tv Bloomberg Markets Americas Bloomberg August 8, 2019 10:00am-11:00am EDT
10:00 a.m. in new york, 3:00 p.m. in london, and 30 minutes into the trading day in the united states. from new york, i'm vonnie quinn. guy: in new york, i'm guy johnson. welcome to "bloomberg markets." vonnie: we are looking at wholesale inventories for june, the final reading. economists were looking for a gain of 0.4%. actually flat. month over month, that is down 0.3%. a revision to the previous month, down 0.6% instead of the initial reading. of 0.1%. so generally negative -- reading of 0.1%. negative wholesale inventory data. the yuan fixing just over the seven level healing bonds a bit overnight. to 1.76% on some selling. the s&p 500 up three quarters of
1% despite a couple of earnings reports that were really disappointing, including the kraft heinz report. management they are saying that kraft needs a plan in place. a new ceo, of course. for now, definitely a lot of selling. symantec is up about 10% on reports that broadcom may be very close to some and a -- two symantec.ith in germany, a pop on 10 year yield. germany may be thinking about the possibility of maybe breaking the black budget, the budget.z european bids are higher.
euro-dollar leading the story. 1.5%.crude also up vonnie: we are joined by bostick.'s romaine we had these rumblings out of germany, and in the u.s. we are looking at china still. romaine: this would be a huge deal in germany, but this is something that was talked , whichall week long would be a complete game changer when we talk about the direction of rates and where they were. obviously that is really what fed into the market selloff earlier this week. chinaou also had providing a little bit more comfort, at least in the interim, that they are going to support that level a little more than what people were speculating back on monday. that gave a little bit of underpinning in the market. not to throw water on it, when
you look under the surface, some of the buying isn't all that optimistic. guy: decent claims number today. it supports the idea that the u.s. consumer is still on track. the big question is can the u.s. consumer hold up the world economy? romaine: the world economy, i don't know. there are some crocs in the consumer foundation, and this is what folks are looking at. do you really want to see the business side of the equation come back into this? right now, whether you are looking at ceo sentiment, manufacturing indicators, services indicators, you are not seeing the business side of the equation, at least in the u.s., hold up. the u.s. consumer is going to have to -- it is going to be hard for the u.s. consumer to prop up what is going on in the rest of the world. you look at some of the sectors that got us to this point of the last couple of days, that rebound we had on tuesday and the reversal wednesday, which
was impressive, but we are talking about consumer staples, defensive. vistas, thesed aren't going to lead us to the promised land. you need participation from the big players, and right now you aren't seeing the big players in there. it just isn't all there. you are seeing people willing to come in and buy this dip, but they are not buying the growth stocks we saw in previous bounces. we are seeing the move back into defensive positions. you are still seeing a lot of volatility in the treasury market, the highest level since summer 2016. yields still seeing bouncing off that 1.6 level. still seeing a lot of buying coming into u.s. treasury. guy: what are people telling you? are they giving you any sense that we can find a flaw in that 10 year yield?
what is going to stop it from falling? romaine: what's going to stop it from falling's fiscal policy. that's what we've heard time and time again, that this isn't any more about the economic conditions in and of themselves. this is about whether central banks are going to get support from the fiscal side, and that could reverse or put a little bit of a buffer underneath that. we see a little bit more pressure not only in the u.s., but obviously in europe and asia as well come on rates. romaine, thank you. that is romaine bostick. let's check in on the first word news with kailey leinz. kailey: the national rifle association has warned president trump against expanding background checks for gun purchasers.
ceo wayne lapierre called the president after mass shootings in texas and ohio. the nra represents an important part of president trump's base. saudi arabia looking for a way to stop the seven-month slide in oil prices, speaking to other producers to discuss their options. the saudis have already cut production more than required on the deal between opec and its allies. in italy, deputy prime minister matteo salvini is ratcheting up pressure on the coalition government, wanting his five-star partners to yield to his policy demands. if not, he could dissolve the party sharing agreement. wexner saysleslie he was deceived by former money manager jeffrey epstein. the founder of the victoria's secret parent company. epstein has been jailed on sex trafficking charges.
wexner says he was in the dark about the alleged wrongdoing. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm kailey leinz. this is bloomberg. misse: coming up, don't our exclusive interview with henry mcvey, kkr head of global macro and asset allocation. that is this hour. this is bloomberg. ♪
the dow jones joining the s&p 500 in positive territory this afterg, up 5/10 of 1% that big reversal for the s&p 500 from negative to positive territory yesterday. europe also looking good, the stoxx 600 heading for its best day in some four weeks. china fixing the yuan at a stronger-than-expected level. theite the evidence of reemergence of risk appetite, traders remain a little jumpy. other asset also getting a bit of help today. take a look at the bond market. this came from the german government, reports from reuters they are considering issuing new debt to finance green bonds. we are also hearing that they don't plan to abandon their plans for a balanced budget. nevertheless, look at the german ten-year, reversing and snapping a nine-day losing streak. for oil markets, the knight in shining armor was the saudis
saying they are not going to countenance any further declines and are looking at ways to stem that rout. there's a long way to go, despite today's gains for brent. back to equities, take a look at what is happening in the u.s. earnings still playing a big part in this story. loss comen expected up with a lot of analysts saying this might help convert some of the skeptics. you can see a pathway to profitability. kraft heinz down 13%, opening at a record low because of some steep sales declines in the first half, and saying they are looking for a long-term plan. that's got to find that pronto. guy: thank you very much indeed. i want to go back to the german story and where we are with that. over the last hour, we seen a rotors report suggesting the german government is looking to break the black
budget and spend money on green projects. everybody is waiting for germany to deliver some sort of fiscal policy, some sort of change. there's been no evidence thus far. we've had a report suggesting that germany says there's no decision to give up the balanced budget. doesn't mean they are not going to do it. there is just no decision at this point, that happen. tina fordham, city global -- citigroup global political analyst, joining us now. the german economy is in real trouble at the moment. green bonds are interesting because it also satisfies a number of political objectives. tina: i think it is a very shrewd move on a number of levels. you are right, germany is constantly criticized for not spending enough. some fiscal stimulus coming out of germany would be very welcome. , asthe politics of the move i say, are very shrewd. the green party the best in germany, and green parties
across europe. it was really the untold story of the european parliamentary election. it is not the first time that the cfu would have -- that the cdu would have eaten the lunch, so to speak, of the green party. if you look at voters, particularly in germany, addressing climate change is the top concern, more than the economy or other factors. so that could be very smart politically and economically. guy: the french are certainly paying attention to it as well. let's ask a broader question. global bond market has been in freefall of late. there's fear about what is happening on the trade front. there's fear about what is happening to the global economy. when you look at what is happening politically, do you see anything that could halt the freefall that we are seeing at the moment? yields are collapsing. germany is negative from the
front to the back of the curve. there's negativity all over the place. what is going to change it from your perch politically? tina: hope always springs internal with traders that you will get another positive sounding tweet from president trump about his friend chinese president xi or something like this. we've looked at the impact of presidential tweets on markets. it is something that is quite new. however, i don't think i have a lot of optimism. in fact, i've been bearish on prospects for u.s./china trade deal all year, and i thing now we are not likely to see a breakthrough this year. it may not come until quite close to the u.s. elections in november 2020. i think markets got way out ahead of the politics on china trade, and haven't appreciated that there's a lot more at stake
here than buying soybeans from american farmers in the midwest or a handshake and a photo op. vonnie: just another question on germany, it is interesting timing because "the ft" has an editorial today pressuring germany to come up with some fiscal stimulus, saying now is the time. then we have this reuters report that the official german spokesperson rejects. not exactly the report, but rejects that there might have been a decision made. where is this emanating from, and what is the reluctance from germany do not have a balanced budget? if public spending is relatively low compared to other european countries? tina: this is the political culture of germany. you look at the way that the german press portrays language about central-bank action, etc., penalty for savers and things
like this. this runs very deep indeed. think this is as much a religion of the changing politics in germany as anything else -- a reflection of the changing politics in germany as anything else. vonnie: then what they allow germany to go into recession? if that is the end game, would anything be done to avoid that, or would german politicians as a whole decide it was ok for that to happen? certainly in the u.s., there is a big effort to not have the u.s. go into a recession. the dynamics are quite different between the two countries on that front. i think you would be hard-pressed to find any politician who would say they are willing to let the country slide into recession. it is a question of the tools they are willing to deploy. but i think one lesson we can go back to from the global financial crisis is that things
actually have to be quite bad. politicians tend to have to be looking into the best before they are willing to take bold, preemptive action. that's why i think the pressure is going to come from the need deal with the political. for example, increasing military spending, which is even more controversial in germany. guy: it is also one in the eye for the president of the united states. he has pushed back on climate change. tina: he doesn't believe in it. [laughter] guy: to that point, in the past orn we had economic crises things have gotten difficult, we've had cooperation between various countries. the climate crisis is an obvious one. there is a g20 convened here in london. would such a meeting be
possible with president trump in the white house? tina: i would put it slightly differently and say international cooperation to tackle global crises isn't something that can be revived in the current environment of political fragmentation, of strained relations between the u.s. and europe and other partners. i think the answer is we would have to get to a pretty dire situation, and remember that the last couple of g20 summits, president trump has refused to sign the communiques. then again, he hasn't governed through an economic crisis. guy: is europe on the same page when it comes to the same thing? if the germans are going to spend money, would the italians be able to spend money? i wonder whether europe is together enough at the moment to
find its way out of this crisis. the italian government is hanging by a thread at the moment, it seems. tina: well, the italian government is going to be headed for new elections, whether this autumn or the first half of next year. that seems quite likely. italy is in such a different state politically then other countries in europe, whereby both of the mainstream parties had their worst result in 30 years in the last italian elections, and the fringe parties ended up together with a majority. that hasn't happened anywhere else in europe yet. it might happen here in the u.k., as we now have four, in they five parties first past the post system. so the ability to reform or pass important measures like you are talking about requires a degree of political consensus. that isn't present in very many places, and also doesn't tend to emerge until things get pretty
bad. butets may be in freefall, to the man on the street and the state of the economy, that hasn't passed through yet. guy: thank you indeed for stopping by here to see us. tina fordham, citi's chief global political analyst. vonnie: still ahead, factor funds are popular. our weekly factor funds discussion is next. this is bloomberg. ♪
♪ vonnie: live from new york, i'm vonnie quinn. guy: in london, i'm guy johnson. this is "bloomberg markets." our weekly factor funds segment. low vol factor funds are proving once again to be popular during the recent market drop. here to talk us through it, tom psarofagis. up.ds go down, prices go i am in no way shocked that some
of these low vol companies are doing really well right now. thanasios:ous -- a what's been happening, especially this year, is because all of those bond proxy sectors have been doing well, there was buying of low vol even before this drop. even as the market was making new highs, usually you would see money come out of low vol. but money has actually been piling at ahead of this market drop. hindsight is easy to pick this out, but it was almost a precursor of what was to come in the market. vonnie: why these instead of something alternative, tom? athanasios: to give you some context, there is one of these
low vol that has $30 billion in assets. that is massive. we think these funds have taken the place of a lot of money that would have otherwise gone to alternatives. i think people have given up on alternatives, and they still want to maintain that market exposure, and low vol lets you do that. you can still play in the market a bit, but you have a cushion. when advisors or wholesalers are going out to talk to clients, it is a much easier sell and may a complex alternative fund. you see a lot of the flows that have maybe gone to low vol that would have been going to alternatives. guy: what else is the factor story producing at a moment? the market is clearly gyrating. we've already discussed what is happening in the bond market. we've just come through earnings season. athanasios: i think the main takeaway is defensive. low volput quality and as the main factors. guy: what does momentum look like right now? athanasios: the issue with
momentum is there's always a lag. a month from now it will go into the stuff that low vol is hoarding now. momentum is still very heavy tech, so things that got hit during the selloff, just because it always has a lag. vonnie: tom psarofagis, thank you for joining. tom is with bloomberg intelligence. don't forget, you can check out factors to watch on your by . the function ftw bloomberg has learned two hedge funds want to raise $15 billion to help pg&e out of bankruptcy. the california utility filed for bankruptcy back in january after damages from wildfires were
blamed on its women to. bloomberg has -- were blamed on its equipment. bloomberg has learned that broadcom is set to buy a portion of symantec. squeezed by aere supply gap. that is your latest bloomberg business flash. still ahead, lift bancshares driving higher after a second quarter -- lyft shares driving higher after a second quarter that beat expectations. this is bloomberg. ♪
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finance minister -- formerly the finance minister in italy. that is what has been reported by an italian newspaper. as more details emerge, we will bring them to you. the unicredit chairman has died, long-term servant of the italian government as well. let's get first word news with kailey leinz. kailey: the trump administration a list of to finalize chinese goods for additional tariffs. reportest jobless claims indicates the u.s. jobs market is holding steadfast. first-time applications for unemployment benefits fell to 9000, the second drop in three weeks. claims are hovering above a 49 year low.
cutting down trees is making the world hotter and hungrier, according to a new united nations report on climate change that raises the issue of security. when they were asked, scientists mentioned brazil's recent deforestation of the amazon. mortgage refi fever is sweeping the u.s.. that has sent many previously hesitant homeowners running to their brokers. 70%home purchases make up of the business at cornerstone first financial in washington, d.c. these days, it is 70% refinancing. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm kailey leinz. this is bloomberg. vonnie: thank you. second quarter results for lyft were better than expected, but forecastingis still a net loss this year.
will report its earnings later today. both ride-hailing companies are seeing their shares rise. ngoomberg analyst mandeep si joins us now. left bank surprised to the upside. why -- lyft surprise to the upside. why? seems to haveocus shifted from margin improvement to grow the top line. my expectation is they are not going to expand geographically now. they will just focus on the u.s. and canada markets to expand the margin. to justify the evaluation, this has to be more than a taxi company. there's lots to talk about these companies being ecosystems. one of the progress in the numbers towards becoming an ecosystem?
mandeep: they've used their supply-demand data to primed out -- to find out which of the preferable segments. airport rides, corporate rides, medical transportation. at the end of the day, they will have some sort of pricing power with the users already on the platform. the fact that revenue provider group 23% and they said it would grow the same next quarter is a sign of higher engagement with their existing rider base, and some pricing power that they are able to raise prices. vonnie: widely different markets. lyft is more to domestic. uber looking for international growth. is there room for both players in this? mandeep: uber has a much better strategy here because it expanded to do food delivery, now their fastest-growing business at over 100%. over the long-term, the way these businesses are going to survive and eventually get to
profitability is by bundling services. as a standard ride-hailing company, it is hard to stay profitable, and grow margins to double digits. you have to bundle services, and i think that is where uber is better positioned. guy: we saw what happened with beyond meat with regard to lockups. how worried should investors be about the uber lockups? mandeep: this is the case with any high-profile ipo. people have come after the six months, some pressure on the stock, and this is no different. long-term, what investors care about is the pastor profitability. , uber is in this case probably better positioned because of their broader platform and the international growth. with lyft, you will see a deceleration in topline. the fact they are focusing on
margin means the topline line is likely to decelerate in 2020. i think investors will focus on fundamentals after the lockup period. vonnie: bloomberg intelligence's mandeep singh, thank you for joining us. guy: coming up, kkr's hotspot for investors. our exclusive interview with henry mcvey. that's next. this is bloomberg. ♪
vonnie: kkr is announcing a new macro insights report that focuses on geopolitical hotspots for investors. bloombergs erik schatzker has an exclusive interview for more details. henry mcvey,e with head of global macro and asset allocation at kkr. he's the author of this report, hotspot. there's no bigger hotspot on the planet for investors than china. most people who have a view on china are armchair porter backs -- armchair quarterbacks. you go there regularly. you meet with people in the real economy and gather facts. what is the single most important thing you learned from your latest visit last month? henry: not to date myself, but i've been going since 1995. with china, the government is keenly aware of the global slowdown in government manufacturing. about 75 measures , both monetary and fiscal. time two, relative to last
we talked about it, it is clear that multinationals are pursuing alternative supply chains. they are going to thailand, korea. i think mexico, ironically, given the trade tiffs with the u.s. right now. it has actually been the number one beneficiary of supply chains moving out of china, and addition to vietnam. the third important thing, which i think is a very testable chinese companies don't want to rely potentially on either u.s. counterparts, or in some instances, european. 5g is clearly the battleground for that. you look at the huawei numbers at were just released come where domestic sales of handsets were through the roof, but global sales had abated. we spent times with executives across the technology,
industrial, automotive sectors, and other small, private companies, and there is a clear trend toward that. we've been in china for years. we typically own about 20 companies. i try to spend a lot of time there just to stay up-to-date. erik: there's a lot to unpack their. let's start with mexico, the trade war trade. henry: i think mexico is a clear beneficiary. erik: how do you trade it? currency? henry: no. i think you see mexico will be a beneficiary in terms of actual exports. they will take share from other parts of the globe. what you're seeing generally, and i think this is an important point for investors, is if you take about a pan asia economy economy, an americas china only has 18% of its economy today in exports. 10 years ago it was 36%.
the u.s. is actually just 12%. so they are really large domestic economies. what you're seeing across both of those economies is strong consumption on a secular basis, but you're seeing them change their supply chains. i think that has really long-term implications for investors. i think the battleground will be 5g. erik: this week marked an escalation in the trade war. china, if you will, turned it into a currency war. was that a clever or stupid thing to do? henry: i think it is the reality. the u.s. is going to implement round four, the final $300 billion in tariffs. a lot of that is consumer related. china doesn't have the ability to implement tariffs, so the vehicle they have is the currency. ultimately, i don't think china is going to do a large devaluation. vonnie: they are not going to --erik: they are not going to eight. henry: i think they are sending
a shot across the bow that they have other tools to match what president trump is doing on the tariff front. erik: speaking of other tools, let's talk about them. if this situation keeps escalating, what happens next? exports ofs. halt advanced technology to china, bringing dte and -- bringing zte and while way to their knees -- and huawei to their knees? or does china retaliate and cut off reserves to rare earths, hobbling the industrials? henry: most executives are watching this situation. one of the facts we feel very strongly about is if you add up all the tariffs, and say president trump does auto tariffs on top of that, that still does less on gdp than a 10% pullback in capex.
i think investors need to know that delta. the point i made about global pmi's slowing is a reflection. that is the number one reaction. we talked before about trade. we are opening up the market, but we talked about rule of law and national security. the skirmish is really around rule of law right now. in the u.s., there are far more chinese foreigners in high-tech areas coming into the u.s. there's less capital coming into the u.s. on the chinese side, there's 200 billion dollars of goods and services sold into china, and that is being a little more haphazard than in the past. that is really where the battleground is. you may not see it every day in terms of flareup. i think what people talk about his trade, which is to high-level. erik: so there's less chinese capital coming into venture and less into real estate, for example. how long until western capital is no longer welcome in china? henry: i think when people say
it is a cold war, it is not like it was with the u.s. and russia. ultimately, china and the u.s. are aligned at the hip economically. i think the idea that china's massive consumption possibilities and -- consumption population wouldn't want u.s. goods is unfounded. that would not happen. what you need to do is a line where the government and the private sector need that expertise. i think you will see a bifurcation where some companies double down on capex because they have an advantage and can partner with the chinese economy to do well, and others will fold their tent. erik: let me pivot to macro for a moment. the 30 year yield is at or near a record low. we haven't checked it in the last 30 seconds. is that a cause for alarm? henry: i think there are a couple of forces at work. i do think that when we look back on this period, i think we will say we were in a global manufacturing recession.
you look at the data out of germany, the tightening in india, and some of the things on the ground in china, that is for sure. the point i keep in for sizing is focus on the german bund. that is negative. points.is -60 basis nevers. 10 year has traded historically more than 30 points above that. i think there's demographics, global qe, and technological change creating a lack of inflation. erik: pimco is making the case realu.s. treasury yields could go below zero. do you share that view? henry: i don't share that view. i think you would have to show a large nominal decline in gdp.
the second half of 2020 would be a real down period . in an upside scenario, that doesn't get us to a nominal gdp where 10 year yields and nominal gdp are aligned. i'm not in the negative rates camp for the u.s. 10 year. clearly, we believe the fed is going to continue to ease. only had four other times in history where the fed funds is above the two-year, and every time the fed has cut. i don't see the long end going negative. erik: henry, great to see you. henry: glad to be here. thank you for the time. erik: that is henry mcvey, head of macro and global asset allocation at kkr. vonnie: a lot to digest. thank you for that. that is bloomberg's erik schatzker. president trump tweeting about the u.s. dollar being kept at
high levels by the fed policy stance. he says, "they are calling it wrong at every step of the way, and we are still winning. can you imagine what would happen if they called it right?" mentioningnt also companies like caterpillar, carng, john deere, and companies, saying "a stronger dollar is making it difficult for our great carmine thatcher's and other to compete on a level playing field -- our great car manufacturers and others to compete on a level playing field." futures are in focus next. this is bloomberg. ♪
ino, past trading partners -- path trading partners. is a stabilization in oil prices going to hold? bob: i don't know that it does. i don't know what they can do, and i don't know who they are going to get on board to join them. they are already well below their quota for the production cut. iran has actually boosted production last month to about 4.6 2 million barrels. there's a little of worry about that in oil prices built into the excess china tensions we saw the last couple of days because china is going to be one of their biggest purchasers of oil. you get the excess iranian crude, which can go to china. that wheel is now on the market. i'm not sure what they can do -- that oil is now on the market. i'm not sure what they can do about it.
the only hope is falling rates eventually affecting the flow of shale coming out of the u.s. we've already seen the eia lower their estimates. vonnie: would you be staying on the sidelines, or is there some way to trade this? bob: the way we've been trading putstely has been to buy on the rally as the vault goes down. currently, crude oil spikes and collapses have been off of news like tweets or like existential in the strait of hormuz or middle east in general. those are difficult things to play, even if you are using the minifutures. for us it is in the options world, but that is not our normal course of action. vonnie: bob, thank you for joining us today. cchino of path
trading partners at the cme. dustin johnson is currently ranked number seven, but he has plans to edge up some colleagues and move into contention in the pga tour. we caught up after a practice round. dustin: i have enough going on with myself, so i try not to do -- i try not to look at what the other guys are doing. you watch the guys that are doing pretty well, but golf is all about you and your playing the golf course. . you might try a lot of different things, but just because it works for someone else doesn't mean it is going to work for you. vonnie: so what are your main goals that are achievable right now? have you set your eyes on a major, or just to win the next available tournament? dustin: my goal is this week at
the northern trust, that i have a chance to win. that is my goal every tournament, every week. it doesn't matter where it is, what tournament it is. obviously, playing well in the playoffs, especially the first couple events, i want to move up. i'm in seventh. i want to get closer to the top spot, if not in the top spot, going into the tour championships. this year it is a bigger prize its structural, but different this year. everyone has a chance to win, which is kind of cool. but obviously if you are in first, you start ahead of everyone. vonnie: how do you guys do it? it feels like there's a group of you that are in the top 10 always. some come in and out, but you guys are so complete the reliable when it comes to performance. how do you do it? ,ustin: it's a lot of hard work
a lot of time on and off the golf course. like i said, you've got to get a recipe for you and what works. throughout the years, obviously i've kind of got that figured out where i know what works for me, and how to make myself improve and play well all the time. workingbalance between and taking time off see you are rested, recharged and focused, and ready to play. vonnie: pro golfer dustin johnson, who is currently four under through 10. play has just gotten underway. the hour,ur stock of we are focusing on thyssenkrupp. here with the details, emma chandra. emma: we are taking a look at our stock of the hour. they announced worse than expected results, but also plans to sell some divisions today. that's why we are seeing a bit of a rally in the stock today,
up 6% at the highs of the session, on course for the best day in six weeks. thyssenkrupp is among the last german conglomerates, in everything from steel to submarines, but investors have blamed company sprawl for falling profits, and have asked for streamlining. today they acquiesce. the ceo acknowledged that one unit is drawing interest from private equity and rival elevator makers, who said they will evaluate the options. still, these sales won't solve all of the problems. they continue to under perform other blue-chip german companies on the dax. it faces headwinds including massive price increases for raw materials, particularly iron ore
, continued high import pressure for steel, and downturn in the automotive sector. what the ceo said today is increasingly weaker global momentum. vonnie: thank you. emma chandra with our stock of the hour. up in the countdown to the close, patrick armstrong of plurimi wealth joins us. the nasdaq is up 1.5%. the vix back down to 17.5. this is bloomberg. ♪
european trading day. from london, i'm guy johnson. vonnie: from new york, i'm vonnie quinn. this is the european close on "bloomberg markets." guy: a number of things happening over the last couple of hours, including a rotors report that the germans are may be considering spending a little bit of money when it came to green projects. we have since seen not a denial, but a kind of walking back of that story by the german government. nevertheless, we did see a spike in german yields. that has now faded. you've also got to roll this into the other story from the last half-hour from the president of the united states. he wants yields to be lower. that is going to have an impact when it comes to the ecb. european stocks are bid. the euro now turning around. it is positive. brent now up by just over 2%. vonnie: we have an evolving story here in the u.s. markets are little