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tv   Bloomberg Markets European Open  Bloomberg  January 17, 2018 2:30am-4:00am EST

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guy: good morning. you are watching "bloomberg markets." matt miller is over in berlin. matt, cash trade now less than 30 minutes away. guy: so, hard candy. nestle sells the u.s. confectionery unit to italy. is the sugar high over for investors? red, pulling back from a record high and with the dollars that to rise, it is
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trading higher now as the greenback finally found a flaw. a conference call. merger,s announced a but will cost-cutting be enough to justify this deal? than half anless hour away from the european open. take a look at where futures are trading. as you have been talking about this morning, as well as on n stocksk," asian moved lower overnight. a quick look at treasuries right 2.557%. still not seeing a huge selloff in european debt as yields are down. gmm,let's talk about the thers acting as a drag on
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strictly an story. central bank decision out of canada later today. the canadian market down 1.5% yesterday. russia has opened up this morning by about 0.8%. i will give you a heads up on what is happening there. india is looking a little more positive. asia is down, but not that down. there it is. there is the dollar and we will talk to mark cudmore that what is going on with the greenback. let's roll this off and show you the commodities space. there's the sugar high coming to an end, down by .4%. coppermetals space, 1.47%. down by on it will be interesting to see ii.these prices will be
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situation was tenuous. he was speaking at vancouver where top diplomats from 20 nations gathered to explore new ways to enforce sanctions and choke up south korea's economy. koreans know our channels are open and they know where to find us. it is a necessary indicator of whether the regime is truly a diplomaticsue solution to the security threat it has created. francine: gop leaders in the house are testing whether the republicans would provide money
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publishersren's program. paul ryan tried to push the plan through to finance operations through february 16 without support from democrats. donald trump's doctor says the commander-in-chief is fit for duty and should remain so. he says that functions screening for signs of dementia were found to be normal and the president takes cholesterol medication, aspirin, multivitamins, and a hair loss drug. voweds banking regulator to take action against those who work through fraudulent capital injections. government crackdown
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is poised to continue. regulatory commission says such operations have become major obstacles to the nation's efforts to safeguard banking stability. heathrow airport has put forward proposals for a sloping runway, saying the landing strip could be built to three different lengths. a tenley consultation aimed at reducing the expense on the 16 billion pound project. where it could be funded without a significant hike in user charges. global news 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries around the world. this is bloomberg. dollar indexrg's has rebounded after coming 10hin a hair's width of its year low.
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the question now is, has the greenback bottomed out? mark, let me ask first of all, the significance of almost hitting a three year low. basically hitting a three-year low yesterday. is that some sort of technical indicator. is it important in the bigger picture? well, it will be seen as very important. the contextmind, in we discussed monday, i was looking for the dollar to arrive sometime this week. when it seemed we got that capitulation number, it was very funny watching the screen, the dollar did a set in lake ban against the other g1 currencies0 currency. if we do get that today, people
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will get excited. it is something to be aware of going forward. guy: how long could this last, mark? mark: i think this could last for a couple of weeks. the factalked about that the fundamentals are improving and we are seeing yields rise. thge native yields have been there in the u.s. for most of last year and no gong, finally. the u.s. is actually growing faster than most of the dm peers this year. it was very much the middle of the pack. i think given that the sentiment is so negative, summary people have piled into the short dollar trade, there is the chance for the same banks in the next few weeks. i believe we could have a multi-ownedbank.
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matt: what does the rising dollar mean for other assets, mark? how is this affecting emerging-market debt and inflation figures? mark: i think it is a negative for emerging markets and commodities, and risk assets. we are seeing the dollar rise. are seeing time, we yields higher and equities lower. that means financial assets will get hit. i think this could be negative in the short-term for equities. i think we could see a bit of a correction. the em currencies will probably be affected in the short-term. guy: how worried are you about the ran we were talking aboutd? positioning right now and what
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sentiment looks like going for. this story looks like a classic formula. >> we discussed back in december, at the time, i argued i think could argue the rent is particularly vulnerable, but at the forefront of the broader effects
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connection. bitcoin that thing back from a massive drop yesterday. do you think that is the end of .his capitulation, ironically, it might turn out the one thing everybody says that is needed, stability, it might be what kills it. it loses all appeal and prospective tools. it is not going anywhere because it is entirely useless and .xpensive, the only value if we take that away, bitcoin could become worthless. i think it is too early to write it off yet. the diff yesterday was
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a sign that one of the long-term early whales and bitcoin has realized the end starting to come. you can follow live market .sights on the we will top let that. -- we will talk about that. this is bloomberg. ♪
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guy: we are, what, 16 minutes away from the start of trading in europe. europe called lower as the get go this morning. here's juliette saly. informer has announced a proposed combination with ubm. ubm holders would receive 163 cash for each of their shares. l has forecast first-quarter sales trailing analyst estimates. semiconductorst nestle about 2.2 billion
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has agreed to sell the u.s. desert unit. unit, whichthe includes the butterfinger and baby ruth brand, is the first to make the divestment. healthier categories is ferrero's next move. willring an offer that value the commercial real estate company at 2.7 million pounds. the group is lining up a firm offer of about 300 pence a share, but no more than that. everything is for brookfield and iwg declined to comment. ford, the more than century-old
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company that was the first to make cars for the masses will shrink its passenger car lineup and shrink too low volume models. the president, delivering a statement at the deutsche bank conference. wall street had been expecting a drop from 2017, but the low end is worse than analysts were anticipating. we are minutes away from the open. let's get your stocks to watch. joining us from our equities team, casper. let's talk about m&a. it is not monday, but what do you expect today as far as dealnews is concerned? >> we have some big news. the nestle, ferrero deal.
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chocolate is not selling as well anymore. onment organizers inform ubm, which is something that has been talked about as a potential merger for a long time. surprising the decided to focus geographically. we will see how it goes. has to go up. were called higher. why? kasper: if you look at the fourth quarter earnings, the disappointment on the headline basis was the first quarter, but the fourth quarter was absolutely, massively stronger with boosts in sales and earnings. so, combine those quarters, look
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very good. there were insecurities regarding the vulnerabilities. perhaps coming off a very strong year there might be some concerns that the semiconductor growth has already run its course. guy: it has had quite a run. >> it has definitely had quite a run. but it seems there is still some growth to go on. matt: one of the best performers this year -- well, the car makers have been great performers this year. cyclical been beating stocks with a stick. supporting that, european car sales numbers. >> last year the highest car sales and 10 years. banks andoosted and anything exposed
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to european growth. in seems after a tough time we are now gathering momentum and there will be more growth. i have been doing well, and seem to be continuing to do well for a while now. guy: it is interesting to see how some of the card traders work. down intting knocked relation to this very high number. let's leave it there and get a sense of where these markets are going. let me punch in my wei to get an idea of the fair value. the-year-old stoxx 50 called down by 0.4%. if you want to follow the stocks, first on your bloomberg.
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that is the market news ahead of the market open. matt: let's focus on german politics. last week angela merkel and her social democrats reach an euro todriving the the highest level in three years. my next guest is not so sure about the conclusion they reached and the likelihood they will succeed. a report was published this morning on the reform of the euro area. theme ask first above agreement, after the preliminary voters are kick.
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i don't think it is a great deal allow for is not growth spending. there are weaknesses within the .greement on climate policy on europeanig policies. it is not great. we see here the need for a tax cut because of brexit c reeps. this is something angela merkel's wisemen have talked about. the middle class is getting hit with a higher and higher tax rate. why doesn't this agreement address that? it is something everybody has agreed is a problem. is a strong focus on more spending and social democrats don't seem to think this is as important as most other people and they are
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focusing on the increasing social spending subsidies. -- but it is not just the income tax. we have the corporate tax. french tax announced reform and the u.k. is going down to 17% on tax. there is nothing in the coalition agreement. if we could just get a continuation of roughly the same thing in terms of government, germany will continue to power ahead. isn't that the read the situation right now? i think that is true in the short-term. but it might not be true in a longer-term. we are facing great challenges
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in the automotive industry. ishink competitiveness something where we have a medium-term issue and that is why it affects the bonds. and in the middle class, the re are low disposable incomes. matt: i read earlier this morning on february 5 the berlin wall will have been down longer than it was up. are stillermans paying the so-called solidarity the reunification of eastern and western germany. as a gotten any closer to reducing that? essentially, the is solidarity charge has become something comparable with the constitution and it has become a
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normal tax with the general government. that is why people think it is time to get rid of it. when you think about europe and what the plan will mean for europe that the two .arties what kind of details do we need to see? you will be talking about this later on? what does germany need to deliver if it wants europe to take a step forward. >> germany together with its partners needs to deliver two .hing we are trying to make the eurozone more resilient to shocks. we need to combine these two things.
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in germany, there is a lot of complacency about that. the government thinks it has to do nothing because the economy is growing all right. but that is not right. a great message to end on, but i wanted to add one more. do we move closer to the banking in? it will only tackle it if it is combined with structural changes towards more market discipline. it is very much about depositing health insurance. so, many are afraid of that and hadthey are lacking better payment for private investigators. thank you for your time this fuest., clemens
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january 24th.u on tom: watch burberry, asml;, watch the car stocks. this is bloomberg. ♪
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guy: one minute to go until the start of trading in europe. we are having a look at the czech republic. until this was not expected, but a possibility. the euro-dollar is trading south. we arelar has a bid, watching them. oil is down, but not by much. the contract for brent. the nikkei closed down by 0.3%. asia did not have a good morning or afternoon. that was the industrial average. europe is definitely called down
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this morning, down by 0.5%. we are watching the car stopped as well, but we are called negative here at the get go of trade. but see 100 closing. just beginning to soften of a little bit. as i'm curious to see, the miners were a drag on the aussi market. the ibex is down a little bit harder, do weeeeeeeeeeeeeeeeeeeeeeeeeeeeeee eeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee eeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee eeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee eeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee eeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee eeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee eeeeeeeeeeeeee -- that is what is happening on the imap this morning. wonder what that will
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affect this morning. that is trading higher. we have a sliver of strong green here. generally, we are down by 0.2%. and europere weaker this morning. health care is trading softer and financials are a little more mixed. industrials look negative as well. keep an eye on burberry this morning. matt, what is going on? matt: if you look at the individual stocks doing the best and the worst, as far as percentage changes, we see asml at the top. kasper earlier this .5% this morning. the tech stocks are doing better. glaxo smith-
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klein, one of the big movers at the top. take a look at the big losers that we see. inot more losers that are single or double percentage terms down. we were talking about the auto industry. there are a couple of others down there. telecom sector is falling apart, as well as the at chrysler. besthas been one of the performing stocks of the entire year. chrysler, down this morning uput 2.5%, but it had been more than 30% the first 10 trading days of the year. let me pull up the move screen. i like the screen better than screen because it shows
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me the movers as far as index points, reductions and addition and it shows me how many stocks are up and down. right now we have 150 stocks up, and 403 losers. the markethows you is showing on the downside. novartis is down. novo nordisk is down. these companies are taking away index points, as are the oil asducers total and shell, are bhp billiton and the miners. again, you see on the gaining side of the ledger asml still adding the most index points to the stoxx 600. you do see glaxosmithkline there
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as well. red today,ies turned pulling back from the record high. the dollar is that to rise for the first time in six days. talk to the head of the u.k. rate strategy at ubs. equities have been on a tear. we are in a situation where we are trying to figure out what the rate story will look like for the rest of the year. you are not an equity guy, but i'm curious as to what your take is on the broader market. seems to havement shifted away from the bond story. equities have been on a tear. what is that telling you? >> well, it is reflecting a clear pickup in sentiment generally, where the economy is the inflation
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expectations, too, to a degree. there is a compelling underlying story here, which has been drawn. that said, when we look at the bond market moves, we do not think this is the beginning of a material rise in yields. the pace at which things have evolved over the last couple .onths >> it is something we have been waiting for a long time. so, arguably, markets have been tentative about the speed at which they have accepted that things are getting onto a f irmer footing. agobond markets six months
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-- it was a little late to make them realize that things would be different next time. in the u.s. we are seeing material monetary tightening going on. as those moves continue and conditions get tighter, the pace at which things improve, it is for you as well. matt: i just wanted to point out and here in a sense, we will deja vu.ttle bit like this was that to 1998. you can see we are at an all-time record high. and just continues to touch new highs here, even as the rest of asian stocks and european stocks
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indeed were down. the hang seng index there, hitting a record high. let me ask you quickly for a comment on this, john. does it have anything to do with the currency trade? is thisugh there widespread sentiment going on, moving into different markets. the recovery in the u.s. has been gon ongoing for a long time now. and the fed is normalizing policy. the move is starting to spread more widely. as we were saying, that is not how central banks are responding. you.he pace is likely to
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stocks are more long-term, bearish what is happening with the dollar. this means if we start to see the dollar bounds, how much of what we are seeing in metals market and precious metals .arket it is prefaced on this idea that we have this declining dollar. if the dollar turns around, does it shake our world, and to what extent? >> and certainly good. what matters is our philosophy is are pricing in a fist case scenario. it will not happen without any sort of slips along the way. we still think overtime the
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dollar has more downside, , butinly against the euro we have come a long way during a short space of time and it might be time for the markets to take a breather. matt: john, i want to use a chart i have been pulling up lately. what it shows are the stock index valuations. the s&p 500, valued at 24 times the earnings. times for at 24 earnings. the least -- the lowest andation of the regionals what everyone gives telling us is this has to do with the fact that there are not any tech stocks in the eu. i'd buy that. but i wonder how much of it has to do with rates. if i am getting 2.5% in the u
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.s., wouldn't that be a better job away from debt? her the u.s. recovery is much more established. expectations around ecb policy have changed quite materially. the eurozone recovery has become thosetrong and we think yields will be moving higher over the next year or two. the u.s. is just a lot further with manyord potential pitfalls and stumbling blocks. there are reasons for all of the valuations, but yes, overtime, things are becoming more
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balanced. that partly explains the rose uro strengththe e against the dollar. that will take the euro-dollar to 1.30 by next year. guy: we will see if that throws the ecb down. john, stick around. to tell bunch of stocks you about. the first one, burberry. can see the stock is , and it was 5%4% on the back of the numbers delivered this morning. the markets are still waiting for accretive direction. we've also but a big move to the upside in the m&a story we're watching closely. a stock we are watching and we are getting quite a decent gap higher on that. that stock is moving quite
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sharply. asmlhen there is the story this morning. initially trading up by 15%. what is the industrial logic around this, other than cost-cutting? the other one i want to show you they make the equipment that makes the chips. the market likes what it sees. anday, we will come back continue to talk about the equity market this morning. this is bloomberg. ♪
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>> it has softened. project.y have one we sold out more than 50%. we are looking at the future long-term projects. sinful is an interesting market. my view is that you enter the market when it is soft. brexit has not turned you off? >> no, it is an opportunity.
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that was the billion or chairman of the dubai-based real estate. welcome back to the european open. minutes into the trading day, looking at stocks that are down across the board. let's go to nejra cehic. asml touching a record high, now up 3.7%. it did forecast first-quarter sales trailing analyst estimates. focusingt seems to be on the strength of the fourth quarter and the fact that asml, which is a semiconductor manufacturing equipment. that is an of the best performers on the stoxx 600. on the downside, i looking at burberry, down 4.7% with holiday sales falling short of estimates
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and sales in the u.k. falling after a strong quarter the year earlier. finally, i am looking at in former -- this has to do with m&a. in discussion to purchase the rival, ubm. i at the moment, the offer is at bm's% premium to u price. stocke do have the trading down 4.7% at the moment. the gap is lower. let's focus on some of the elements, what we have coming out of burberry. this is one comment from one of the analysts this morning. he wrote this note from rbc.
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hugeshould not come as a surprise, given the exceptionally difficult u.k. consumer. the consumer feels they are on the back burner right now. a range ofeeing weakness in different areas, clearly retailers. the overall picture for us consumption is slowing down. why? in very real circumstances in terms of low savings, high debt and if you look at confidence indicators, they did recover initially after the sharp fall eight months ago, but they are now back where they that pool is when you see numbers like this,
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i am the retail expert, but it is all must a surprise that long we think it is going to get worse before it gets better. matt: is any possibility we have a new vote, or no brexit in a good way? it seems the question is getting asked more and more. though the answer give coming out "no," more people are thinking about it. >> as long as the current u.k. government remains in place. legally whatever comes beyond the u.k. price again with the trigger of article 50 last march. clearly the political situation is fragile.
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that's well known. the government does not have it's a majority and relies on the dup for a small effective emergency and the economy we think is clearly slowing. if it flows more dramatically and that spills over into her , then you cannot rule out .ltogether they are talking about the banks and the two rate hikes over the next three years. consumer? back to the i have already had one -- and you wonder whether or not the bank of england will have to slightly begin to move back on
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the approach at the moment. >> the data around the first quarter this year is very important. i mentioned the labor market already and there were warnings, thecating signs over previous month. the pace of job creation is slowing down. wage inflation has been waiting .o see for a long time if that continues to be the picture and the brexit negotiations are as problematic as you think they will be, then the case for a rate hike for us is not there. >> i think it would take a lot to get them to reverse the call. it would certainly take a material one. just everyone percent this year, that in itself would not be at the u.k. we
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were hearing about drivers of the global economy doing so well. sterling is very competitive after the big fall that ended a year or so ago. the u.k. is enjoying some of this global recovery. domestically, things are very vulnerable. bad news on the brexit fund. you said you wanted the pound index, which is on the bloomberg. the case, we are still down in the doldrums here. this chart was back through 2005. in the doldrums.
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.weis good to have some time could see a tail risk after the weakness in sterling. inflation is also above target and real wages are negative. it's a mixed story. but there has been a lot of focus. he story is more the weak dollar story. we are not looking at any sort of recovery in sterling, nor have we seen a material .epricing i think that tells you this hiking cycle, if you could call it that u.k., >> complete conviction. that explains why the trade
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weighted sterling deals are not responding to this change by the mpc. uatt: john wraith, thank yo very much. he's going to stay with us and i will quickly check on markets .ere portugal is only down 0.1%. we are looking at 0.25% drop in spain and a 30% drop in frankfurt. the republic of ireland is down 0.5%. so, real drops in stocks across the country and in the u.k. that's a loook at your world map
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. let's get back and talk about what is going on more broadly and get a sense of the bigger picture. -- we couldand is see the government getting shut down by the end of this week. how do you play that, just from a tangent will point of view. but the instinct is, you buy treasuries and you buy the dollar. >> we have seen the very front end of the market and previous . we haven't seen that at this time and there is the assumption that thankfully pushed out as his political rambling goes on. more generally, and this goes back to when we saw a big rise in yields, we think they go a little higher still over the coming period of time. you think the fed will raise .ates three times this year
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it is something of a slower rate. any thoughts on the potential shutdown of the government, that reminds us there are a lot of political instability is out there, not just in the u.s., but the u.k. and germany. so, we need to keep all of this in mind and perhaps expect a slower pace of increasing yields in the future. very john wraith, thanks much. i appreciate your time. >> thank you. matt: up next, will draghi deliver in 2019? we discuss the expectations of the ecb, maybe some from the the bundesbank.
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is bloomberg. ♪
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♪ we are 30 minutes into the trading day. let's get your top headlines. hard candy, nestle, the world's biggest food company sells its u.s. confectionery unit to ferrero of italy. is the sugar high over for investors? shares in europe, a down day in asia, the euro-dollar feels the pressure of german coalition talks. catwalk crunch, burberry shares saless holiday shares fall short of estimates. can the ceo keep investors on board with his turnaround plan? welcome to the european open. i am matt miller in berlin alongside guy johnson at
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bloomberg's new headquarters in london. guy: i think the most interesting stories this morning are on individual names. is fascinating. let's talk about how that is rippling through the sector story. thegrr screen is here on bloomberg. insurers are doing well, utilities, as well. that bond proxy story has been coming into vogue. technology is doing well. up .2%. the, once we dug into fourth quarter detail, we investment company not doing badly. real estate is better bid. basic resources have bounced back. they didn't have a good overnight session in australia. media is interesting. you have the you bm story, trading on opposite ends of the media sector. one up sharply, one down
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sharply. he will also have other big names in that are trading down. names like pearson coming under pressure. that is why that sector is not doing well, down by around 1%. let's get the first word news update. sebastian: the u.s. secretary of state has offered an assessment about the possibility with a -- of war with north korea. rex tillerson said the country's nuclear program meant the situation was very tenuous. he was speaking in vancouver where top diplomats from 20 nations gathered to explore new ways to enforce sanctions and choke off north korea's economy. >> north koreans know our channels are open and know where to find us. but a sustained cessation of north korea's threatening as aior is necessary indicator of whether the regime is truly ready to pursue a personal -- peaceful resolution to the security threat that it has created. sebastian: meanwhile, gop leaders in the house are testing
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whether republicans will support the stopgap funding measure to keep the government open. it would also delay obamacare factors and provide money for children's health care programs. paul ryan and his team are trying to push through a plan to finance government operations through february 16 without having to count on support from democrats and the chamber. donald trump's doctor says the commander-in-chief is fit for duty and should remain so throughout his term. he examined him last week amid criticisms that the 71-year-old may be unfit for office. he says the cognitive function screening designed for dementia or outsiders was normal and the president takes aspirin, a multivitamin and a hair loss drug, as well as being borderline obese. proposals for a sloping runway and says the landing strip could be built to three district links as it seeks to cut two point 5 billion pounds from the cost of expansion plan. plans onst hub also
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new terminals and road links. that is part of the -- and reducing the expense of the 16 billion pound project to a level it can be funded without a significant hiking user charges. global news 24 hours a day, powered by more than 2700 journalists and analysts in more .han 120 countries this is bloomberg. president is bank says -- the bundesbank president in 2019erest rates rise is real estate. in an interview, he indicated forecasts are in line with the forward guidance of the central bank and an end to qe this year would be appropriate. joining us now, the chief economist at aviva. this seems to be the prevailing opinion of individual members who have given talks, that we are going to see an end to quantitative easing this year. you believe mario draghi can pull that off? >> i think that is what he
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wants. he wants to end it in december, not september. inflation is slightly picking up and the ecb is running out of bonds it can purchase. things really the main draghi has in his mind. matt: and an increase in rates the following year, is that how quickly it could go? carsten: a year between the end of qe and a first rate hike makes sense. somewhere in 2019 makes sense. i think it is mainstream. what happens if the euro starts going up too fast. it has seen a rapid depreciation. will the ecb have to change if the rate of change stays as it is? carsten: they probably sound .ore dovish than the meeting if you look at the last couple of days, markets got a bit
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carried away with the idea the ecb could stop qe in september. comments have been made. draghi will have to put this into perspective and say there will not be a sudden and the qe program. this means there will be a change beyond september and he will have to sound more dovish than hawkish to get expectations back in line. matt: although we love to talk about the ecb with you, it is not as interesting as the predicament that the spd finds itself in. everyone in the market found -- thought this was a sure thing, we saw the euro jumped to the highest level since 2014. last week after the agreement. berlinare seeing even spd almost voting themselves out of a job here. is it going to happen? are the spd voters going to
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allow martin schultz to go back into talks with merkel? carsten: the delegates will. don't forget then we will have the grassroots, all party members, who will have to decide on a possible coalition agreement and this will be a bigger hurdle than the congress on sunday. here, they will vote. i think they can continue and then pull the plug after the coalition talks. guy: what happens if we don't get a deal? walk me through the implications of a no deal and fresh elections and an ending of the merkel era. i wouldn't be too sure about the last thing, because i think it would be an end of martin schulz and a couple of leading figures in the spd, if we get a no deal. then we go to snap elections. i wonder if there is another
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candidate alternative to merkel. i would rather see us go to the next elections with merkel. we would probably get the same result as september, but would then allow the minority government. german citizens are not up to accept the minority government yet. septemberutcome in would probably allow for such a minority government. either with the liberals or the greens. matt: when we get gabrielle back? he is all of a sudden the most loved spd politician. carsten: if you want to be famous and popular, you have to be minister of foreign affairs. this is what he did and his opinion polls went through the roof. if this was a no on sunday, it would mean access for him, for schulz, a completely new generation in the spd. guy: philip lane, a hugely
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respected economist, joining the possible vicend, president, possible chief economist in waiting, is warning that a very hard brexit could have significant financial implications for the eurozone as a result of the wholesale funding story coming out of london. ground your ear to the telling you about how worried the ecb is about that potential funding story? carsten: on the funding story, they are worried. they are concerned. the ecb is not so concerned about the economic impact from brexit, but this means there would have to be a good transition period. if there was an abrupt exit, there would be a funding issue. in the experience of the ecb the last decade shows the ecb has the tools in place to react to these shortcomings in
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funding, to any transitional problems, they would probably allow for emergency funding. this is something that is on top of the ecb's mind when it comes to brexit. guy: lane talked about it being a genuine shock. carsten brzeski, ing-diba chief economist. he will be joining us on dab digital. we will carry the conversation onthat we started television. i want to talk about stocks we are watching in europe. the first one is burberry. .ower this morning it is continuing to selloff after what we saw in the numbers. beginning to just have a few concerns about the the ceo is putting into place at burberry. the next is what is happening with asml, on the move to the
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upside. the fourth quarter looking strong for the tech sector. stock is trading higher. interesting stuff around ebm, the possible merger. trading to the upside. in the media sector, pearson looking fairly weak. there are interesting stock stories out there this morning. matt: absolutely, and the most interesting -- i think some of the most interesting companies are those like in new york, we had we works, which has a sharing economy model for people who want those spaces. here we have iwg, a similar business model. they have office space they allow people to share, so you don't have to rent your entire floor. gotten an offer or are going to get an offer from brookfield asset management and
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on x corp. a share.300 pence watch that stock, watch this space for a possible deal. up about 8%ght now, over the last 12 months. since done quite well december. a lot of interesting stock stories, including those media stocks, including a note from that the company is overvalued compared to others in the space. compared to the expectations before the third quarter profit warning. we will cover these stocks for you. coming up, leading the charge. china was the top investor in clean energy in 2017. we will take a look at the future of energy. it is an incredibly broad topic that we will squeeze down into
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four minutes. that conversation next. this is bloomberg. ♪
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♪ we are 45 minutes into the trading session in europe. broadly, not a great start for the european markets, but there are fascinating stories in terms of the individual stock names. burberry is want to watch out for. moving lower.
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and you have the deal done with ferrero and nestle in the chocolate sector. a lot of individual stories, but more broadly, europe is lagging into this wednesday. matt: all right. i was going to say, i am limping this morning, as well. today,pretty strong though. let's talk about clean in her g investment, near record levels in 2017, topping 333 billion dollars according to a new report compiled by bloomberg new energy finance. 132a led the charge with billion dollars of investment, more than double the next largest investor, the u.s. europe trailed behind, pumping year than last last it did in 2016. joining us, angus macron. talkhas been -- let's
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about what has been driving china's investment in clean energy? is it just the scale of the country and the fact that they have this command economy? >> yes, i think so. there is also an industrial policy aspect. they want to dominate these new industries in energy and one way to do it is provide the scale at home for domestic companies to sail into that market and they cheap export abroad. that is an important aspect, but they are a growing economy and electricity and they have pollution problems. they wanted downscale on coal and want to do their bit for combating climate change. what is's talk about going on and what we can expect in 2018. i have a chart here, which is the global battery etf, broader head throughout last year. you look at the expectations
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this year and they are still pretty high about what will be happening in the clean energy space. opponents of the etf is metals. metals prices are going up, yet the cost of batteries are coming down. how do those two things sit together? angus: the metals are only one part of the battery pack, but there is a bit of pressure coming through from metal prices. we don't think it is a long-term problem. there are plenty of metal reserves out there that can be exploited and there is no reason why it shouldn't be over the next five to 10 years as the market expands for stationary energy storage, but in the short term, the increase in metal prices probably limit the long-term fall we are seeing them that early -- better leave -- battery prices. we do expect them to fall a bit,
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but that will be against rising metal prices. matt: how our solar and wind comparing to the coal and gas in terms of new capacity, new generating capacity added? angus: this is an interesting story. the four biggest technologies in terms of net capacity added worldwide in 2017, solar, wind, coal and gas. gigawatts of gold -- ower was added. : and gas together came to about 80 and wind, 56. one of the big stories about 2017 was that solar additions amounted to more than coal and gas combined for the first time. guy: we will he get there. angus, thank you for coming to see us. the 10put together
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predictions for 2018, worth a good read on your bloomberg. fascinating stuff about what we can expect going forward. angus mccrone, the chief editor of bloomberg new energy. one thing we didn't talk about was bitcoin. a big energy consumer. i know we were talking about this a few weeks back. matt: i was actually wondering -- i recently heard a statistic that said bitcoin mining takes as much energy as it takes to run 159 countries. i assume those were the smallest 159, but it would be interesting if all the wind power in the world -- does that create enough energy to power the bitcoin mines? amazing, although we will see bitcoin mining take up less power as the -- price drops further. guy: we will keep an eye on that one. it is an interesting aside in the energy story that angus and
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the team are putting together. the weather looks pretty grim in berlin. it is lovely in weather. we will talk about the mid-cap movers. office space, eighth aim in both big cities. this is bloomberg. ♪
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♪ welcome back to the european open on bloomberg markets. you are looking at a live shot of the brandenburg rate with the snow dropping.
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it wasn't forecast, so i rode a motorcycle to work today. it looks like it will be a lot of fun for the kids, at least, tonight with snowfall in berlin. let's get your mid-cap movers with nejra cehic. news thisot of m&a morning. let's start with the events management space. jumping the most since 2009, hitting its high since 20 -- 2001 after reviving merger talks with its rival, in talks to buy with that share and cash offer. iwg moving up more than 4.5% bidr onex is planning a according to people familiar. i wg is a commercial real estate company, hitting its high since october of last year. taking, skanska in therally related --
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new year. it talked about comprehensive restructuring to improve profitability and said it had no direct impact from the carillion bankruptcy. nevertheless, shares down almost 6%. to pick it upg there. thank you very much. bitcoin has studied after as 20 6%as much yesterday. proposals for tough new regulations have weighed on cryptocurrencies. the real threat to supremacy may not be from governments. a year ago, it coin made up 90% of the market, now it is 30%. as speculators turn away from the breakout star, will rivals erode bitcoin's dominance. joining us is eric lam. other cryptocurrencies are just fans are to transact, cheaper to transact and more anonymous, right? >> that has been the case with bitcoin from the beginning. was was it
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it was the first cryptocurrency people were looking to invest in. that was the head start they got. over the past year, when we talked about the advantages or introduction of new cryptocurrency rivals, we talked about differentiating from bitcoin. they had value added differentiators to distinguish themselves from bitcoin. the market share from bitcoin has dropped because investors have migrated to other cryptocurrencies. thank you very much. eric lam out of hong kong on the latest surrounding the cryptocurrency story. i will bring you the stock of the hour. i will keep an eye on burberry this morning. the stock is certainly checking out today on the downside. the price really falling quite sharply, but what i want to highlight is the volume. look at the huge volume on this gd that burberry is trading on
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the bloomberg. 751% at this point. matt and i are going to bloomberg radio. surveillance is up next. this is bloomberg. ♪ this is bloomberg. ♪
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on the hill.uble stocks retreat from record highs. the immigration fight demons. dollar rebound. the buck bounces. as the u.s. currency found a floor? and, burberry holiday sales missed estimates. will the company find a new creative director to turn things around? ♪ francine: good morning and welcome to "bloomberg surveillance." these are your markets. a lot of the asian stocks are down. european stocks following them lower.


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