tv Whatd You Miss Bloomberg March 20, 2019 4:00pm-5:00pm EDT
the sterling curbs are night yet maybe that is the direction we had. caroline: meanwhile, 10 seconds to go until the market close, we have been highs and lows and a volatile day on the back of china and u.s. trades. the s&p 500 off by 3/10 of 1%. scarlet: you look at the best and worst performers of the dow jones industrial average. jpmorgan, american express, three of the four worst decliners. when you look at the industry groups, you guy get piled back on the stage and say more dovish stuff. going to say patients, data dependent, stable, what else did he say? he is a master of the balancing act. >> crosswinds. caroline: let's dive deeper into the action with abigail. this choppy trading action we have seen over the
last couple of days, let's look at a chart. different from the one about that yesterday where resistance continued to hold. it's a trading envelope the comes to us from mkm partners. we're looking at a band based on moving averages for the s&p 500 over the last year. we see that it is been reliable. ity're been a few times that went up and investors got overexcited, and then the downside in the fourth quarter. interestingly, just a few days ago, investors got a little overexcited and going about it. now we're going back down. if this band remains liable as it has over the last year, we could see the s&p 500 dropback down into this tight range, perhaps down towards 2750 something to keep in mind. romaine: let's take a look and general mills. that's the cereal maker best known for cereal. it got good forecast. that was predicated on sales of brands.food the shares were up 2% today. it doesn't seem like a lot, but
as a packaged food company, general mills has been outperforming a punch. that's because of acquisitions for blue buffalo last year. and previous years before any's and other products that have allowed it to diversify away from some of its core brands that have fallen out of favor with consumer tastes. it is given more pricing power and has given more possibility to some of its raw material inputs. a lot of its competitors are struggling with costs. the company is saying that while he does expect growth to be moderate, it will be better than what most investors are expecting, looking for about 1% growth or so over the next year. most analysts and investors were inspecting growth of -- revenue to decline. this is better than what a lot of folks feared. >> i want to drill into the worst performing sector today. that is financials. we started off the day on rocky footing, ubs saying we are experiencing the worst quarter
for investment making in recent history. then came 2 p.m. and then can be fed and it got even worse. if you look at the performance of the financial sector, since about 1.2%d fall from that point in time, bring on total losses on the day to more than 2%. every other sector in the snp gained during that time. . regionals posted their lost day today -- were spaces december. scarlett: we definitely see a selloff in those financials. we have breaking news. micron, the chipmaker, coming up with results. $1.71 was the beat, they will looking for a dollar 65. gross margin for the second quarter 50.2%. what analysts are looking for and at the low end of its forecast of 50%-50 2%.
caroline: this is a stock that lost .6% today and it is making up today's move and lost about 80% over the last 12 months. many people today prepared for that news with them. >> we have seen gains, and so, overall, definitely a good five. caroline: and a bellwether. we have seen others perform. let's get to our other advisors. i want your take on the sectors. and we are seeing chipmakers sounding more optimistic. we have had a little bit of relief coming from micron, but the banks are underperforming today. what you see in terms of this global growth slowdown? think about a profit slowdown, the best thing to own is the more stable growth, higher quality sectors. that would be health care, and staples. that would also include utilities, but the issue with utilities, is given how far rates have fallen, from here, the risks to the upside are rates. i would be more cautious on that
front. health care are staples from the sector perspective. regardless of sectors, and a company that has stable earnings makes a lot of sense. scarlett: just wanted to let you know that boeing shares have dropped in after-hours trading, erasing the gains for the day. the fbi is joining a criminal probe into the boeing 737 max, the jetline and evolved into fatal crashes. -- involved into fatal crashes. -- two fatal crashes. this continues and turns. dan: it's going to be a while before this story is over. caroline: headwinds when it comes to trade deals, there also headwinds for boeing. now that we have the fed over with, what will be the key catalyst? brought up technicals and that deserves a pretty large say in this conversation. everything seems to matter until it doesn't and that it matters again.
we saw that with trade. semis were looking great. it was a story of it not being as bad as we thought. we thought it was a bottom. and then trade brought in front and center into the conversation. it's weird but we are seeing in the markets. it's a must like 2017 with a different macro backdrop. we hadem -- then, synchronized global growth. now we have a secret eyes slow down. this is the biggest outperformance of the nasdaq 100 since about october. if the big thing for the big cap stocks. scarlett: i love that. everything doesn't matter until it does. that's the story right now. dan, i want to go back to the financials. i got it today pretty hard. the cliche thinking is that lower rates and fodder curves for financials. why is that the case? for some traditional borrow short land long businesses, but these companies are in all kinds of different lines, some of
which have nothing to do with rates. easyould think overall, financial conditions, lots of deals come more mergers, should be good for banks in the u.s. or as ubs said today, the slow economy, no deals in europe hit them. then that much important anything related to the shape of the old curve? dan: there are a lot of dynamics affecting the banks. noted the- flattening of the curve, it makes sense. rates are coming down. if you want to order that the yield curve -- argue that the yield curve matters, you can make that argument, the fact that rates are coming down, most people would agree that's negative. you are also seeing increased competition for raising those rate on the short end. them to comentice to you. there's like me to be upward pressure on competition. that will squeeze public ability -- profitability. there's also the credit dynamic.
the bar increasingly of the view that there is a lot of leverage out there. if growth is going to continue to slow, that will also put pressure on these banks. there's a lot going on. bottom line, growth is slowing. that's not good environment for the banks. caroline, you were wondering what the next catalyst would be. i know that what it -- i know what it is. brexit. caroline:twitter is going crazy about what is happening in the u.k. mid-party meetings, meetings being broken up, jeremy corbyn walking out of a meeting. the concern here is that we heard chair powell talk about the risk of a brexit and the impact on the dollar, luke is anyone talking about that in the market from the u.s. perspective? luke: not that much. it was surprising to me. there are more questions for powell today been -- on brexit then on the u.s. labor market. what really matters here? joe:
reporters like the brexit story. luke: on the sheer scale --caroline: on a sheer scale of greatest concern, the u.k. maybe more concerned than what is happening in the labor market right here, right now. joe: very possible. it doesn't seem to be of top concern for anyone in the markets. it will have to be another surprise. even when it happened at the referendum, it was a one-day story in the u.s.. scarlett: dan, does brexit matter to you? dan: is just one more uncertainty. we don't try to come -- predict these events. i thought politics in the u.s. are bad. there is no predicting what would happen with brexit. people want to be britain, but they don't want any of the deals that will be put in place. it doesn't make any sense. for us, if it creates a big sell, you get
off and then you see a turnaround in fundamentals, it could be interesting if you look at valuations. there's certainly an argument to be made. we need to see signs that we will get past this. or at the tipping point where discretion confidence and impacting the real economy. scarlett: looking for more evidence and perhaps an opportunity to get it. uki, thank you so much. that does it for the closing bell and me. romaine bostick is stepping in next with what you've missed or will be hearing from theresa may herself. she is due to address the nation on the top of the next second. about 4:15 bloomberg -- your time. this is bloomberg. ♪
live from bloomberg world headquarters in new york, i'm caroline hyde. romaine: i romaine bostick. joe: i'm joe weisenthal. caroline: it was a mixed picture on the day. give dovish this baked into the stock market. joe: the question is, what will you do? caroline: the fed signals it won't tightened at all in 2019 and only once in 2020. it reflects concerns that rates are slowing. here we go again. this -- the eu said the u.k. can have a short extension to the extent -- to the referendum, but only a theresa may can convince her country. ubs, theyning from say it is one of the worst first quarter environments in recent history. -- 10ictures now of pet downing street where we are expecting by mr. theresa may to address the nation. we will be seeing what she has
to say. many trying to preempt whether -- how she anticipates any long gated present -- brexit. --she said under her partnership to much she wouldn't want to see brexit pushback past her date. joe: i still don't know what they will do. romaine: as long as we get some direction. caroline: businesses are crying out for it. we will bring you her remarks as she start speaking. we're talking the u.s. fed right now. joe: let's get back to that fed rate decision. the central bank keeping interest rates unchanged and scaling back their projected hikes -- 20. let's bring in set carpenter, chief u.s. economist at ubs. the market was price for something very dovish and it felt like all of the commentary before was affecting what the markets respecting, such a dramatic drop in the dow.
and yet, it did. and every turn, powell found it dovish at the press conference. are you surprised? seth: i were surprised by the market reaction. i would've thought it would of got in the opposite direction. the market is not pricing in any hikes or the probability of a cut. i would have thought that even rolling out a cut this year would not have been that much of a dovish surprise. but the market reacted strongly that way. the fed also marked down their outlook for the economy this year. had to do the mark to market given the data we have seen. in parts of the press conference, jay powell was upbeat about the medium-term prospects. after the uncertainties surrounding the near term in the first quarter, ultimately, he kept going back to that they are any good addition. romaine: what he is committed getting? everyone i spoke to after the conference seemed to be more impressed less with what he said more with how he said it and how he was committed to. seth: that's interesting. they are in a difficult
situation. in december, they voted to hike rates. they cannot with a statement that was very hawkish and bullish. then at the beginning of january, they did a massive pivots. none of them have said, we should have reconsidered that december hike. now, they are in an awkward position of having to justify being in an extraordinary patient, no hikes this year, when it really wasn't that long ago that they were upbeat on the economy. i'm caroline: a little disappointed with the communication. what about communication of the balance sheet? everyone was saying how important it was to get clarity. they were saying it could edit the have a september and $3.5 trillion in total. we don't know what it would be like this bite -- what it would look like. seth: there is a finite and to what the runoff would happen with the first order of important things for markets. there were a lot of people they got into q4 of last year and they were more worried about quantitative tightening.
my view is a lot of the concerns in the markets was a bit overblown. seens because we had never this before and no one knew how long it would go on and how big of a deal it would be. now it is clearly time boxed. joe: what i'm still confused by is that it felt like the pivot at the end of last year was largely driven by the tents selloff in the financial markets and the germanic tightening of financial conditions. we've seen a major loosening. he talked a lot about inflation and the real economy knowmentals that we inflation is benign, but it was be nine in december and october and for 20 years. the question is, is the fed consistent about what it is looking at that it is actually guiding its decision-making? seth: the story i tell myself about what happened was you saw the selloff starting earlier in the fourth quarter and at first the standard fed response is equity markets move all the time, let's not worry too much.
i thinkgot worse and that was rattling their cage and causing them to stop and say, let's reassess, are we doing the right thing? we got a rally back. them to stopcaused and reconsider what they were doing has now retraced itself. they did take a hard look in the mirror and said, we have been missing inflation for a long time. we have in forecasting this rise in inflation that is not coming true. the sides of the cracks in the economy both politically and abroad, they sort of paid more attention to it. it was a wake-up moment. romaine: is there a sense here that the u.s. economy is strong enough to stand on its own without such a pivot of an accommodation, because we are not neutral anymore with regards to policy. seth: that's exactly what the fed is trying to ask themselves. that is one of the reasons why they're waiting to be patient in their words. with inflation running consistently below their inflation target, there is no urgency to have to test the limits. you will generically make a
mistake with monetary policy, either too much or too little. it's probably a better mistake to do too little. thus forcing them do now. caroline: always great to get your opinion. now, onto brexit. of 10 look right now downing street, where u.k. prime minister theresa may is set to address the mission. minister is saying he will grant a short expansion of brexit only if there is a positive vote in the u.k. house of commons. that would increase the risk of hard brexit? my mind boggles. and i'm british. at the moment, it feels from twitter or social media that there is some ultimate political u.k.eling going on in the a constitutional crisis, people call it. is that it? >> yes. theproblem we have at moment is that even if theresa
may called a general election, which is what people are suggesting, and it's one thing the prime minister can do, to get a relatively straightforward answer, even if she did so, it is impossible to see how that would help. put forward candidates in the general election and the party system at the moment totally fails to mesh with where people stand on brexit. haven't even mentioned that jeremy corbyn showed up for a meeting of party leaders and refused to stay there because someone who left the labor party over disagreements of the brexit strategy was also there. if she were to call for a new election, you are saying that that wouldn't change the way that parliament is looking at what to do with brexit? john: it might well change things. lose a lot of mps would their seats and they would get quite a lot of new faces. it would change things.
it's like shaking a kaleidoscope and seeing what comes out. what would worry me is that it would have almost no consistency or predictable overlap with how the populace as a whole feels about brexit. we have the first part of the post system in each constituency and we have a party system which, at the last election, was marked week strongly dominated by two parties, both of which are split down the middle, if not into more than two parts. it would change things. not necessarily the people wanted to. -- the way people wanted it to. joe: to help our understanding of this, the original plan for this week to -- was to have a third vote on theresa may's withdrawal agreement. the speaker of the house, the parliamentarian, did not allow it, with rules going back to the 1600s. nonetheless, it theoretically, the withdrawal agreement were to
come up for a vote again, is there something the private circuit offered this time, either because it's in a late hour and people are scared the brexit won't happen, that it could undo a 149 vote defeat. john: yes. whatyou can offer is emmanuel macron have been saying today, which is that europe is not going to let us mess around anymore. they have problems of their own. either you are taking this deal or they are telling us they will take the risk of our leaving without a deal. -- i like some thoughts you're putting out there on social media, about the frustration being felt by europe. do they want the u.k. out, do they even want to think about a long extended -- extension and second referendum? john: i don't think the anti-u.k. sentiment, i'm talking in a cultural level, it's not as strong as the anti-european
sentiment has been in the u k sorry, i was just checking if theresa may was coming-- yes. there is a point where they feel irritated that they have nobody with whom they can negotiate. they basically thrashed out a hard deal, giving theresa may what she said she wanted. the northern irish situation, without which, we would probably have a deal, is one entirely of britain's own making, where we should have had a far better grasp of the problem than the rest of the eu needed it to. at this point, they're getting irritated. in the case of macron, he is clearly has its own problems at home that he would like to deal with rather than worrying about these whinging limeys on the other side of the channel, and a lot of people would feel the same. despite what many brexiteers said before the referendum, that
britain would have all of the cards in a negotiation, i cannot believe how they can say that with a straight face, leaving it. but that's what they said. at this point, europe thinks it can withstand a no deal brexit. they're probably right. this would be an irritation for countries, number of but it will be a real problem for the u.k. caroline: and for british businesses. john: very much so. caroline: it's great to get your opinion. we have much more on the bloomberg terminal and bloomberg.com. ministerng you prime may's remarks as shoot as she starts speaking. now from the york and london, this is bloomberg. ♪
latest business headlines. apple has unveiled its second-generation air pods. they will be available while charging and has freed siri access. and apple will have a special guest next week when it makes a pivot into new services. it is goldman sachs ceo david solomon. the companies could discuss a partnership. apple and goldman are currently working on a credit card. and ford will build electric cars and self driving vehicles in michigan. the factory in flat rock is a symbol of change. , but it isslow sales adding workers to build next-generation vehicles. what do you make of this? joe: it seems like this is what all the carmakers need to start doing. you have to roll with the punches. seth: and the timing is good. trump was excoriating g.m. caroline: and happens to be on a
mark: i am mark crumpton. british prime minister theresa may is expected to make a televised statement shortly, after asking the european union , with britisht politicians deadlocked. the prime minister has asked the e.u. to postpone the u.k.'s departure until june 30. we will go to london live when the prime minister begins her statement. european council president donald tusk said today that an onension grant is contingent the u.k. parliament backing the brexit deal. although the hoped-for final success may seem frail,
and the brexit fatigue is increasingly visible and justified, we cannot give up seeking, until the very last moment, a positive solution. of course, without opening up the withdrawal agreement. mr. tusk will chair a summit of e.u. leaders on thursday. president trump has toured a tank manufacturing plant in lima, ohio. at risk of closure but is benefiting from administration investments in defense spending. this is the president's first trip to the state since last year's midterms, and the state was a rare bright spot for republicans in the upper midwest. key republicans today defended the late senator john mccain as a hero, against ongoing attacks from president trump. ohio, president continued his attacks, complaining that he did not get a thank you "for
allowing mccain's funeral seven months ago." senate majority leader mitch mcconnell did not mention president trump directly but said he misses his friend john mccain today and every day. johnny isakson wrote that the nation "deserves better" than the president's disparagement of mccain. global news and a tictoc on thaner powered by more 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. joe: a new study says that most of amazon's private label products are duds, not disruptors. the study looked at 23,000 products, and found that shoppers are not more b inclined buy amazonlined to brands. joe joins us here in new york. i think most people think of amazon as a brand-killer, but
you crunched all of this data. you seem to find that of all the brands amazon has put out, private label brands, they have not really caught on with otherers in the way things have. >> the fact that they make a brand does not mean they are going to be successful. "build it and they will come" does not work for amazon brands? romaine: why? >> i think it takes more to build brands. the fact that coca-cola is still valuable -- nike or i get coca-cola, but what about a spatula or a battery, or one of these things were we do not have strong brand associations with products? >> these are the exact products amazon has been killing at -- basics, cables. they launched clothing brands. does not work as well. caroline: are they launching their own clothing brands, or are they bring on board other
people making them, and making it is closer to amazon? what really is there business model? as: amazon really branched out, getting people to make products for them. is borrowing amazon's trademarks, sometimes having the brand launch a brand for the company. romaine: we talk about this because there is a lot of talk about potentially trying to break up amazon or rein them in in some way. social media at companies like instagram, they have a reputation, fairly or not, of being an incubator of brands. we have people who have gone from being nobody to being multimillionaires on instagram posts. can amazon ever get to the point where the public perception will be that it is an incubator of brands rather than a killer? juozas: i think that is what amazon in a way has to do. they have to try to get to this point. i think it is a long way to go to be able to do that.
what about with prices? there are a lot of categories where they have not been able to make headway. can they drive prices down so that even when people are buying legacyacy brand or the company, that those companies cannot get the margins they used to get because there is an identical product right next to it? juozas: one of the best examples for that is hdmi cables. a lot of traditional brands have been trying to sell to consumers, but paying safety dollars for a cable did not make sense. amazon has six dollar cables. all cables are the same. amazon is testing the price where the perceived brand value does not add consumer value. caroline: is amazon going to continue to try to get into clothing, try to get into perhaps the sneaker area, or is it going to stick with the basics where it can make a margin, and allow nike to sell
on its own website, and allow glossier and instagram to get into the clothing side? to continues going making basic products. at the same time, i think it will continue expanding its accelerator program, getting other companies to make brands. how does that affect the possibility that some of the brands, particularly larger brands that have the clout, bounty and sherman -- do they really want to be on the same platform if amazon is making generic toilet paper or paper towels? i shop on their a lot and i know certain brands disappear. anything, if in amazon basics product is a competitor to your brand, maybe you are not a brand at all. romaine: ok, well put. joe: let's shift gears and talk about the other big story in e-commerce, instagram getting into e-commerce more directly. there is already a lot of shopping on instagram.
we were talking about this earlier. obviously, one of the big problems is conversion. you might see something you like. by the time you click on it and go to the website and get out your credit card, maybe the sale is lost. can instagram solve the problem of increasing conversion rates with some of these direct consumer companies that are blowing up thanks to that platform? juozas: i think it is a no-brainer for instagram to add shopping. glossier and other consumer brands have built themselves on social media. caroline: i have to stop you there, i am afraid, because we have to go live to theresa may. may: it was the biggest in a credit exercise in our country's history. i came to office on a promise to deliver on that verdict. in march 2017, i triggered the article 50 process for the u.k. to exit the e.u., and parliament supported it overwhelmingly.
mp's have been unable to agree on a way to implement the u.k.'s withdrawal. as a result, we will now not leave on time with a deal on march 29. this delay is a matter of great for me. regret i am absolutely sure you, the public, have had enough. you are tired of the infighting. you are tired of the political games and the arcane procedural mp's talkingf about nothing else but brexit when you have real concerns about our children's schools, our national health service, knife crime. you want this stage of the brexit process to be over and done with. i agree. i am on your side. it is now time for mp's to decide. today, i have written to donald
tusk, the president of the european council, to request a short extension of article 50, up to june 30, to give mp's the time to make a final choice. do they want to leave the e.u. with a deal which delivers on the result of the referendum, that takes back control of our money, borders, and laws, while protecting our jobs and national security? do they want to leave without a deal? or do they not want to leave at all, causing potentially irreparable damage to public this not just in generation of politicians but in our entire democratic process? it is high time we made a decision. so far, parliament has done every thing possible to avoid making the choice. motion after motion and amendment after amendment has been tabled without parliament ever deciding what it wants.
all mp's have been willing to say is what they do not want. mp's willtely hope find a way to back the deal i have negotiated with the e.u., a deal that delivers on the result of the referendum and is the very best deal negotiable. and i will continue to work night and day to secure the support of my colleagues, the dup, and others for this deal. but i am not prepared to delay brexit any further than june 30. some argue that i am making the wrong choice, and i should ask for a longer extension to the end of the year or beyond, to give more time for politicians to argue over the way forward. that would mean asking you to vote in european elections nearly three years after our country decided to leave. what kind of message with that send? and just how bitter and divisive with that election campaign be,
at a time when the country desperately needs bringing back together? some have suggested holding a second referendum. what youelieve that is want, and it is not what i want. we asked you the question already, and you gave us your answer. now you want us to get on with it, and that is what i am determined to do. caroline: there we have it, prime minister theresa may speaking, and seemingly learning very little. she reiterates that she does not want to push brexit past june 30, that she wrote to donald tusk of the e.u. asking for a delay to the exit to june 30 rather than march 29. she regrets that brexit has to be delayed. she blames mp's overall for this, saying that it is mp infighting behind the delay.
she wants or night and day to get the dup, the iris side, and the conservative pre-brexit side on board to get for the third and final time her own deal. interesting isnd she used strong language but did not really say anything. she did not give us a path forward other than that we have until june 30 to shore this out. joe: that is exactly right. i think as people were wondering -- will she call another election? will she offered to resign? ?ill something happen it is really we have to do it now. if something changes, that is unclear. caroline: she will work harder to get it done for the full deal. 149 mp's have voted against it. to: if there are not going be extensions further, that concentrates the mind's a little bit. is that enough to switch those votes? romaine: possibly, but if they
could not get it done by the end of march, why would they get it done by the end of june? and what is her future in all of this? what is her role when we get to june and this is not done? caroline: she is saying as prime minister she is not willing to go past june 30. many people feel that is basically her saying she would resign if brexit had not been enacted. the pound has barely moved on the back of this against the u.s. dollar. joe: not a lot of pound action because she did not really say anything, nothing that would be dramatic. romaine: we are at a point of stasis for the market right now, looking at what is happening. you have to wonder what it is going to take to move things forward, barring a resolution. joe: joining us from the phone in london is the editor of bloomberg opinion. did notpective was it feel like theresa may set a lot. what did you take away from her brief comments? >> that is exactly right. of -- itperspective
was a nothing burger. done this before. she speaks to the nation. her idea here was to go above the head of her squabbling mp's in parliament and talked to the people, and say i am trying to get something done, but your mp cannot decide. then she repeated the choices that we either leave with her deal, that britain leaves with that britain cancels brexit, revoking article 50. she said that would do irreparable damage to the public left, but she has really the no deal option on the table. i think that is what markets would be quite nervous about, that that is still the default. the e.u. has said it would only 30. at an extension to june ont leaves the deal still
the table. caroline: it feels like a blame game for the country to hear are whatfeels the mp's put the brake on brexit, or she would have got it through by march 29. what can the e.u. do? would givek the e.u. any concession to make the motion in any way different? we know john murphy, the speaker of the house, is not going to allow her to basically bring back the same proposal for a third and final time. i think what the e.u. will not do is reopen the withdrawal agreement that contained some of those controversial elements of her deal, which has to do with the irish border. to give her something on the nonbinding part of her deal, the political declaration, that may be sufficient to get parliament
action. i do not think procedure is going to help put that deal back before parliament. her.will find a way for we can say about the e.u. they are pretty fed up. fear is that the divisive politics in the u.k. will pollute the water more broadly in the e.u. the e.u. also wants to avoid no deal. romaine: t thank you,herese -- thank you, therese. we will continue discussing this with julian mcmanus, a portfolio atager and research analyst janice henderson, where he manages the overseas strategy. whatn, when you hear theresa may has to say and you look at what has happened, what has transpired over the past few
months, how do you think market sentiment is going to shake out as we wait on some sort of resolution between now and june 30? i think the market reaction in general is going to be mildly positive. we do not get a lot of new information. the content of what we said is were expecting. all we have done is kick the can down the road a little bit. what they have done is to open up a wider range of outcomes, if you like. some of those outcomes may positive, evene if they are not fully priced in yet. -- even with the uncertainty in the u.k., the economy is growing faster than germany. inflation is mild. employment continues to rise.
real wages are impressive. are things that bad fundamentally, if you strip away the noise? julian: i don't think things are that bad fundamentally in the u.k., with most of the metrics you mentioned comparing favorably with the rest of europe. u.k.t is the case that the equity market has underperformed the global market since the brexit vote. i think if you look at the currencies, sterling and the ftse, brexit has not been positive for the market. now there isat some uncertainty injected around the brexit outcome, that could be taken positively. joe: thank you very much. julian mcmanus at janice henderson, appreciate your insight. time for smart charts, where we walk through the latest market analysis with the street's top technicians. let's turn it over to abigail
doolittle. abigail: i am thrilled to introduce john roe, a technical analyst. you have sell side experience, buy side experience. you are "chartlife" on twitter. very nice. you have three charts with you. let's start with the shanghai composite right over here. talk about what you are seeing. john: we have the shanghai composite on a weekly basis, going back to 1990. another indicator is not on the chart. you can see that we are now in another cycle, going back to 1994. each of the cycles over this time have seen the shanghai composite rally really sharply. you have got 100 plus percent, 200 plus percent. the one from 2004 was over 500%. again here, you have a 200% rally, or a 150% rally.
we think we have the turn up here for the shanghai composite. we like china. we like the shanghai composite. we actually like it better than the s&p 500. abigail: how high do you think it could go? john: it would not surprise me if i got to the 4000 level. to expect something bigger would be a little extraordinary for me. 4011, it would not be that big a deal. i think 4000 is very doable. abigail: do you like it better than the s&p 500? let's take a look at your long bond chart. monthsor the first few of the year, we kept saying how is it the u.s. rates are going to rally if other g7 rates are going down? the likelihood is that they are not going to rally. this is the price of a 30 year bond and i think it has a nice technical setup. i am showing this chart not to say it is better than the s&p 500. it is just to say it is pretty good. if you have a question about bonds, that means yields are
going to go lower. i think the fed has already told us that. the bond prices set itself up to do that. abigail calling you expected to go up to 150, 155. john: we think rates on the 10 year will go to lower. we think this could get up to the 155 level on a price basis. abigail: this s&p 500 chart is pretty interesting. very telling, why you might like china better. john: we have a little negative divergence. we can see the indicator in right, which is the percent of the stocks above their 200 day moving averages. it is a lower high relative to a month ago. the most recent figure is 43%. a month ago, it was 48%. the most recent low was 38%. i would say in order for the s&p to have a durable push, this indicator is going to have to get above the 50% level. abigail: in other words, the breadth is not great.
joe: now to asia. we heard from the fomc earlier. let's check what it means for asian central banks. shery ahn has the latest. everyone's question -- you are already laughing. i was going to say what is the spread on the indonesian rupee. what does it mean, though, for asian central banks. asian central banks had a hard time because they had to follow the fed higher.
capital outflows rem currencies declining, taking a hit, they had to hike so much. 175 basis points. will they be able to unwind that? it looks like at the moment not just yet. there are some many other issues the country's face. philippines has really high inflation. inflation has been a problem. finally, it is coming within their inflation target. in february. they are not that comfortable to be able to use and take it the other way around, right? issues,e their own including indonesia, for example, where the currency can take a hit. romaine: the central bank -- shery: they held steady. thailand has elections coming up for the first time since they military coup five years ago. we are also expecting elections in indonesia. they have all their
idiosyncratic issues. caroline: does asia in general look at what the fed has done and the like -- there are a lot of long weeks. shery: yes, especially when emerging currencies can rebound. you have to keep in mind they are at a nine-month high, which means it could hurt their economies. it is a double-edged sword. romaine: we will bring you back in april to talk about the indonesian rupee. shery: right? sorry, we thank you. for more on the stories, do not startingbreak asia," at 6:00 p.m. eastern. year leaders will meet in brussels or a meeting dominated by brexit. joe: and i will be watching economic data, more of that. numbers for u.s. jobless claims. romaine: and we are back to brexit again, the boa announcing its rate decision. joe: bloomberg technology is up
emily: i am emily chang in san francisco, and this is bloomberg technology. coming up, europe slams google with another fine, totaling $1.7 billion. final do and possibly you penalty, but regulators are scrutinizing other tech giants like apple, amazon, and facebook. apple continuing its hardware revamp. the company unveiled a second-generatn