weeks, nevertheless we will have the close covered for you. european stocks are doing well and banks trading very strongly. banks leading the stoxx 600 higher. we are up. deutsche bank leading the charge. we may come back and talk about that. the german ten-year, we are trading at year lows. and highs in terms of the prices. and the boeing story dominated on both sides of the atlantic, saffron one half of the engine supply company. ge is on the other side of that. safran is trading down. vonnie: in the u.s., analysts urging caution on boeing, well off lows of the session but
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nevertheless it is down 7%. and it had been a massive drag on the dow jones industrial average, which just turned positive. you can see the difference between that and the s&p 500, up 1% right now, including better stories with nvidia. and that is what is going on equities wise in the u.s. markets. guy: let's talk about that story. it is the dominant one, the crashing inmmax 8 ethiopia over the weekend. it is boeing's best-selling jet. went down one sunday with 157 people on board, all killed. this is the second 737 max crash in five months. our aviation reporter is joining us on set. at thiswe not know point, because people are drawing a connection between
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this crash over the weekend and are wen air crash -- able to make that connection? >> at this time, we cannot readily make that connection. we are waiting to hear from the faa, which is in charge when it comes to regulating and approving the safety procedures around boeing aircraft, as a u.s. manufacturer. we have not heard the latest from them yet, but what we know is if you look at the flat data, it resembles what did happen with the lion air crash in october. pilots requested to return, you have got a steep decline, which we saw with lion air, and this incident happened 10 minutes after takeoff. i think what we are seeing in the stock today is the assumption that these two are linked, emphasizing what could be a bigger problem for boeing. vonnie: whether they are linked or not, it is a negative mark on these jets.
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i'm curious as to whether there are replacements, given that this was generated by $30 billion in revenue -- this generated $30 billion in revenue. if they did replace the orders, do they have a choice? 737 was pitted against the neo, the airbus competitor, and both have been bestsellers, where courses in the short form market. i think it might be too early to say that airlines will be canceling orders. we have heard from lion air, who have been very frustrated with the boeing, indicating they may scrap their order. we are not sure where that is going yet. inhough, we are hearing china at least 100 planes have been grounded. and in india, they are releasing new guidelines. others saying they will not schedule anymore. this is a big question for
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investors, how does this snowball and what is the fallout? guy: it is very hard to get slots on the line. airbus struggled to ramp up production at the best of time, if they got new orders they would be years in years down the line. benjamin: if you make the is something that there will be a flood of orders, switching to the 737s, youm look at where we are in the cycle and whether the aerospace cycle is reaching a point where we are seeing more bankruptcies, and whether that will free up slots. there could be leeway further down the line for airbus. but again, this is an issue that boeing, i mean, we can almost guarantee that they will jump on this immediately, if they haven't already. vonnie: how at risk are the suppliers, particularly if this is related to the supplier?
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benjamin: this is a critical element. the lion air incident does not seem to be connected to the supply chain. the aerospace supply chain has been under pressure because we have seen such massive ramp up in the deliveries of all the aircraft, predominantly the 737 and neo. if this is connected to the supply chain, or some kind of miss manufacturing, that takes us to a new level and disrupts the entire production space. but i caution again that that -- we are too soon. the but box has been found, though, so we should hear more about what happened on the flight probably in the next few hours. guy: win the lion air -aircraft -- when the lion air aircraft went down it was late to software that tried to force the nose down, like 12 times the
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pilots tried to correct that and bring it back up. the response from boeing was to new we are going to issue guidelines and we will update the manual and let you know. anybody flying a 737 max 8 should be aware of this. if they are connected, how deep does boeing have to go to fix this safety measure? is it reengineering, a software patch, how do you fix an airplane in this case? benjamin: you hit on the crucial element, an analysis of what steps boeing did take following the lion air incident and whether it was sufficient. if their actions to advise pilots on how to update the becomes aanual, this question of whether ethiopian airlines has responsibility for not ensuring that their pilots were fully up-to-date on the latest guidelines.
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but it really does come down to pilot training. it could be a quick update, a software update that boeing could issue, then it is about education and makers are pilots know what they are doing. the max, it is an upgrade of a plane that was built in the 1960's, the pitch was always, this is a new aircraft in the sense of new engines, but you do not have to retrain pilots, they know the cockpit and they know how to fly it. this is the 737 that you know and love. so the question for boeing, this was meant to be a plane that should be easy for a 737 operator to switch and upgrade to, easy done. guy: we will find out. more data likely to come out in the next few hours. benjamin, thank you. vonnie: now first word news. mark: president trump sinking one of the largest ever cuts to domestic discretionary spending in a $8.6 billion budget
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proposal released today. the plan also boosts defense spending and adds $8.6 billion for the border wall. the blueprint forecasts annual deficits extending beyond the next decade and a rising national debt. it represents a wish list for the president's priorities that is certain to be dismissed by congress. it also raises the threat of a shutdown that could trigger another government shutdown in the fall. democrats have chosen milwaukee to host their 2020 national convention. the chairman picked milwaukee over miami and houston. it will be the first time in more than a century the democrats gather in a midwestern city, other than chicago, to nominate a presidential candidate. milwaukee will also be one of the smaller cities -- the smaller cities ever to host the presidential convention. at least 21 of the people who died in the ethiopian crash or united nations staff members.
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the commission began today with hundreds of delegates standing and silent tribute to the 157 victims. globalrrorist said -- "a tragedy has hit close to home and in the united nations is united in grief.." researchers have found the voice recorders from the plane. it crashed shortly after takeoff en route to nairobi. the iranian president is in iraq for his first official visit to the nation. he was received by an honor guard when he landed. the president says he is hoping to boost ties between the two countries. iran is hoping to increase 13 billion volume in trade between the two neighboring countries to $20 billion. global 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. i'm. mark crumpton -- i'm mark crumpton. this is bloomberg. vonnie: thank you.
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coming up, we are following the markets. we are getting a nice rally on wall street, one exception is boeing, the only stock on the dow that is lower, lower by a significant amount, down by 7.2%. dow pulling itself back into positive territory, up 4/10 of 1%. the s&p 500 is up 1.25%. and apple is being upgraded from buy to neutral. this from merrill lynch. we are also following the soft index, all companies in the 2.25%.up 2.5% -- up this is good for the chip sector. this is bloomberg. ♪
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guy: live from london, i'm guy johnson. vonnie: in new york, i'm vonnie quinn. this is the "european close." let's get to the global markets. a nice rally today. abigail: you are right about that. take a look at the global rally. 1% withand nasdaq up the s&p 500 on pace for its best day in a month. not that on pace for its best day since the end of january. the bear's check that we had last week, the worst week of the year, broken by the bulls. it started in asia, shanghai composite up. with the dax also higher. the bulls out on the day, hoping that there is economic light, considering the better-than-expected retail sales in the u.s. for the mother january after a plunge in december. and where we have a performance,
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the technology space and chips. take a look at stocks over the last two days. lastly, the worst week of the year with lots of selling of high beta names, but right now it is up 2.2% on the day, outperforming other major averages. we have a deal on this monday. take a look at mellanox, up 8.4%, being bought by nvidia for $6.9 billion, 14% premium. investors think another bid will come in, but nvidia really trying to grow their business. seagate trading higher after a bit of a drop last week on memory concerns. guy? guy: yeah, and a lot of m&a. and we are also thinking about brexit talks, they are deadlocked while ministers urge the european union to make a last-minute decision to keep the deal from being thrown out tomorrow.
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we are joined by maria. any belief that we are going to get last-minute concessions? it looks like the eu is playing its cards very close to it's just right up until the -- its chest right up until the last minute. maria: the situation is fluid. we talk about this being the apex of a deal, big changes by the minute. the last we heard that prime minister may would fly into strasburg. this came out from the irish government, nobody has confirmed this on the ground here, but we know that jean-claude juncker is on his way to strasburg. european officials said -- stay here and in strasburg. the logic behind it is the prime minister may think we could -- she could get those concessions. if not, there is really no reason for her to fly in. and also the question, will should but the deal to a vote tomorrow? vonnie: everybody is saying
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there are no extra discussions. angela merkel saying it is up to the u.k. now. we also have others saying that there are no talks going on. that mario portugal saying we want to avoid a no deal brexit scenario. and it does not sound like there is much there. maria: that is right. what we do know is on friday the negotiation really hit a low point, that is when the eu put out concessions saying the backstop could only apply to northern ireland. but the u.k. said from day one they could not accept anything that treats the u.k. as a separate units, it has to be one. geoffrey cox said so much hope -- with geoffrey cox, some which was pinned on this man, but he made little progress. and in the eyes of the eu, the
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ball is still in london's court. guy: maria, thank you. let's carry on the conversation and get more details on how the financial markets will be responding. a global head of research at deutsche bank is joining us. if they lose big tomorrow on this vote, how does the pound react? >> initially, you will see negative reaction, but what the market has cared about the most is prospect of a hard brexit. if you look at the pound at the start of the year, it has been one of the better performing currencies, that is because the chance of a hard brexit has been going down. if a deal fails, we still think you will get the extension and it will be all about what happens during the next three months. so, initially a negative reaction, but then we think about what will happen in april and 82, likely the deadline for that new extension. around i put hedges
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march 29 and around tomorrow, how do i reposition at this point and how do i know when to reposition, how will it affect the options market? george: most people spend premium buying these options and they have not made money, because of the way that the market has dealt with this, is an extension toward uncertainty. but think about the real news of the last couple days, it is really that labour has stepped back from a second referendum, and their only prospect is a short extension, but no time for that. we will be left with two options, an early general election or aversion to the deal going through. one is for a bullish and what is for a negative for the pound. it is becoming quite binary. vonnie: in terms of timing, when is the red letter day for currency trading? what is the day you want to be in the office, even for the asian session? george: it is a moving target
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and we do not really know, so there has been reports of the last few hours of potentially on next boat on -- vote tuesday or wednesday could be changed. the reality is the timeline is so fluid at the moment, that we do not really know. the actual deadline from a market perspective, which is the end of march, has become less relevant because the market has been pricing in the extension and the focus will be on what conditions do the europeans require for the article 50 extension to take place, because they will ask for something. vonnie: with a binary outcome, are there obvious hedge type traits? -- trades? george: there isn't. we see positive and negative outcomes. buy has been in a more positive direction, which is why we have been more bullish on the pound of the last few months, but i think we are just approaching the inflection point wehre you can see a lot of political
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dynamics evolving quickly. we probably do favorite being long over the last couple weeks of the deadline. ut directionally -- but directionally it will be highly dependent on the landscape in westminster. guy: some to adjusting the eu could ask for a higher brexit bill. we will carry on the conversation around foreign-exchange. george joining us from deutsche bank. we will talk about the eurozone, next, while the bund is heading towards a zero. -- towards zero. this is bloomberg. ♪
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guy: live from london, i'm guy johnson. vonnie: in new york, i'm vonnie quinn. this is the "european close." where back with george saravelos of deutsche bank. we have been talking a lot about slowing china growth and exactly how slow the growth has gotten.
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coupled with the idea that there might be a trade truce, if you like, that will also put limits on what china can do with the yuan. where does deutsche bank see it going? george: the market has been paying attention to this currency pact, or reporting of a currency pact, between the u.s. and china and that has created the perception that seven will be a difficult level to break. i think that is probably right, so we have a fairly neutral view on the renminbi. but if you look at the substance of the currency pact, it looks like it will be something similar to the tpp side agreement that was reached under the obama administration. and the commitments were quite vague around the currency, but we think it is probably in everybody's interest to keep the currency range bound and off
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the political radar. a pretty neutral low volatility view. vonnie: at what point do we get a breakout, and would it be to the stronger or the weaker? george: the breakout risk comes if you get a breakdown in negotiations. the market has repriced quite positively. we expect that the negotiations, at least this truce will be extended to, or they could have a summit between trump and xi, but the risk is if you have a large breakdown in negotiations, maybe additional tariffs coming through, the easiest way for the chinese to offset that would be allowing a move from seven. but that is no longer the baseline. guy: the connection between germany and china, i saw the data out earlier on, the connection with what happened in terms of export and import story, very strong in terms of the correlations. the german ten-year, in june 2016, it hit -13 bips.
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with six plus at the moment, will we break below that low, because at the moment the momentum is dramatic. george: it is not logical to say that they could go back to zero, but i will say that there is a lot of doom and gloom out there. and if you look at the reaction from the ecb meeting, it was not because mario draghi was dovish. he rather underwhelmed in terms of substance of the announcement and the market took a market failure view, a policy failure view, so the euro went down. if i think about the euro, and we are saying that europe is becoming jeopardized, remember that the yen was at 300, now at 100 with negative news from japan. potentially, that may not be as bad for the euro. the surplus is recycled, and we could have real yields rising, so our view is not that negative for the euro, even if bad things
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are happening. guy: george is going to stay with us. and today, we have had the budget out of the united states, also retail sales numbers, and we are also going to be getting a cpi number. we will talk about all that, plus take a look at where european markets are trading as we head towards the close. this is bloomberg. ♪
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guy: 30 seconds until the end of regular trading this afternoon in europe. a positive today. light volume. that is interesting on an up
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day. let me show you the individual markets. the main indexes the ftse 100, up by 4/10 of 1%. bnks have been -- banks have been a strong push former. banks have a very strong days. that could be an aggregate story, people buying the banks today, or it could be related to m&a. we will show you those names in a moment. let's give them to you now. some individual stocks we are taking a look at. 4.7%, butank is up by commerzbank is leading the charge, up by 7.1%. but we do see some light volume. safran, the boeing story is important to them today and driving markets on both sides of the atlantic. airbus having a positive day. but safran is a supplier for the
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737 max, half of the engine company that makes the engines for that company and it is trading down by 1.6%. look at the volume, it is light today. the white line is where we are today, the blue is the average of the last 30 days. quite the light volume session for the european markets. vonnie: you mentioned boeing. if you take out boeing, we would have a rally in the u.s. we are still higher in the dow jones industrial average, but way the only real drag on the index today, up a third of a percent. and s&p 500 is up 1.2%. we know that there is a deal today with nvidia, up five point --5.8%. apple is also up today. merrill lynch put out 10 reasons why it is buy after a pullback.
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and the reasons also come with an upgrade from bank of america merrill lynch. let's take a look at the macro murmurs -- macro movers. a nice rally going on around the world. in brazil, up 2.2% after economists upgraded for the fourth straight week 2020 growth. china, we mentioned. the ruble is higher as well. that is possibly an oil traded, given that there are concerns around the russia and money laundering through the baltic banks. we will get to that in a little bit as well. guy: let's get a different perspective on the data out of the u.s. still with us is george saravelos from deutsche bank. we had retail sales today, which abounds to back, but the last number was really bad and people are already worried about february.
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what do you expect with the cpi? george: i think it is the inflation numbers that will matter going for it for the fed, because the data has been ok and we have seen the acceleration. the fed said that they would be more responsive to inflation and maybe have to shift. so we are expecting a number close to consensus, but again of the market reacts if it gets stronger or weaker numbers are routed the inflation front. guy: the blood is trading at 257 below the u.s. 10 year. is there any reason not to buy the dollar against the euro? george: the reason is, going back to the previous conversation we had, a lot is in the price in terms of how much pessimism is built in. we have to bear in mind that the euro should of been lower. it should be closer to parity, if you look at the rate differential, and it isn't. we are moving toward these dynamics where europe has a
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savings, in surplus, it cannot be recycled and europeans are not buying enough, said that makes the euro really sticky to the downside and that is the danger. that means it is running out of ammunition. vonnie: what ranges do see the euro trading in then? 1.10-1.20 is the range. historically, the smallest euro range on record has been slightly more than 10 figures, so we need to have that range in the euro. viewears of you -- bearish is breaking 1.10, but our view is we will not. the risk is, potentially moving into the end of the year the focus was shift to u.s. political dynamics. if you look at political uncertainty, at the moment you have large foreign uncertainty, close to record highs, and that
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spread versus the u.s. is lower. going toward the presidential elections, this worry around the policies coming from the modernts around tax and monetary policy theory, these things could warned a higher - - warrant a higher risk problem for the second half of the year. vonnie: if the dollar reacts the way that you describe, right now the ruble is the best performing year to date of all the currencies -- george: the ruble has been our favorite em pick so far this year. and we also like high gary currencies, for instance -- carry currencies, for his of those ones that do quite well when compressed. so we have got the asian preference there in terms of indonesia. and you you have brazil, which has lower yields, but potentially positive clinical dynamics. guy: what is it that will get
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involved in any asset class moving at the moment, particularly with fixed income and exchange? george: the u.s. unemployment rate going up. we have done a lot of work in terms of what drives volatility and currencies it is some say the the fed rates hike -- dominant driver is growth. so u.s. growth in particular. so long as u.s. growth stays a strong, vol will be low and when the market fears a recession, that is when it will strike back. guy: when will that happen? george: we have a moderate slowdown and that is the baseline. the question is when you talk about the unemployment rate rising. the fed has bought time. the delaying of the rate hikes has allowed vol to stay subdued. it is not because they are not doing anything, it is because they are allowing the growth cycle to extend. vonnie: if you get a break out in oil to one direction or the
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other, does that have a meaningful impact on the dollar and on the general dynamics going around the world with other currencies too? george: the highest correlation between oil prices with yields, and even more so the inflation expedition component, what is interesting is even though the oil price, the spot oil price, you see a high correlation with a five-year inflation expectations, so the market is concerned about structuring low-inflation. i would expect the largest impact to be on the fixed income space. in fx, these correlations have declined. we talked about the rate spread before and how that has moved again in favor of the dollar, yet you see very limited moves. um, -- you forgeorge, thank joining us. much appreciated. now first word news. mark: at least 21 employees of
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the yuan affiliated -- of united nations affiliated organizations a died in the crash of a plane in nairobi. all 157 people on board the plane were killed after it crashed minutes after takeoff on sunday. at the geneva office, the u.n. flag was lowered to half staff. and -- >> the geneva family is expressing its heartfelt condolences to the families and loved ones of all the victims of this tragedy. our thoughts are with the families, friends and colleagues, and we stand in solidarity with them and we wish of them strength and courage in this very difficult moment. mark: some of the victims had been on their way to an environmental conference. the north korean leader is showing signs he might fire his first rocket in 15 months. longtime observers suspect he has more to lose than win by
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making such a move. firing a missile could anger president trump, or undercut support for his sanctions relief from china and russia. turkey calling a recession for the first time in a decade. when it fellshrank 1.6%, a blow to the president whose party phases -- faces elections this month. the economy has fizzled following policy missteps and a diplomatic rift with the u.s. and the british prime minister, her government has declared that brexit talks with the european union are deadlocked. the ministers urged the eu to make a last-minute concession to stop the deal from being thrown out by parliament this week. if lawmakers reject may's agreement, they will have another vote on whether to delay brexit to avoid a chaotic no deal exit. 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.
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i'm mark crumpton. this is bloomberg. guy: thank you very much indeed. let's check where the european stocks have settled. as we indicated, a fairly light volume session today, but the banks are absolutely dominant. two names really standing out, commerce bank and deutsche bank. are we expecting -- commerzbank and deutsche bank. are we expecting news from these institutions? do not forget, to into "the cable" show. find us on digital radio in the london area and on all your bloomberg devices. this is bloomberg. ♪
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guy: live from london, i'm guy johnson. vonnie: in new york, i'm vonnie quinn. this is the "european close." president donald trump releasing his 2020 budget request with at least $8.6 billion in funding for the wall on the mexico border, likely setting up a new fight with democrats. we are joined now by kevin cirilli live in washington. this is the so-called skinny budget. and it is a request -- what happens or what is in it? kevin: skinny budget but it landed with a thud and many tell me it is dead on arrival, because if you crunch the numbers -- a 5% cut in discretionary spending, $8.6 billion for the wall, and no
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balance the budget for 15 years. they are also arguing, really banking on, it are percent growth model for the economy as a whole. ant is significantly optimistic view of the u.s. economy, most forecasters predicted it would be somewhat smaller than 3% growth. the bottom line, this is an opportunity for the administration to really project how they would like to frame the political debate in washington dc, but already the speaker of the senatend minority leader are putting out a joint statement, saying the president must not have learned anything from the last partial government shutdown, which lasted 35 days. and that really there could be another shutdown come this fall, if the president refuses to back down from $8.6 billion for the wall. guy: the focus on the democrat'' reaction is understandable, but you took out two numbers that
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make me wonder how the republicans will react as well. no balance the budget for 15 years. many republicans would like that number to be closer to 10. the fact that they are relying on a 3% growth target to make it to 15 years makes the numbers seem further out of reach. how big of a problem is that going to be for republicans? kevin: it will be a massive problem. and with all the chatter over the weekend as we prepared for the budget release, even this morning, is essentially looking back at the last budget proposal that the president released when republicans had control of congress and republicans were scratching their heads and looking at the growth model, looking at the national deficit and is saying, the president is proposing to slash funding on a host of different government programs, but at the same time wants to increase the defense funding. that is issue number one. the second is this also does have a guideline of -- or a
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blueprint model for many defense contractors, who rely on government funding for a significant portion of their bottom line, like boeing, the caterpillars and whatnot, particularly with defense spending he is proposing to increase defense spending in proposing the new branch of the military, space force, and that does have partisan undertones, but more specifically a roadmap, at least from the chatter here, policy, iseyond u.s. in beyond a republican-controlled white house. vonnie: lots of details. thank you, kevin cirilli. the let's turn back to money laundering scandal affecting european banks. it seems to get broader and broader with some lenders facing the risk of penalties from u.s. authorities. for more we will welcome ed
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robinson. and and other people of bloomberg this afternoon have run a top live, a kind of market blog basically inviting questions in from bloomberg clients, trying to help people get their arms around understanding what is happening here. it finished about a half hour ago. what was the biggest take away? ed: that investors in bloomberg terminal users are concerned about the exposure that banks might have who were not on the front lines of washing the dirty money. even if those banks are further down the chain of a transaction, what kind of exposure might they have two liability -- to liability. it underscores the vulnerabilities in the banking system, in the financial system, and how interconnected it is. vonnie: who is examining that and how will we know at what point people where counterparty
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to some of this? ed: the banks are conducting internal reviews of their own, obviously. and you have law enforcement going to either prosecution offices at a national level, in denmark, norway, sweden, and we have in the u.s. the exchange commission and the federal reserve. alphabetis a whole soup of agencies investigating these on a bank by bank level, but the banks internally will have to determine what kind of exposures may have resulted from the movement of dirty money through their accounts, then that have to be distributed to their clients, because clients have to know. guy: ed, thank you very much indeed. if you want to read through the transcripts of the live event earlier, you can go to bloomberg. vonnie: the stock of the hour is
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nvidia, the upper former in the s&p 500 today, up more than 6% on the news that the company is which itself is a lot higher. emma: it would be the biggest ever acquisition, $125 a share cash offer, 14% premium to the friday close. and nvidia is the biggest maker of graphic chips, the company has been touting the chips to data centers, trying to say that they are very good for helping the process the vast amount of information that is created with a.i., especially with image recognition, and buying mellanox will further their expertise, increasehose chips the flow of information. and this will raise revenue growth for nvidia as well, which has been slowing down, so once the acquisition is complete the
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combination will equally to cash flow and increase in profit paired guy: who else was -- profit. guy: who else was involved? emma: nvidia says it shows that they really went ahead to get mellanox away from intel and it did set up a showdown between nvidia and intel. there have been interest in mellanox since a lot of investors took big stakes in the company. and the numbers have been positive on the news, which that could set up for their m&a in the sector, but this needs to get approval from regulators. analysts saying that this will be easier compared to other chip deals in the past. the nvidia ceo says he expects there not to be many hurdles, as he sees both businesses as complementary. vonnie: that was the stock of
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the hour. emma will be back in a little bit. time for our business flash. levi strauss saying it can overcome the competition in the apparel industry, it will offer about 37 million shares in an ipo and could raise millions of dollars. , the majority owned by the descendents of the founder, levi strauss. and we have been speaking with the executive director of the international -- agency, who has talk to us about geopolitical concerns affecting oil. >> we are seeing the geopolitical tensions are putting unprecedented shudder on the oil markets, including in iran, venezuela, the trade tensions have been very challenging. vonnie: days end of director of the international energy agency's begin to us earlier.
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-- agency speaking to us earlier. battle the charts is next. this is bloomberg. ♪ want more from your entertainment experience?
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guy: it is time for our global battle of the charts. you can find these are running gtv . vonnie: thanks for letting me go first, because i have a formidable competitor today and it is intimidating, so let me get to my chart. big week for inflation data, we saw that with retail sales coming in better than forecast and better wage inflation on friday. but it is not feeding through into higher consumer prices yet. treasury bulls say that that is making them bullish on treasuries, but they are waiting for it to seep through. we will get cpi this week as
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well and we look at ion that throughout the week to see if that makes it changes to this chart. you can see this chart at gtv . guy: cpi tomorrow, the number of the week. that was quite a drum roll, effectively, now mr. wilson. >> what i have here is a look at how industrial stocks in the s&p 500 are doing. and what you can see is that they be to the index through the end of february -- bat the index -- beat the index to the end of february. they were the best performer. but since then they have been the worst. so from first to worst. this was pointed out last week. nick saying that this is a group, when you look at industrial companies, very much attitude to what is going on with the global economy and trade. if you think that the u.s. and china will get together on a trade deal, and the economy is
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going to hold up worldwide, that red box is not what you would expect to see with the falling off of performance. that is the question here, what we have going on with stocks and is it telling us something about the bigger picture? guy: i think it is telling us the global economy is in a pickle right now, certainly with the data we are getting now, that would fit. nice charge from dave. i think he is the victor today. the boeing story is fitting into what we are seeing with industrials today. generally doing well today, except for boeing. this is bloomberg. ♪
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>> it is 1:00 p.m. in new york, and 2:00 a.m. in hong kong. i'm honey -- on vonnie quinn. welcome to "bloomberg markets." ♪
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vonnie: from bloomberg world headquarters in new york, here are the top stories we are following. the unfinished business of the financial crisis. we talked to the cochairman about the path forward for the agency. animal health care in high demand. ceo about the unit's becoming a fully independent company. the founderown with and ceo of the ibw group. last time she was on, she said it was borderline crazy to start a hedge fund in this environment. we will see what she says now. into the trading day. abigail doolittle has been keeping and i on the trading. abigail: after last week's big decline, we have the balls out here the question is whether or not it is for real.

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