there is 30 minutes left of the trading day. from bloomberg's european headquarters, i'm mark barton. vonnie: and i'm vonnie quinn. this is "bloomberg marktes: european close." mark: these other stories we are are watching. we speak with gilbert. theresa may begins a major overhaul of her cabinet. she prepares for the next round of high-pressure brexit talks. have an exclusive interview on how the tax laws and changes

will affect business in the year ahead. away from thetes monday session. for the fourthng consecutive day, best run since november 1 after the strongest weekly gain for the european benchmark. since may it rose. currencies falling against the dollar. you have bond commodities closing. we have much to chat about. there is a big to expand medicines for blood disorders. novo.ls -- comes as it has joined a flood of similar treatments from the biggest drugmakers. competition is heating up. economic measure of sentiment. from 2012, heading in one direction. it is the highest since 2000.

added to measures of economic activity, the strongest in seven years. employment continuing to decline in the eurozone. growth in 2017 was the fastest pace since before the financial crisis. it is forecast to be almost impressive -- as impressive. records. showing that is billy blue. -- that is the blue. it has 120,000 contracts. dayinutes into the trading in the u.s.. abigail, how is it moving? abigail: there is mixed trading as well. the dow and s&p down slightly. the nasdaq up modestly. on the day, we have occurred highs out of the dow and the

nasdaq. all of this follows last week's trading. some of theto winners behind small gains. up 3% on a time is driving. full slaton and uber have selected nvidia for self driving cars. they will come together to create an autonomous car in china. amazon is higher as credit swift raises its target. facebook higher due to the biggest move in the nasdaq. we have tech losers out there. cap movers, big moves even though the market caps may be small. we are looking at gopro, down 23%. this after the camera maker slashed its fourth-quarter revenues to $340 million, 28%

below what they were looking for. and/or and snap downgraded. -- pandora and snap downgraded. snap is 20% below its ipo price. it was the tech ipo of last year. no comment. a deeper look at markets. joining us in our new york studio is martin gilbert, chief executive of aberdeen standard investment. you are possibly listening to the market report. days where s&p 500 has been trading within 5% of its peak. does that continue and for how long? martin: i wish i knew the answer to that. the global growth environment is pretty benign. 3.8% next year, u.s. growing.

theoretically, the market should continue to rise. i am a bit worried that it is a bit too much complacency. that always worries me. is good reason for the complacency. we have had a fix index going nowhere -- vix index going nowhere. liquidity seems to be holding up. what could cause a ripple? martin: perhaps in the middle east or wherever it may be. that may be the thing that shakes the market. it is always something that comes out of left field that you don't expect that affects markets. in 2006, you made a a yearg call about cbo later. you made another pressing call about credit default swaps. we know what happened after

those years. is there anything of a similar magnitude? are you looking to pockets of the market that are causing similar concerns or close? we see i don't think that euphoria that we saw then and expecting markets to go up. people are confident about the economy, but they are complacent. they are also worried, and i think that is good. cbo type ofany real event on the horizon great my only worry is government bonds looks very expensive. beholders of them tend to be holding them for reasons that they have to hold them to hedge unknown liability. i don't think they will be big sellers of government bonds pay mark: even if the fed --

government bonds. raisesven if the fed three times or more and even if the ecb takes its foot off the gas and maybe the bank of japan does the same? you don't think that will shift bond market sentiment russian mark martin: that would shift bond market sentiment. -- sentiment? martin: that would shift bond market sentiment. i think all of the things are priced into the market. doesme ways, if the fed not raise rates this year, that is more of a worry for investors. vonnie: you mentioned bond markets. we are seeing synchronized growth. where are you most worried about being overvalued or where are you getting rid of bonds? euros: it tends to be the

or the u.k. or japanese or the u.s.. .here t you can still pick up in india a 7% yield. it is very much the euro and u.k. of the world. vonnie: markets have been popular in emerging bonds. does that continue? if you are worried about geopolitical risks affecting other markets, why not emerging markets? martin: onef the -- of them is emerging. we do have people on the ground in countries covering it. the key is to keep focusing on the companies. you can focus on where there

oup.t be a c it is important to focus on the underlying companies and business model in emerging markets. would you change the perception of your now merged company? em specialist? martin: the merger went well. it is still very important business for us. is move away to do from the perception that all we do is emerging markets. we are good at credit and alternatives and real estate and all the other areas we are seeing investor interest.

as we are talking about the merger, let's talk about outflows you have experienced. you told us that in december. are --ns the out floors outflows are slowing or when they are coming to an end? antin: i think it is industry trend where we are like all other asset managers going through a tough time at the moment against this relentless rise in passive that we are seeing in the industry. if that stopped, i would be very happy. for think there is a place a passive, and i think there is a place for active. we have to manage the money well , and then clients will believe in us again. will talk to you in a moment again. martin: but, chief executive at

aberdeen standard investments is staying with us it will talk about the impact -- possible impact of brexit on the market. theresa may begins a reshuffle of ministers. this is bloomberg. ♪

♪ >> there are deals in europe to be addressed. the fact that it was an economic rebound and good momentum, we need to stay very focused on that and making sure those issues are not stopping the progress we are making.

mark: chief executive sergio ermotti speaking to us. theresa may is reshuffling. martintalking with gilbert. last week, a story suggested prime minister theresa may the brexit' that negotiation is bluffing about a special deal? will be ank there special deal for financial services? martin: i doubt it. they will negotiate in a tough way for financial services. france would love fund management to move to paris.

mark: it has been reported limit eufrench want to funds. what impact would that have? martin it would obviously be inconvenient. we need to move from fund managers to europe. the repercussions would be felt around the world, singapore, new york, everywhere. i think the u.s. fund managers would find it difficult to be exempt from delegation if we were not allowed to delegate asset management back to london. vonnie: what do you imagine what happened? it looks like it will not be london. think london will be ok in fund management. it is more difficult for banks to seturance companies up european subsidiaries, either in frankfurt or dublin. asset managers tended to run

businesses out of luxembourg. delegation of the management is the key risk for us. vonnie: the goal of the u.k. economy, how much does that impact your holdings and what do you imagine they will be? martin: it will be subdued. if you look at global birth of 3.8 or asset at 2.8, it will certainly be subdued than european growth. it will be difficult until we see what deal is reached on brexit. vonnie: are you holding off on u.k. investments? welln: the u.k. is doing in terms of this. i don't think so. you can always make the mistake of looking at what growth is and seeing if that relates into how

companies or markets generally do. i keep going back. you have to look at the individual companies. can we talk about the m word? how is it going. ? you are paying banks sen. lee: for share trading. banks for shares. martin: it is going well. there are one or two teething products. and our point of view asding, it has gone as well we could have hoped. mark: what are your principal worry areas? the unintended consequences from your standpoint? martin: we have not seen it yet.

i don't see it. i think the unintended consequences are more on the side.ide than the buy that is the issue. we have not seen the repercussions on the sell side. how much research will be stopped because certainly managers are taking a tough line with the bank's on the sell side on the buying of research. i would expect to see a contraction, especially in small companies and smaller markets. vonnie: what is the outlook for talent hiring given the amount of people among banks in london, and the headwind? martin: a lot of the analysts on the sell side would like to be

on the buy side. asset managers pride themselves on having very low turnover. it will be difficult. our whole focus is on retaining the talent we have rather than recruiting new talent. terms --do you see in vonnie: what you see in terms of the bonuses? martin: it will be tough on the sell side. it is a game changer for the banks. i think it will be tough. it is tough in the asset management world with the relentless rise of assets. vonnie: we will get into more individual holdings in the next segment it we will be back with martin gilbert, chief executive of aberdeen standard

investments. we will also be looking at m&a and what is in store for the year. mark: still ahead, the european close third basic resources and real estate and the stoxx 600 today. consumer goods to the downside. 10 minutes away from the end of the session. the first trading day of the new week. this is bloomberg. ♪ ♪

♪ mark: live from london, i'm mark barton. the close roughly eight minutes away. vonnie: and i'm vonnie quinn. we'll talk again with martin gilbert. stock.alk about disney what about the price, is it fair? know.: i don't i am not on the board. they accepted it and i assume the murdoch family thinks it is

a fair price. what it does show is consolidation in that industry. people say 1075 is not enough, might you want to negotiate another price? martin: sky is a small part of the overall deal. i am quite convinced they did not buy fox to get sky. to discuss time price, and that is a matter for shareholders. the time to look at that is once and if we get past the approval. what i would say -- i think the disney bid for fox has taken political heat out of the bid for sky. shouldo you think it have no problems? go that far.ldn't

the share price is not telling us quite that at the moment. say is ihat i would think there is less political heat because of the disney intervention. think disney should have to make a mandatory offer of the whole fox, sky deal falls apart? martin: that is a question for the regulators. again, what i would say is that i think there is a test for that and i am convinced they did not buy fox just to get sky. deal isrationale of the consolidation in that media sector. i think that is why the decideds

combining was a very good deal for fox. i am on the board of sky, not fox. mark: you did tell us that you are more interested for the company in integration than m&a. does that reflect on your ambitions in the u.s. and that you no longer want to grow as much in the u.s.? martin: we would love to be bigger in the u.s. the u.s. is half of the world's wealth. there is a lot of money here come and we are very underweight in the u.s. um is inour u.n the outside of the u.s.. what we would love to do is have more of our products available

here in the u.s. vonnie: martin:, chief executive at aberdeen standard investments staying with us again. next, we will discuss more risk for the company. 4 million assets of -- million dollars of assets. mark: as we head to the close, gains in france and germany. we are up for the fourth consecutive day since early november. check out the currency boards as well. we are seeing sterling and the euro is down against the dollar. 30 minutes away from the close. this is bloomberg. ♪

mark: live from london, this is the european close. stocks finishing up the monday session. w m go is the wonderful function.

london shares down. we have gains for the fourth day. last week we rose by 2.1%. best weekly gain since april. a synchronized upswing in shares. one of my favorite pieces on the bloomberg today is a piece entitled berlusconi could end up holding the aces after italy's election and talks about the prospect for italy for the governance of italy, following the election set to take place in may of this year. uncertainty has put equity and fixed income markets under pressure in recent months. this chart highlights that greeted the portugal 10 year yield, above italy's from 2000, from july last year but even before that. the white line is the italian yield. crossing at the end of last year. -- only greece's 10 year bond yield and italian stocks have trailed germany and

france over the last three months. italy's 10 year bond yield touched the highest levels october. on jay gray second, that is italy. for exchange holdings in china rose by 129 billion dollars in 4017, posting the first annual gain since 2014. tighter capital controls. by 20.7 increased billion to 3.1 4 trillion. the white line exceeding estimates. the big mover in european equities, a big tech company in the u.k., shares getting hammered down by 17%. biggest slump in seven years producing falling sales, .eporting revenue the low end of its forecast range. a sign investors are nervous about the prospects of the uk's biggest tech company three at micro focus wrapped up its $8.8 billion purchase of hpe software

assets, application, delivery management, analytics and enterprise security. it shares down by 17% today. vonnie: we're back with martin gilbert, chief executive at aberdeen standard investments. lucky to have him in our new york studio today. you said he wanted to be bigger in the united states. how'd you go about getting more market share here? martin: a mixture of two things. .istributed better that requires investment in the business here. luckily for us, the large combination, the merger with standard life, gives us that financial firepower to invest more in distribution. we will be more the organic story rather than acquisition or another big merger a sickly. vonnie: isn't -- basically. vonnie: isn't it all just about

the fees though? martin: the industry is under pressure. i think we will see consolidation in the industry. we want to prepare ourselves for that. but also, we would like to be bigger in the u.s. because this is the most sophisticated market in the world. if you can succeed here, you can succeed anywhere. vonnie: like the song goes, right? mark: as of next month i think lloyd's is able to move the money you manage for them, 100 billion pounds. any indication they will stay with you? martin: as we said in the , whenctus, when we issued we announced the merger. we are looking for ways to work with lloyd's. transaction.d the biggest independent outside

the u.s. we could do a better job for them and our clients globally. i still think that is the case. mark: what is your biggest worry? top three worries for 2018? martin: complacency. everyone is just too complacent about markets. they are record highs. government bonds, interest rates as you said earlier going up faster than people expect. geopolitical crisis with the price of oil perhaps going up. although that would be good for my house in aberdeen. i don't know whether that is a good thing or not. vonnie: it's always a good thing to spend some time in scotland. jeremy clinton wrote a great piece in the guardian i believe, about how he is expecting a melt up: some financial crisis down the road where we see stocks

halved in value. martin: we will see some event at some stage which will cause a fall in markets. let's hope it is not like the financial crisis which leads to . very long bear market a long period of slow growth. it would be nice if it was back in 1987, a crash and we get on with it again. i remember it vividly. is vonnie: --tion the other question is, when that happens, our central banks and particularly the central reserve , with a be equipped to deal with this? martin: i don't think they need to deal with it. i don't pick we are going to see the same systemic risk we saw last time. regulators have insured the

banks are so well they could withstand a shock. it would have to be a big shock for them to step in again. vonnie: fascinating conversation. martin gilbert is chief executive at what is now aberdeen standard investment. time to check in on the bloomberg first word news. courtney: the trump administration is sending special protections for immigrants from el salvador. the move will force nearly 200,000 people to leave the country or face deportation. salvadorans have been the largest beneficiaries of the temporary protective status in the u.s. activist tomrty sayer will put $30 million into this year's election but he will not be running himself. sayer says he wants to focus on ending republican control of the house of representatives. since 2016, sire has donated more than $100 million to political campaigns.

the angersident says that led to a week of antigovernment protests exposed the need for the freedoms he has pushed for. conservatives -- proof that rouhani's economic policies have failed to improve standards. he is expected to run and win. he has led the military overthrow of egypt's islamist president. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. vonnie: thank you for that. coming up, go pro crashing to record lows. the camera maker is making job cuts and exiting the drone business. where can the ceo go from here?

this is bloomberg. ♪

mark: live from london, i mark barton. vonnie: live in new york, i'm vonnie quinn. of theime for our stock hour. it shares of seagate technology rising as much as 16% after reports the company may own more than 4% of ripple, the company behind the third most valuable crypto currency. joining us with more is taylor riggs. why is seagate interested in ripple? taylor: seagate has not responded to requests for comment so this is a report and perhaps rumors but nonetheless, markets are moving on it. ripple market is moving. what was interesting is i think

we have an intraday chart that shows the percent change as of friday. we are ignoring saturday and sunday trading volume. you see a decline in the currency and they have recovered a bit of their losses. volatile. been what's interesting is analysts at susquehanna were saying this will not materially affect seagate's upside and you could sell on any of the strength. that was interesting. another thing you mentioned was it is the third biggest cripple currency right now. ripple and a theory him have been going -- ripple andaetherium going back and forth. it coin is number one and thenaetherium and ripple. vonnie: interesting to watch what seagate technologies is doing. this is not the first unusual investment it has made.

taylor: they have traditionally been in the hard drive, more of a slow growth area and they have been moving slowly, like with the toshiba purchase into higher growth areas. you have seen a little bit of this. one way the investor has been looking at this has been free cash flow. , this could be part of that push to boost that free cash flow growth. something investors are excited about. vonnie: another great stock of the hour. thank you. mark: let's get to the bloomberg is this flash. a look at business stories in the news right now. buy nordisk has offered to -- 3.1 billion is the price. the second offer the company has made. declined the board has

to engage in talks. carla can lend a stop to bloomberg news -- spoke to bloomberg news. >> we should have two entities separated on the market. considering this, -- doingave started work with the authority which is the main counterpart as far as the spinoff is concerned. mark: italy's government is concerned over the amount of control the french company vivendi has on telecom italia. saudi arab go is ready to name

goldman sachs in citigroup to manage what may be the largest sale share share set -- share sale ever. be named as global coordinators along with goldman and citi, remco has said the offering is on track to take waste this year. big cuts on the way at go pro. fourth-quarter revenue forecast missed estimates. the company will cut more than 200 jobs, reducing its workforce to fewer than 1000 people. it's also getting out of the drone business. that is your latest bloomberg business flash. vonnie: go pro is down today by more than 20%. we wanted to bring in cory johnson for more. slightly misleading to say 200 people cut because it sounds like a lot. out of 1200, 200 is not the whole company. cory: i'm not good at math, i will say 20%.

>> well done vonnie: -- well done. it is the sign it sends for the company. --y: when go pro went public chairs offered in the ipo filing , what we saw was excitement, not just because they were selling cameras on a stick. was, don't worry about our camera on a stick , there's going to be another cameras that from another provider and that would affect margins over the long term. they said don't worry about that. valuation, we a silicon valley company. you have to think of us for all of these cool videos. we will have a go pro station. all this great group pro video. videos i love to watch let alone shoot. i wish i could snowboard. if you can't see the face of the person, that is me. people said it was going

to be a content company. cory: that gave the stock a boost. the future was going to be media. the future as media did not turn out. forget the future as media, we are firing pete people. we will be a camera on a stick and drone company. inviting journalists up to the mountains to show these drone technologies. we are still a camera on a stick , that is not going so well. we had to cut prices in order to get anyone to buy this stuff and we are getting rid of the drone stuff. vonnie: to be clear, that is not a direct quote from the company. the problem you fix called go pro? things we seehe here, still this focus on videos they can shoot with these cameras.

one of the things they had to do was give retailers tens of millions of dollars back in rebates as they priced the thing to hide. they said they were still going to get revenues from this business but their profits, which are basically nonexistent except for one quarter briefly those shining weeks losses are going to continue because they have to subsidize the price of the cameras they were selling in the fourth quarter. they admitted to that with the release out today that they spent over $10 million of subsidizing the sales of these things allowing retailers to cut prices, promising rebates back there. the concern is that the gross margin problems they said were going to happen, they have been showing up in gross margins have been falling every quarter. the announcement that these gap margins are falling, it's a real

problem for this company. the ever present threat for go pro has been about competition and if competition shows up, you walk into any of the retailers that sell these cool cameras you will see next to it cheaper camera that can do something similar. if you walk into any great retailer who sells the stuff you can see the competition next to it. vonnie: it had to solve its one-hit wonder problem. what happens next? cory: who wants a business that is losing this much money? after right the ship to show any value. the cameras are a lot of fun. i was in northstar last week and i saw people with attachments on the tops of their helmets. i could not tell if it was a go pro or sony or something else. you see go pro's next all the competition and they are selling a lot. that is the risk for this company. this is the thing investors on some level have been concerned with her yet it's why shortages

peek from the stock at a certain point of the come into these big fourth quarter's. it should be the moment of profit and the company faced plants. vonnie: is this ultimately a nicholas woodman problem? cory: nick is a really nice guy. they have other management of the company. vonnie: the ceo is the person responsible. cory: he tells a really great story and he is into the astec as well -- he is enthusiastic as well. maybe an actual problem with the business. they have yet to show the answer , can they sell this thing out a profit over the long haul? they have not been able to do that. mark: quick question on bit coin. what's going on? demand from asia? what is the latest worry? cory: this is a speculative volatility story when you look at the day-to-day pricing on this thing. the story will be written with utility. it might be written with bit coin, with ripple xrt, but

fundamentally this is not about the fundamental value. about someone who's willing to pay more for it. volatility has been extreme. volatility has been more extreme after the futures conflict which one would have thought would have reduced about vol but it ht happened yet. vonnie: when the regulators get involved, surely it is not crypto currency anymore. the whole idea is that there is no regulation. they are free. cory: i think one of the appeals a bit coin is there are hard and fast rules. it's not just controlled by government are you there are hard and fast rules on how the thing works, controlled by community, but it should allow for faster transactions to happen. we had the ceo of ripple on and herg technology pointed out the fastest way to move currency from a new york bank to a london bank is to put it on a plane and fly it there. there is no efficient electronic

means of sending money like there is sending e-mail or data and that has to change and looks like that though currency is a solution to that problem until the problem is solved in another way. cory johnson, always love it when you join. mark: coming up, battle of the charge. -- of the charts. this is bloomberg. ♪

mark: battle of the charts where we look at some of the most compelling charts of the day. what they mean for investors. q can access these on the bloomberg by running the feature at the bottom of your screen.

gina is smiling. >> i wanted to talk about consumer confidence today. it's going to be important going into 2018 for how the consumer spending picture shapes up. i broken consumer confidence down by demographic. we got a divide when it comes to $100,000 plus earners versus the middle class and that has been trending over time. youe the trouble election, have seen this divide between democrats and republicans, the purple line here, take off. economic competence divide is taking off crazily and i think that's an important thing to watch especially after the passage of the tax plan and things get going on capitol hill this year, that is a trend to watch. vonnie: can i jump in? i know this is gina's turn -- --s is jeaanna's turn

jeanna: i did this one with consumer data. it doesn't show you republicans are feeling confident and millennials are more confident than boomers. vonnie: i'm sorry, i had to jump in. conflictn eye on the -- mark: go for it. .onnie: 4875 on the bloomberg it's interesting because you think commodities have been rising. grainslook at the data, have not been doing so well. they've been doing poorly as the other commodities, gold is up 1320 now. pacer metals have been flying high.

index is down. we will have to watch that. farmers around the world will be feeling the pain. that number is 4875. i feel like i cheated here. mark: you showed such love for jeanna that i am with you. jeanna gets the victory but two fascinating charge. on why certainch companies are more likely to be investors. activist it's something to on bloomberg television. ♪

administration is ending special protections for immigrants from el salvador. officials say the move will force nearly 200,000 people to leave the country or face deportation.

salvadorans -- the program provides humanitarian relief for foreigners whose countries are hit with natural disasters or other strife. $30 millionll put into this year's election. he tells the washington post he wants to focus on ending republican control of the house of representatives. since 2016, he is donated more than $100 million to put a campaign. businesses and government workers camp reviews -- refused to provide services to gain entrance into people on religious grounds. a panel found the law challenges failed to show it would harm the rgb t community. the appellate judges did not rule on the laws substance. spentntucky clerk who five days in jail for refusing to issue marriage licenses to same-s