This story. We will bring you news on that story. Grounded as well. Monarch Airlines Dancing all flights. Canceling all flights. Help tough will it be for the lowcost carriers . We are monitoring events in las vegas. There are reports coming in all the time. It appears to have stopped within the last hour. We will continue to bring you up to speed with what is happening. Series of events taking place in the city. It will find out what is what the latest Police Situation is. We will update you throughout the program on that. The other thing to notice, 20 minutes to go until at the moment, the failed value the fair value putting us to a rare start. Cashax is going to outpacing outpacing some of its peers. Lets talk about what else we can see out there in the world. We have had some strong tiny stayed overnight. Some strong chinese data overnight. We are happening guess we are watching what is happening in catalonia as well. Lets go to our Bloomberg Business flash update. We start with this developer story that authorities have shut down part of the Las Vegas Strip after receiving reports of an active shooter. The report said the shooting happening happened at the mandalay bay resort and casino. Several teams were sent to the hotel and officers reported being pinned down by gunfire. U. S. President donald trump has used twitter to tell us secretary state that he is wasting his time in seeking negotiations with north korea. The remarks came a day after Rex Tillerson acknowledged that he is committed getting directly with the rogue nation. The move highlights differences between the u. S. Administration on how to get nuclear guess how to get kim jong un to hold his nuclear program. Ukip Prime Minister theresa may heads into her conservative party annual gathering filling questions over why she hasnt fired boris johnson. Johnson has challenged her strategy on leading the European Union twice and the past two weeks at critical moments. Yesterday, make it only laugh and dodge. Cabineti have is a united in the mission of this government come andrew and that is what you will see this week. United in a Cabinet Mission to build a country that works for everyone. Agreed on the approach we take in florence. Britain is likely to forge his first postbrexit deals. Event on then sidelines of the conservative party conference, liam fox said britain is working to adopt 43 trade agreements that it is currently a party to as a member of the you. Chinas official factory gates has risen to a fiveyear high, indicating the efforts to clean up the Financial Sector and the environment. The manufacturing pmi the expectations as a rose to 52. 4 in september, up from 51. 7 a month earlier. In japan, confidence among big manufacturers has risen to the highest level in a decade. The boj survey came in at 22 in the third quarter, up from 17 and the best rating since september 2007. That underscores shinzo abes efforts on the economy as he comes upon a reelection. 0 global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. Guy catalan separatists signaled that they may move toward a unilateral declaration of independence early this week after yesterdays referendum. Government spokesman said hundreds of activists were injured on sunday as they try to stop spanish right police from sundown the vote. He appealed for your support when rajoy refused to recognize the referendum. Referendums been no in catalonia it all spaniards have seen that our rule of law is strong and enforced that a response to those who breach it better reacts when faced by those who oppose it. Dayco guy maria tadeo joins us. Yesterday, as you wetioned, the president said have earned the right to become an independent republic and will be calling on parliament to enact the law which would make catalonia an independent nation within 48 hours. We have a breaking a bit of breaking news, theyre going to be meeting here so we are going to get specific dates and a guidance of how this could happen. Our understanding is if this were to take place, the Justice System however would happen to step in because this is a very serious thing. What we think is before this happens, the justice is likely to step in and he may be told to step away from office are being dismissed. Charges that it is a violation of the constitution. Guy how does rajoy handle this . This . Es he move on from maria it is a pr disaster for the Spanish Government and they know it. They say it has been a double whammy. The catalans went ahead and voted. The yes vote one the yes vote won. Very nasty violence. I was on the ground when it happened. This is something that might roys hes thinks he did the right thing, protecting the constitution and in fact, the Spanish Government thinks a lot of mileage couldve been prevented if the police had done what they were told. A lot of polling stations did not happen. Guy maria, thank you very much indeed. What we are seeing this morning is widening. Spanish government bonds over german bunds. We are seeing a situation in italy as well. Lets go and get a take on what is happening here. Mark, we are seeing a reaction to what is happening here. What do you make of the events over the weekend . In the Market Reaction to them . And the Market Reaction to them . Mark a very little Market Reaction. The ebix is down a bit more spanish bonds are widening but overall, the peripheral bond only widening. The euro is only start is only slightly weaker. Story. Ore of a dollar well we see his investors dont know how to play this. This is not going to disappear. It is not going to go way. Leaders have backed themselves into a corner. They cannot step away from declaring independence without major concessions from the Central Government and investors are very worried about that. The worrying outcome is it might be backing for an official referendum at some point in the future, especially after the civil unrest this weekend. Yet do worry that a large chunk investors know this is going to be a slow burner, it is going to stay on the radar for a long time but they dont have to react in the shortterm. Guy lets move on and talk about the dollar move. Im struggling. Kevin walsh as fed chair, how do i price that in . Im trying to get my head around why the president of the United States would want to put this would want to put a hawk into that position would want to put a hawk into that position . Mark it is a question that a lot of investors are struggling with. You see investors chase are pushed trends as they try to make up as much return for the reset their Balance Sheet or go back to zero. It is very hard this fourthquarter. Trump team to change his mind every few weeks. Trump seems to change his mind every few weeks. We have no real clarity. He did discuss several possibilities on friday but everyone focused on with two , sor board of governors theres a lot of uncertainty around the fed. We have uncertainty about the possibility of stimulus in terms of if the structure investments. Trump, so theres a lot of uncertainty around the said he doesnt belin privatepublic partnership. Question. Uick investors, does the pen can confirm that theory . The export story looking really celebrate now. Mark that is the right message to take. The japanese economy has been doing better. Theres this theme that japans growth has surpassed expectation. You have seen other countries disappoint. Japan is one of those that expectation has been revived up. There are signs of growth. Growth andtrong theres no sign of runaway inflation, but the economy is doing ok. That is an economy that is doing well despite the fact growth the population is shrinking. It continues to be very supportive for equities with a weaker yen. Guy mark, great stuff. Mark cudmore joining us. You can follow the whole team on your bloomberg. Smart analysis, day after day. You can use another function on your bloomberg. You can use it to watch this program. Is the tv function. What it allows you to do is walk through the timeline but also access all the charts that we are using, the data checks, the fox now take, the breaking news. Next, we are going to be talking about what is happening in catalonia. We will work our way through to the market open. Also talking about what is going on in the u. K. Monarch, the airline grounded over the weekend. Thousands of people left stranded. What does a signal about the winter ahead. Well discuss that next. This is bloomberg. Guy 7 46 a. M. In london. Lets get an update on what is happening in las vegas. Juliette guy, we saw this devoting story. Authorities have shut down part of the Las Vegas Strips test strip after receiving reports of an active shooter at mandalay bay. Multiple victims are being transported to hospitals are several swat teams were sent to the hotel and officers reported being pinned down by gunfire. Isbal Construction Materials nearing an agreement according to people familiar. The company could announce a deal as early as six weeks. The agreement may value it at 7. 5 million. A refuse to be john cryan may face pressure from investors. That is according to the sunday times citing one of the banks largest investors. We havent seen any sign of. Rowth in the Investment Bank we need to see this to prove the strategy is working. There of the u. K. Expect brexit deals to reach 5 billion or more. They find it more difficult than anticipated. Hedge fund manager says new reappearing roles on research will result new european rules on research will result in less. Will cause the cost of capital to rise. Resulting in those with less access to the market trading less. That is your Bloomberg Business flash, guy. Guy thank you, juliette. Monica airlines has in place into Administration Come off lights being canceled. It is launching a program to fly 110,000 stranded customers back to the u. K. Chris grayling describes this as the biggest repatriation ever attempted. Ben katz joins us now. Lets start off i want to put what went wrong behind us. What does it tell us about those who remain . Say that wefair to may see the more bankruptcies. The situation we are seeing is with the drop in fuel prices, kerosene sitting around 50. That has allowed carriers to ramp up the capacity with a light of pricing pressure on a lot of the smaller guys like monarch. You are seeing the same kind of restructuring across the entire region. Guy does this capacity disappear echo disappear . What happens to that capacity . Ben l when we are what we are seeing is taking an interest at what they can get out of monarch. The other option is they split it up. The other option is to expand organically. They are goingar to expand and build a vacuum and take up extra capacity. Up. Prices are going airlines clearly hedge. Small carriers tend to be unhedged. The price of oil has started to go up, does that mean with the huge amount of capacity being in , plus rising fuel costs, does that mean this winter is going to be a tough one for the locals . Ben it is going to be an interesting one. We are looking towards ryanair. Ryanair is one of the Biggest Airlines in the world. Their capacity wrapup has been remarkable. Theirin a position pilot situation. It will be interesting to see what impact that has on pricing. We should expect lower yields from them. Well see what effect will be going into the results period for all the airlines. Guy thank you very much, indeed. We are minutes away from the market open. Well take a look at todays movers. Acquisitions. New well deal with the details of that. Plus keep an eye on what these Airline Stocks are going to do. Market open is eight minutes away. This is bloomberg. Guy 7 54 in london. Vegas. Orning in las we continue to monitor events in las vegas surrounding the active shooter story. We will continue to keep you updated as the situation develops in the early hours of the morning in las vegas. We still are relying on a series of reports that are getting more details but still remain difficult to get a full picture of what is happening on the ground. Lets update you on what else were watching. Keep an eye on crh, the consolidation of the concrete sector continues. We are seeing more of it this morning. The average company so were watching the quite carefully. As we mentioned we are watching what is happening in the Airline Sector. This after monarch was placed into administration over the weekend. We will continue to see what the impact is. The rest of the Airline Sector this morning and obviously a place. Rbulent pace at the moment it looks like european markets are going to open fairly flat. Germany is going to be outperforming a little bit at the get go of trade. Keep an eye on spreads, spreads spain to germany. The market open is next. This is bloomberg. Guy the spanish market has opened softer. It is a significant underperformance, down by 1. 31 in percentage terms. You also have the european markets doing very little of it much more pronounced underperformance than the spreads let us to believe. That is the broader picture. We will show you what is happening in the individual points. We have to change here. We have general insurer up in the nordics and you have easyjet and ryan air both rising this morning, up 2. 47 . Monarch is grounded. Direct is trading higher. There is an expectation that higher. Is trading a the downside, you have bunch of Spanish Banks that are weak this morning. You can see that. The pain we felt this morning. We are seeing impact coming through and Spanish Banks are down 2 . Some of the Smaller Banks down 3 or 4 . The weakness is coming into the market this morning. Bonds are part of this story. You see this spread widening. The Spanish Government bonds versus the German Government bonds. There is a ripple affect coming through in bcps. They are widening out over bunds, as well. This follows the referendum in catalonia that was marred by violence over the weekend and is unresolved in terms of what it will mean. Lets talk about what the risk means for various asset classes. How does the market react to a referendum that is unofficial, Margaret White quite a lot of violent marred by quite a lot of violence and is still inconclusive . How do i price that in . Does the euro price it in . Guest as far as the violence aspect, there is no question about it. It adds headline risk. But the Market Reaction is taking the view that it is more of an idiosyncratic risk concentrated on spain as opposed to much of an issue about eurozone or European Union in general. That is the right view in the potentiallyis placing a constitutional crisis, but not something that is really [no audio] guy mr. Macron is looking to drive europe forward. He needs people around him to make that happen. Nevertheless, he needs others to go along with him. That is the premise driving positive sentiments around for eurozone about the french election. If spain is distracted, does that show guest you are right. There is risk their the Spanish Government will be distracted. It will affect how they handle negotiations with regions. That Structural Reforms will take a setback and growth might suffer. Lets not forget spain is one of the fastestgrowing economies in the eurozone right now. You are right, macron has given a boost into sentiment, but we should not forget the soft indicators coming out of the eurozone. They are much better than people initially believed. This is true not only for greece, if you exclude it is actually a pretty wide spread recovery. Setback, but of a i think it is more likely to be concentrated risk as opposed to a fullblown crisis. Guy it is just a bouncing act, really. Learned, if have you Pay Attention to politics, there is strong data pointing you to the ecb taking some action, albeit very slowly, then Political Risk on the other side. Thesense is that it is former that is the bigger story right now. Guest let me say the following. There is definitely the element of Political Risk, but the nature of the Political Risk that the market is sensing and sniffing right now is nowhere near as troublesome as it was a couple years ago. We were talking about this integration of the eurozone. Now we are talking about pockets of isolated constitutional crisis, but nothing that can have a larger scale effect on the eurozone in general. Up the bcps have tightened im trying to get some charts here to get the scale of what we are talking about. This is not the chart i was hoping. Italy, spain, germany and trying to take a sort of longterm. That is the financial crisis. Here withn is, down 120 over germany, 1. 20 over germany, is that too high given what is happening . Guest you can argue that come up but my main point is that you will see a tight correlation between all the various peripheral countries. The point is, the market will differentiate this stands and it will lead to widening spanish spreads that will not necessarily be reflected because this is not being treated as a eurozone general problem, but a idiosyncratic issue in spain. Misfirethis the first that i joined the dot with italy . Guest im not too sure about that because there is a big difference now as compared to 2011 and 25. Of theow in a end Economic Growth is looking better than it was back then and what people accepted expected. There is a risk. Nonetheless, to the extent we get the trickling through a better economic data, into consumers and firms, i really doubt we are going to see the amount of discontent we used to see in 2011 or 2012. Guy eurodollar. Guest yep. Guy seems to be struggling there. What does it take to get beyond their, what does it take to keep us there, and what does it take to go down . Guest as far as downsized risk, i think it would really take Trump Administration delivering a very poor u. S. Fiscal stimulus plan. As it stands in my view, the current proposal opposes headline risk to europe, but nothing in terms of guy its the dollar part of the pair. Guest yes, as far as the outside it is concerned, it is more technical than fundamental. So, the year or eurodollar has been undervalued. Areestimates of fair value 1. 24, 1. 25. That means the gap has closed significantly. There is still a margin for appreciation, but the tailwind is not as strong. Having said that, looking to all converging ofof fair value, a question we ask, our answer to that is it seems to overshoot. There is a technical argument there that eurodollar might overshoot it. Guy we will keep an eye on that story and monitor the dollar side as we work our way through this morning. He is going to stay with us. March to washington. President trump meeting kevin walsh about replacing janet yellen. The market is reacting to this. He is seen at the hawkish and of the spectrum. Why would donald trump get a hawkish to run the fed at this point . I guess that is my question. We will find out after the break. This is bloomberg. , Las Vegas Pacific time, means it is 15 minutes past midnight and las vegas. We are monitoring the situation. The latest we have is that numerous victims have been found from this shooting. This is according to jeff clark on abc news and the last few minutes. We willeants itnitor the situation as we develops. We will continue to bring the news as we get it signing the situation. I want to take you to the markets. Lets find out what is going on there. ,e have a decent movement there a bit of momentum. The eurodollar is trading 1. 1752 and a less hour, hour and a half. Lets talk about how this is impacting equities. Getting a bit from the story maybe. The ibex is under pressure this morning. It is trading significantly more softly than these markets. 8 in theby. 7 , euro. Lets go the nejra cehic. We were anticipating seeing moves in u. K. Homebuilders after they announced a 10 billion pound extension to the help to buy program. It is one of the best performers on the stocks program, up 4. 2 , the highest since 2015. On the downside, i am looking at bic heading for a 2014 low. That was while markets were trading here in europe. Perhaps just after, 20 minutes after we got those numbers. Holds been downgraded to from line. Fromtle bit desk from buy. A little bit of a downgrade. Daily mail is down 2. 1 at the moment. The key headline sees a fouryear adjustment pretax toward the lower end of the estimates range. That is weighing on the stocks this morning. Guy thank you indeed. Dollar strengthening, we were talking about it. Treasury yields on the move, as well. President trump and secretary mnuchin has met with kevin walsh about succeeding former chair janet yellen. Kevin walsh has a hawkish i. S. He was critical of the fed. Yellen is still under consideration. Other nominees include stanford andomist and john Allison Glenn hubbard. Said he is considering National EconomicCouncil Director gary cohn. That story was firmer a few weeks ago. Lets talk about what this could mean. The fed is the market is looking at the situation surrounding the fed and it is scuttlebutt and rumor and meetings have taken place. They dont know what is happening in those meetings, but they are looking at it and saying, if walsh get in, he would be at the more hawkish and of the perspective of the nominees. A, do we know that and b, white would donald trump put someone more hawkish in the fed chair why would donald trump put someone more hawkish in the fed chair . Guest we dont know if he will be hawkish. There was an underestimation of a degree of the structural damage to the economy because of the crisis. A periodming out of where the dollar sustained significant losses. Positioning has been extended. You get these headlines, the u. S. Tax reforms. Potentiallyn walsh heading toward the hawkish site if he is appointed, and you get paring back of these extended dollar shorts. I think the market will hop and dance and will range trade over the next weeks tenmonth twoyear and and fundamentally, i would find it difficult to believe trump for the u. S. Administration would appoint someone with the expectations it will run a more aggressive tightening compared to the current chairwoman. Yellen has blown up her prospects, though. Guest it is difficult to say. Things that has potentially reduced her chances of getting reelected is the fact that she opposes deregulation. She is a Firm Believer in the financial regulation. Lets take a step back. Turned . Dollar thats the genesis of all of this. Guest fundamentally, no. I remain fundamentally bearish on the dollar largely because on various metrics i see the dollar being overvalued, but nowhere near it was at the beginning of the year. A u. S. See administration that remains in disarray and i still think there is a lot of repricing and flows that need to come back to the eurozone. Having said all that, i go back to the previous point. We had a big run in the dollar downside in the might be an element of bearing that back in the next few months or so. Fundamentally, i remain bearish on the dollar. Guy thank you very much indeed. He is coming back in a few minutes time. A couple things i want to show you. This is the ibex, the threeday chart. You can see it buying into the weekend. Then we have this get down this morning. We have traced 50 of that gap. We were down well over 1 and now we are bouncing back. We have retraced a little bit. Lets zoom in and we will see more of that. That is where we are at the moment. Spanish banks seem to be under pressure this morning and that is where the market is pricing this story and. Lets get more details on what is happening. Lets find out what is going on in las vegas and the shooting taking place there. We go to the developing story. Las vegas Police Say One n ascted shooter is dow two people are reported dead and 20 others injured at a Music Festival. They shut down part of the Las Vegas Strip after reports of an active shooter near the root 91 harvest festival. Flights have been halted due to the incident. Monarch airlines is placed under administration and all of its flights have been canceled following the suspension of its air operating certificate of it executives were appointed of the administrators. They will work with Civil Aviation authorities regarding the repatriation of 110,000 customers currently overseas. Materialsstruction crh is nearing an agreement to acquire 20 american cement according to people familiar with the matter. They could announce a deal as early as this week. At 350 value suwannee million. Crh declined to comment and sewanee could not be reached for comment. That is your Bloomberg Business flash. Guy lets move on to what is happening in the united kingdom. Theresa may is heading into the annual conference. Why hasnt she fired ors johnson . Boris johnson . Yesterday, she could only laugh and dodge the question as to whether johnson was unsackable. What i have is a cabinet reunited and that is what you will see this week. United in a mission to build a country that works for everyone and agreed on the approach we take in florence. Guy theresa may, the british Prime Minister. How long is the question evil are asking this morning. I want to start with exhibit a. Being quite from tort over the last period the latest data showing us we are now not short of the british pound anymore. What happens next . I think that to a large extent, we are going to potentially consolidate. I wouldnt be surprised if we get an extension of long dead. Betweenthis tugofwar the messy politics and on the other hand, you get a boost in sterling because of the boe november rate hikes. Nevertheless, they are still allowed in the marketplace and you believe they will deliver in november but it will be a policy mistake. In which case you can turn fundamentally bullish. Guy you are long in november, short after november . Guest its really difficult. My view is that i would like to stay on the sidelines of sterling for now. You have messy, politics in the u. K. And the dollar factor, which is going to consolidate over the next few weeks and months. Potentially strengthening. The other thing about sterling, all our evaluation models have been thrown out the window. We dont know the structural damage in the u. K. Economy. To 1. 20,he move down then 1. 30. The market might be sensing there is too much in the price. Guy that is my question. Does this open the possibility of a big downside move . Banks are neutral, so shorts could go back on again. The potential of downside is very big. Guest i think we need to see over the next few weeks a really rapid deterioration in negotiations and potential you turn the bank of england, which i think is unlikely. Guy we will wait to see what happens in november and after november. Thank you for being with us. Next, we continue to react what is happening in catalonia. The ibex is down sharply. So new touch screens. And biometrics. In 574 branches. All done by. Yesterday. Banks arent just undergoing a face lift. Theyre undergoing a transformation. A data fueled, security driven shift in applications and customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Hello, mr. Deets. Every Branch Running like headquarters. Thats how you outmaneuver. The catalonia question after hundreds are injured in this referendum. With original government declare independence this week . Las vegas police is investigating reports of an active shooter near the mandalay bay casino. We are getting reports as we speak. Well bring you up to speed in a moment. Midnight, 30ter minutes after mend that. Granted u. K. Based airline cancels all flights after being put into administration. A number of the bigger local carriers are trading higher this morning. Jetair is trading up, easy trading up. Good morning and welcome, you are watching boomer but markets, this is the european open. Im guy johnson in london. Just on midnight in las vegas, the airports have been shut down. One of the shooters involved in the incident has been either shot and killed or at least subdued. We are understanding from the police in las vegas that numerous victims have been found at the scene of the shooting, part of the strip was shut down a little bit earlier on. Interesting picture as you look at that one. We are going to continue to monitor events and we will bring you more news as we get it in the next few minutes. European equities up and running this morning and we are trading reasonably positively. Has taken a like lower in the next couple hours. Part of this might be due to what is happening in the United States. Equities are starting off flat, a bit of a better bid. The dax is performing. Ibex is still 10 negative territory. You can see this is the last three days. They cap lower first thing this morning. We had retraced 50 of that cap lower that it is the banks that are taking the egg is hit. Spreads are the biggest hit. Spreads are widening. Catalonian separatists leaders are declaring independence earlier this week. Backedsperson said they independence with 3 million votes. The scene obviously dominated by pictures that you are looking at. Hundreds injured as they tried to vote. Spanish right police shutting down the vote. President appealing for eu support. The premise are focusing on the legalities surrounding this, refusing to recognize it. Joining us now, carl weinberg, chief economist of High Frequency economics. Europe had a lot of positive news striding it in the past few months, crystallized around the french election. Doing at need to put economic point of view that on the table . Guest it should never have been off the table in spain. We have a government that cant get a majority together or pass its own budget. A violent manifestation of that instability. Does it affect project europe . To the extent it has been there before, there is nothing new here. The violence is a tragic story, but not necessarily new. From existential press in europe, what do we worry about . We worry about Central Banks . Should there be some kind of an interruption like that . We should worry about spain servicing the esm. Those are the things that come to me in terms of how this links directly into project europe and i dont see immediate threat to any of that. We see an extension of the political crisis weve seen before, that it could get worse and investors are likely to be weary of that. Guy i feel that and then i raised you the data we are seeing at the moment. Things are incredibly strong. Manufacturing pmis are about 60 at the moment. , am im in investor looking at these numbers and going, after a very long period of underperformance guest pmis are not economic indicators. It is surveybased data. You look at 60 something pmis, that is still production only rising 3 . You say to yourself on the weather channel, we are not seeing what they are saying. Somebody better call and talk to them. These pmis dont have much history. 2 to 3 gdp growth is and the core story is that we are looking at millions of europeans unemployed. One third more than what we saw going into 2007. When you look at the situation from the ecb point of view, growth is nice, but slack is what matters. Slack in the labor force is high right now. We will not exceed four implement anytime in the for siebel future. Foreseeable future. Guy from an investors point of view, we still got assimilative policy. There is a substantial output gap. We should seek Wage Inflation at any point in the future. That is the reason to be positive about your, isnt it . Guest looking beyond macroeconomics, there are external factors that would be good for europe. Im looking at china, silk road, generating exports to europe over the silk road, good for the chinese, but the containers dont go back empty. Increasing it by 10 fold to sell along the silk route has started boosting exports in europe. When i think about where it is moving forward if i am an investor, the parts of your i look at is not the Traditional Industries that are export oriented. Export stimulus will be what pulls europe forward as a move forward in the next year or two. Guy we are comfortable the story is intact. Those numbers, do they work north of 120 . Guest im looking at it against the yuan. Europe will see exports grow. It will not be in the dollar sphere, but on that you on sphere. Exchange, im concerned about the financial weakness of the dollar moving forward in the shortterm and longterm, focusing on what is happening in china not the United States. It is linked to the oil market and commodities, but saudi arabia prices oil in a you on as russia is doing and limiting and moving and tapering down the dollar as a global transaction currency. This is the story nobody is paying attention to. There is a core weakness for the mayar and Interest Rates impact the dollar fluctuation on a daytoday basis, but i think the dollar is going to be less important. Guy i understand the 8 42 a. M. In a london, 9 42 in berlin and madrid. Just on midnight, 40 minutes past midnight in las vegas. Las vegas Police Say One perspective shooter is down and they do not believe there is any more shooters. There was a shooting at the Music Festival at the Las Vegas Strip. Authorities shut down part of the strip at i 15 after reports of an active shooter at the root 91 harvest festival. Spain, catalog separatist leaders signaled the maybe moving toward a unilateral declaration of independence this week. After hundreds of activists were injured yesterday as they tried to stop police from shutting down an illegal referendum. They appealed to the European Union to the result of the election the following day. Donald trump used twitter to tell his secretary of state that time seeking his negotiations with north korea. Rex tillerson acknowledge he is communicating directly with the rogue nation. A state Department Spokesman said there is no country action in the position. Dr. Diction in a position contradiction in the position. Theresa may pivoted around white she did not fire boris johnson. Yesterday, may could only laugh and dots the question about whether johnson was un sackable. What i have is a cabinet united in the mission of this government. United in a mission to the country that works for everyone and agreed on the approach that we take in florence. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Guy . Guy thanks very much indeed. The spanish markets are softening on the equity front. We are awaiting a press conference in las vegas. Lets talk about the stories we have seen developing this morning. Have lovers rising in japan the highest in a decade. 22 in this at quarter, above 17 . Well above since september, 2007. Success onter abes the economy as he heads into an election later this month. Carl weinberg, chief economist still with us. In some ways, the japanese economy is doing what you expect. Currencies working for the exports, starting to wrap up, feeling positive. The domestic economy does not look quite so buoyant. It needs to be an exporter. It cant be a domestic leader of an economy looking at guest just to put that number out there. Overall, the economy is shrinking. We are getting growth now, the underlying demographics are working against this economy. For investors, there are shortterm place in the nikkei and the biggest of those is investors in japan have no choice but to put money into the nikkei because the bank of japan is buying all the bonds. Option but them no positive punishment is for the stock market. If you look at the stock market in terms of relations and but in assumptions hillary will decrease by. 5 every year for the seeable furniture and the domestic market is the biggest market for most companies, especially for small companies, then the demographics argue against the stock market being able to maintain these levels once the artificial levels support the bank of japan comes to an end. Guy japan has a history and technology. It is an area investors value highly at this point. You look at the core components of the s p rally to understand that. Is that an area i should look at in terms of japan being an area you can argue it is undervalued that will do well in the future . This will be an increasing part of our thesis. Guest technology is always good, it makes companies do things better than they did before. That is great for companies. You start to be able to sell the stocks you make and if you have 100 widgets coming out of your factory and now you can make 110 with the same workers, it doesnt do any good if there are fewer people in the economy to buy the stuff. Ago, baby boomers started retiring and maybe they spent more in the retiring than they were working. No change in demand. But now they are dying. Aggregate demand are one of the population is one of the core drivers of aggregate demand. Y will be subjecting subtracting from aggregate demand for the next 20 years or more. You look at a company in japan and you say they might be able to do better, that all companies will face shrinking markets and since the domestic market is the core of industrial output in japan, unless they can be the chinese at exports, japans economy has destroyed. Guy lets talk about china. How do i think about that political event . How do i think about what happens after the political event . Are we in a phony war at the moment insomuch as we dont understand what the event will produce and what will happen after it . For then a quiet period chinese little story. Guest i think what we will get out of the congress is an economic strategy. Everyone is worried about her merely not getting his job remove renewed, but i think he is fine. Not gettingmier li ewed, but i think he is fine. They are making some progress in getting control over the trade routes on the South China Sea and part of that is linked to the strategy on korea. They wont help the u. S. Unless they get something in return. Think they will be reaffirmed on the strategy and will get five more years of the same, which is a growing role in china industry ande and politics and in world finance. Guy what does the credit story look like . Guest there will be bumps on the road to china. They say there are nonperforming loans in china. Thats ridiculous. Its been that way for decades. The chinese are now recognizing the loans rather than seeing that as a problem, i see that as a first step of the recovery process. If you are burying nonperforming loans under the carpet, you are not fixing them. In my experience in emerging markets, there are always banking crises and modernization. Chinas baking crazies are less important crises are less important than the state owned industries and what we have seen traditional xi is banking in the economy and lent on the basis of merit than policy. Those are good developments. Guy very nice to see you on this side of the atlantic. Carl weinberg, chief economist. He will join the team on london dab Digital Radio in a few minutes time, me included. I am going to talk about pmi data. He is growing. We have the final data from france kicking up a little bit, but nothing to see here. This is the final never. We will get more data, 56. 1. Data, believe in survey certainly well north of that 50 line. Up next, we will take a look at the new moves. This coming off the announcement Monarch Airlines going to administrations. Ryan air and easyjet are trading higher. Capacity taken out of the european skies. We will have that story next for you. This is bloomberg. Minutes past the hour. Lets find out what is moving with nejra cehic. Nejra im starting with the airlines. Airlines going for insolvency. Uks Biggest Airline failure today giving easyjet and ryanair a list. Easyjet up 4. 2 . Homebuilders have been in focus with the u. K. Government pledging a 10 billion pound extension to like a program. Barratt earlier was higher. It is hitting a record high in this session. On the downside, im looking at a greco. Been driven by cyclical upswing in the u. S. Based on the recovery and rebuild efforts following the hurricanes. They say any lift could be temporary and can be offset by difficulty elsewhere. Shares are down 6. 1 today. We are awaiting a press conference in las vegas regarding what has taken place. We had fatalities, a number of people injured in a shooting earlier on we saw the airport shutdown. Now understand there are they believe there are no more shooters. Only one sugar is d shooter is down. Difficult night in las vegas. Clearly a very big police response. The other thing i want to mention is that there has been a story developing in spain over the last 48 hours. The referendum was one conducted with not insubstantial violence and that has pressed in this morning. The ibex coming under pressure. There is a threeday chart, andace around 50 of that especially are down and under pressure this morning as a result of what we have seen. We spoke to catalan authorities and government. We continued the coverage up next. It is surveillance and im going to Digital Radio. Francine catalonia clash. Hundreds of people were injured by police at the polls. The euro falls and the yields push higher. The trump doctrine. The u. S. President is said to give a speech highlighting the benefits of deregulation. Rumors swirled that he will pick the next fed chair. Newnd manager says the european rules coming into play from methoifid ii will result in less efficient markets. New european rules coming into