Luxembourg, greece, norway, spain and ireland. Ascento continuing its to the highest level since 2014. Sovereign bond yields, commodities, ubs your final three columns. Best annual results since 2011. The election of Emmanuel Macron combining with that global it is in confidence being bolstered by macrons Economic Reforms and tax cuts implemented by the previous administration. Growth at 1. 9 . Far above the. 8 average through in the 10 years 2016. We have some stories to tell you about today. In 9 increase in fourthquarter adjusted profit, narrowly missing estimates. Orders were stronger in china and north america, particularly its diagnostic equipment business. They missed on Health Care Equipment and services while exiting from manufacture products the Amsterdam Company is aiming for more totnerships with hospitals sell xray and diagnostics machines. Today,up almost 5 reporting its first gain in annual profit for four years. The watchmaker boosting its share of the lowend timepiece market thanks to growth at the swatch brand seeing growth in the lowend. Many producer struggling with a drop in demand after apple catapulted itself into the position of the Worlds Largest watch brand. Shares of 5 . Up 5 . Julie its looking slightly better than it did earlier. At one point today, the nasdaq was down as much as 1 . All three major averages are lower. We are seeing the biggest twoday decline for the major averages going back to august. For the s p, still the biggest oneday decline since august. Take a look at the bloomberg here. We are looking at the price swings in the s p 500. The yellow line,. 5 on either side. The blue line, 1 . On friday, we had only the first 1 gain in the s p going back to september, now followed by these big declines we have in the s p 500 that are the largest since last august. Swings have been returning to the market, bigger swings. Still relatively muted by historical standards. The volatility index also at its highest since august. Reachingy has been record lows at the end of last year going into this year. That is returning to some degree. In terms of whats moving in todays session, we are still watching the Ripple Effect of this announcement that amazon, jpmorgan and Berkshire Hathaway will be providing health care through a joint venture to their own employees. We talked about Health Care Companies and the pharmacy companies. Here are the drug benefits manufacturers. Express scripts and america amerisourcebergen and make uickesson. Bike sales down 11 . Polaris also falling. Its earnings per share forecast for the beginning of the year below estimates. Vonnie thank you for that update. As julie mentioned, its the triple threat we are talking about today. Berkshire hathaway and jpmorgan teaming up to create a health care company. We have elevated a valuations in downturn. Now this we are speaking now with carmel. Ellso shes the director of research and Portfolio Manager at Janus Henderson investors. Iss interesting deal symbolic of something bigger that investors need to be watching. Its a continuation of that disruption that sitting all the companies. An Online Platform teaming up with an Insurance Company to create something to bring down the cost of health care. Vonnie we talk about changing demographics in the space and the changing labor force. Is this another iteration, a trend that will be an investment trend for years to come . Gerrie absolutely. Any company that has that margins and lacks transparency in how they give their profits and how they generate them is at risk. Vonnie what sectors specifically should they stay way from . Away from . Carmel when we think about it, theres an information edge. Thats what we tend to focus on right now. A company like a jpmorgan has information on enormous amounts of mortgages and credit cards and other spending habits. They can start to capitalize on that and monetize it. It will hit the financial industries, including insurance, banks and capital markets. All of those have very that spreads that will come down over time. Mark you invest globally. Where are the best opportunities in europe right now . Carmel right now in europe, looking for somebody who has an information or technological edge. Create a wayed to createdd moores law, a technology that improves the density of chips. The technology is even more difficult to achieve been getting a man on the moon. They are important for the future of technology. That is an excellent choice. Bank isina construction one stock you like. Whats behind that call . Carmel think about which markets are growing and which had the largest addressable and growing middle class. It is china. Thechinese large banks are ones that invest in those companies that help them to grow. Derisked its balance sheet. Vonnie alibaba as well. What is the best bullish case there . Carmel if amazon with less competition the growth will be decades long. Vonnie what about Something LikeGoldman Sachs . Im wondering where you see right. Getting it carmel just before i came on, you were showing the vix. Volatility is great for investment banks. Goldman sachs is one of the few firms that didnt reduce its fic operations. Take that in conjunction with deregulation, i think goldman is an excellent choice. Vonnie why not some of the other banks . Gerrie it has underperformed the other banks. Mark what is going to prompt this midcycle correction . It is a number of things. Everyone is watching the 10 year. That is likely to be one of the actual catalysts for correction. Theres also fears of inflation. If we were to get a surprise on inflation front, people thought Interest Rates were going to rise faster, that would be a shock to the system as well. Vonnie you are a specialist in europe. Im wondering what youre thinking about european integration, brexit and where there might be opportunities and where you would stay away from. Carmel if you look at the u. K. , the dividend yields there are excellent. Theres still some opportunity in that market overall. I expect a soft landing on the brexit. Vonnie infrastructure and state of the Union Tonight do you see any opportunities in the next two years in the u. S. . Carmel the Infrastructure Development will be a bit of a disappointment. Only 200 billion is coming from the federal government. The states have to cough up the rest of the money. It will be a bit of a disappointment in the longer term. Isnie Carmel Wellso director of research and Portfolio Manager at Janus Henderson investors. We want to get back to the hearing, Steve Mnuchin speaking before the Senate Committee on banking, housing and urban development. You can see senator Elizabeth Warren is questioning him. Weve created all these grenades and pulled the pins out and threw them into our economy and help blowup the American Economic system. At the height of its impact on the financial system, 18 months before the crash, countrywide was a 200 billion bank, which is smaller than some of the banks that would be deregulated by this bill. My question is, why would you be so eager to take these banks off the watchlist to deregulate it and make it easier for them to follow whatever practices they want to follow . Mnuchin i share your concerns about countrywide. There were lots of mistakes that went on there, particularly at the mortgages. Entities can be regulated by their primary regulators. This is something that requires bipartisan support. It is up for congress to decide whether they want to raise the limits. Warren youve been pushing on raising the level from 50 billion to 250 billion. Wif you think that means we wil be taking on more risk, i wish you would tell us so. Banks have record profits right now. They are rolling in money. They just got a giant tax giveaway. Theyve got even more money. They dont need another chance to blow up this economy. Thank you, mr. Chairman. Thank you for joining us once again. Let me stay on this topic i think an important point that here, thesestressed yea banks that are 50 billion to 250 billion that would no longer be automatically designated as cities, they are heavily regulated anyway. , iside of this designation it not true that all of these banks are subject to a huge raft of regulations that have nothing to do with the designation . Sec. Mnuchin that is true. In many cases, they are regulated by four different entities. Multiple regulators. These banks now have huge capital standards. The industry is heavily capitalized. They have very high liquidity requirements, new requirements that didnt exist prior to the crash. Isnt it also true that most of these entities engage in pretty ordinary, plainvanilla banking activities as opposed to the more exotic, complex and interconnected International Business of the truly enormous banks . Sec. Mnuchin all three statements. Thats why its perfectly reasonable to not automatically designate those banks that dont create systemic risk. Let me briefly thank you and congratulate you for your work and that of your team on tax reform. Your folks were terrific to work between collaboration the administration and Congress Allowed us to produce something that is enormously constructive. You mentioned in response to a question that it is the view of treasury that we are likely to have approximately 3 Economic Growth for some time. That is true. I just want to particularly thank you and senator scott and others who worked closely with us. Thank you. The Congressional Budget Office forecasted prior to the tax reform that our Economic Growth would average 1. 9 . We are now at approximately 3 before the tremendous benefits of this tax reform have fully kicked in and we are already at the 3 . If we sustain anything close to 3 , the federal government will taken much more revenue as a result of a bigger economy than we were projected to take in with 1. 9 growth. That is very accurate. I think its a very important factor. I want to touch briefly on the discussion on mortgages. Im eager to see us make some progress on this. There seems tot be a consensus that we should have private capital in front of taxpayer risk on guarantees. I would disagree with your view, but this is understandably a subjective matter, that a government guarantee is a necessary precondition to have a liquid 30 year mortgage. As you know well, the average duration of a 30 year mortgages much less than that mortgage is much less than that. Anywhere from 712 years is about right. We have a number of other nonguaranteed thirtyyear securities that play an Important Role in the capital markets. Vonnie you are watching the annual report from the treasury secretary, Steve Mnuchin. Senator warren and senator toomey arguing he wouldnt say whether the treasury has there are administered of options that administrative options. He said metlife was released from the designation as a legal decision. Metlife is leading stocks lower in the dow, down 9 . Lets get to politics here. Prime minister theresa may is prepared to head to china with 50 Business Leaders in tow. Shes unlikely to escape turmoil merrick joinsavid us. Are we reliving the Brexit Debate . These leaked documents have opened old wounds. Say this justcamp shows the Economic Risks that are still out there. Predicted economic armageddon, it didnt happen. Criticized for being too pessimistic before the vote. Hes pointing out that the forecasts have come true. It is yet again another example of the heated opinions on both sides. Mark theresa may escaping the country, trying to repair what some might say is not the best of relations right now with the chinese. We are very eager to prove that relationship. Its one of these important new trade relationships that will make or break brexit, i suppose, after we leave the european union. Shes going with 50 business , some of the big names in corporates trying to smooth over ties. Theyve been using this phrase, the golden era of ties between Great Britain and china. There are lots of underlying tensions here. A story this afternoon showing chinas one of seven countries lobbying to get a bit of the wing production business for airbus, which britain has dominated for decades. China lobbying to get a bit of that manufacturing taken over to china after brexit. It is a bit of a double edged sword. You have the former governor of hong kong weighing in saying she should be raising questions over the treatment of hong kong. Also, the neverending problems with human rights there. Shes nervous about jeopardizing the relationship. Vonnie is this what its going to look like as she continues to try to get bilateral trade deals with countries and various blocks . This is the biggest roadshow she has done so far with all of these people. Its vital to reach out to these highgrowth emerging markets. The chinas and indias, latin america this is the argument t the brexiters all along they would be free to pursue these trade agreements. Cant sign any deals for now. It cant start any deals until the end of the transition period. We are still a long way off. Mark trying to organize a deal with the eu is proving difficult. Capitalseuropes arent happy with her brexit strategy. It doesnt seem as if shes asking them to make an offer essence of exasperation in the capitals of europe. Shes not able to tell them what they really want. The cabinet has decided. Her, make me an offer. You are the one leaving. You need to tell us what you want. We are getting to crunch time fairly soon. The talks are moving into that phase where they need to spell out what it is they want britain and the European Unions relationship to look like. Mark david merritt. Vonnie lets take another look at the majors. The second day in a row for declines for the major indices. 8 . P 500 down nasdaq deemed the best performer today, still down. 6 . At 14. 4is higher today, right now. This is bloomberg. Vonnie live from new york, im vonnie quinn. Mark live from london, im mark barton. Vonnie time for our latest Bloomberg Business flash. Of the bestknown companies in the United States will collaborate on health care for their employees. Amazon, Berkshire Hathaway and j. P. Morgan chase looking to reduce costs and improve employee satisfaction. They are creating an independent company focused on Technology Solutions that they say will be free from profitmaking incentives and restraints. Express scripts and cvs trading lower. The iphone x price is too high for the device to fuel the super cycle of sales. Wall street Sales Estimates for the next two quarters are too high. That is your latest business flash for this hour. Mark take a look at where european equities are trading into the close. Today,d dax lower falling for the fourth day in five. I will leave you with the currency board. A data heavy day for the euro zone. Stronger foring the quarter tomorrow, Consumer Price inflation. The closes three minutes away. The close is three minutes away. Mark live from bloombergs European Headquarters in london, this is the european close. Im mark barton with fine quinn. Vonnie quinn. Two Industry Groups rising household goods. The others declining. Wentarted in asia and through europe and the u. S. 600 highlights the strength of the euro. There may be other factors. It is showing gains. The distance between it and the performance of the asia pacific and the s p 500, the white line, is slightly diverging. 4 for the euro stock. The other three are rising between 7 and 8 . The euro today has risen to its highest level since december 2014. That is something we will ask our next guest. Lets look at the data, eurozone gdp finishing the year with another quarter of robust growth. Business and household suggesting no end in sight. Gdp up by 6 . That is the lubar. Blue bar. For the eurog and regions expansion for 70 twice 17. It was better than the gdp estimates and economists. It is a pace the region has not seen since the financial crisis in 2008. That is the data out of the eurozone. How are bond markets reacting . We talked about the u. S. 10 year, which is above to percent. The tenyear yield is down a basis point, 68 basis points is where we are. The big move happen to yesterday. We saw a seven basis point move up in the 10 year, the yield the highest level since september 2015. To put it in perspective, the yield has doubled since december 11. Tomorrow we have big inflation data. The economists we have surveyed expect the headline rate come down to 1. 2 from 1. 4 . The german inflation unexpectedly slow. That highlights the challenge the ecb faces right now as it tries to gauge when it can start to unwind its massive stimulus efforts. Vonnie how is it looking . We are finally getting moment in the vix. It is up about 14 . As you have been telling us and we are seeing some moves in the United States. The dollar index bouncing a little but mainly it is staying pretty stagnant. We have the meeting a little later on and we will get that information should there be any new information that might move the dollar. The 10 year yield is definitely reacting to that, 2. 71 . We broke a significant level and above peer group is down and affecting currency trading. 64. 26. It looks like the oil market is up once again. Lets move to gmm and have a look at other markets around the world. You can see it is red across the screen, latin america, south africa. When it comes to currencies, it is a similar story. A lot of currencies are weaker, particularly oil on the move lower in oil. Mark the Global Economy experiencing synchronized growth. Strong equities and slow steady increases in inflation and where are the risks in 2018 . Fromna kyrklund is here Schroder Investment management. Here deal to on the u. S. Tenure creeping up to 2000ercent, highest sent 14. What are we experiencing in the last few days across global asset markets . Johanna we have had a strong start. I wouldnt try to extrapolate too much what is happening today. Mark are you extrapolating anything from the level of the 10 year yield . We have had a couple of apps looking at the 10 year yield saying it is a warning signal. Johanna it is a concern if it was to 3 . It does raise questions about the valuation of the equity market if we see yields rise significantly. There are a couple of other things we should watch. If the bond yield rises in the upswing, then there will be a market rotation. We continue looking at emerging equities hurried the other indicator is what the dollar is doing. The dollar is remaining week weak. Mark does the dollar remained weak . Johanna we continue to see the dollar being weak or in the margins. Mark and that support your view . Vonnie where in em are you looking, is it china or a mixture . Valuebased care we are certainly looking at china also emerging markets in general. It is also about emergingmarket debt and currencies. Vonnie what risks do see in emerging markets . We did get emerging markets when back to two years ago it seemed like emerging markets were falling off of a cliff. Back in 2015, it was a challenge. Global growth wasnt strong enough. It was dominated by the u. S. This time, we are singing seeing an upswing. Again, the dollar is weaker and that helps in emergingmarket assets. That is the big difference between today and 2015. Mark europe versus u. S. In equities, where do pleasure hack . Johanna it comes back to currency. When you are looking at the two markets, there are a number of things. Beat. Ope is high and finally, the sectoral Exposure Technology stocks. The how high do you expect euro to rise against the dollar this year . Are we moving toward 130 . Is there a point where you expressed some caution and does it become more vocal if and when it moves up to those areas . Johanna we look at currencies against the dollar, we are looking at the japanese yen. Part of that view with expectation that the euro can stay strong is partly that we dont think the ecb will talk it down. To some extent, Central Banks are stopping away from currency manipulation. Vonnie i am going to take a look at 6077 in our bloomberg. Chart. Any risk to outlook funds with runaway inflation or above target inflation at this point . Johanna we expect an increase in inflation rate we dont expect it to get out of hand. The key relates to the unemployment rates in the United States. The phillips curve has not kicked in yet. We suggest there is a kink in the phillips curve and it kicks in when the unemployment falls significantly and we are at both levels now. That is the potential upside with risk inflation per we start to see the labor market kick in. For now, it is a cyclical increase. Vonnie weatherby something the Federal Reserve could do in that scenario given where we are now and way we are likely to go . What is your central case for fed move this year . Johanna week are expecting another we are expecting another three rate hikes and a potential for a fourth. We have increased rates. Last year when inflation was lower than expected, the fed continue to raise rates. They continue in a very steady way. Mark are you still downplaying Political Risk . You did so last year and are you making the same call in 2018 . Johanna yes, the challenge with Political Risk is you have attention deficit and we get distracted by shortterm results. There is a shift happening over the surface but it is playing out in months and years erie it is something to take into account years. It is something to take into account. Mark are you diversifying your portfolios now . Point, it ishis time to not be too greedy. We were focused on capturing the upside. To diversify into other areas. We do use alternative assets, commodities are an option. Great to see you. Thank you for joining us. Global head of multiasset investment vonnie . Lets check in on the bloomberg first word news. It hasi arabia announces wrapped up its review in case files and a corruption crackdown. Dozens of executives and government officials were detained. Authorities say everyone who the government agreed to settle with has been released. 65 are still being held. The estimated value of those settlements is 107 billion great there is a report the u. S. And cutter have ended and qatar have ended a fight over airlines. Cutter airways will agree to open up its books for inspection Qatar Airways will agree to open up its books for inspection. Egypt, a coalition of opposition parties and 150 prodemocracy figures are calling on voters to boycott the march president ial election. The group says of the elections are a farce and an absurdity bordering on madness. The incumbent is virtually certain to win. The area economy has its best year and a decade or gdp rose. 6 . The regional economy grow 2. 5 . Growthhas not seen that since before the financial crisis in 2008. It is signaled by the ecb to turn the euro area into a pillar of the economy. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Im taylor riggs. This is bloomberg. Mark thanks so much. The bank of england is speaking. He said investments are up due to global demand. A four Percentage Points below your it should be in relation to before the brexit referendum. He says he does not have advise when it comes to brexit. He sees a pickup in investment here he expects clarity on brexit to help support investment and strong incentives. The eu benefits tremendously from dynamic equivalent. Working is still through inflation. He says the labor market is continuing to tighten and he sees growth returning later this year. Mark carney testifying. Coming up, bitcoin. More of our exclusive interview with the executive on the future of the cryptocurrency. This is bloomberg. The airline has spoken exclusively earlier today with the year and next chief executive at the annual conference in paris. Im interested in euronext crating a market in the cryptocurrency. Know, we will not create a market because the no, we will not create a market because it has nothing to do with it. That bitcoin is not the cryptocurrency. Assets. Encies are clearly, bitcoin is like a piece of art. It can be anything to capture value, but today people buy it because it goes up and it is not as transparent as other assets. Good luck. Like any emerging asset, it is fancy. Place toot to be the be transparent, open, and to be a part of this. Heavy seen any big pickups so far . Bigave their been any pickups so far . We are waiting for the data to generate. We have been surprised. Here and there, there are some minor loopholes where are they systematic internalizes . This is where it will be needed because i am not sure of the intent were clearly implemented in the way it is evolving today. These are nominal adjustments. Overall, it has a permanent change for the better and the regulators are doing a good job to absorb it. They are getting ready to get the best from the european trading. Next eaking with your euro nnet. Vonnie it is time now for our stock of the hour. One of the worst is Harley Davidson today. It is down after the Fourth Quarter results. Abigail doolittle joins us. they beat sales, but they were disappointed at the forecast here they are forecasting another decline for motorcycle shipment. If we go to the bloomberg we can see how ugly this is. This is a link within the Bloomberg Intelligence area of analysis on Harley Davidson. This is 2014, and we see global shipment of motorcycles dropping and dropping. Now they are forecasting that the global shipments will come in somewhere between 231000 and 236,000 motorcycles 231000 and 236,000 motorcycles. It has to do with millennials. They are not into writing motorcycles. Vonnie it seems like it was like that for a while and then there was a turnaround. What happened . bengoa morgan Abigail Morgan stanley is still optimistic. The decline has not debated in sales. To the stock, while some investors and analysts are hoping for a turnaround, if we hop back into the bloomberg, we will see a big piece. Stockte, we have the where we see a bumpy downtrend. We see shares have been trying to climb out of november. Short interest at a record high at about 18 sibley getting this right. They had it right that the global shipments of motorcycles were hovering in terms of demand for motorcycles. Vonnie definitely people getting out here. Thank you abigail for our stock of the hour. Mark time for the Bloomberg Business flash. Mark fourthquarter earnings better than expected. The drugmaker pursued a revenue forecast to lose midpoint was higher than average estimates and pfizer estimates it will take 15 billion for foreign profits. Service to be rolled out using driverless cars. The company says it but thousands of minivans to make that happen. The company is not saying exactly how many vehicles are involved or the cost. That is the latest Bloomberg Business flash. Of the it is battle charts time. Coming, investments of the highest since march we have charts next. This is bloomberg. Vonnie secretary treasury mnuchin speaking they are at the annual review. He says bitcoin can become the newest was bank account. That was in response from a question from a senator from south dakota. It is time for our global battle of the chart and we look daily at some of the most telling charts and what they mean for investors. You can access the charts on the bloomberg at the bottom of your screen. Off, is danis burger. Using data, i have three different risk assets for you. They would indicate some bullishness. These are the euro dollar ultralong debt and vix. These are short positions on all of the spirit they are all at records from the last reporting. Ultralong debt is doing well. That is a bearish sign that a short position has built up quite bearish as well. That goes for the vix. Things are starting to reverse. This is a lot of positioning on here that can turn and the ugly for the markets. G 689. E is at vonnie a snapshot of things we dont often look at. Mark without we would get a look at euro against highgrade companies that reached a six point six year high. We need to look at investment bond yields as a p they have moved up on speculation that the ecb will drawback stimulus. That is the highline. The low line is the 10 year bond yield. T is up 10 basis points it is at 83 , heading for the biggest month since june. We have seen bonds rise across the globe partially because of what the ecb is expected to do this year. Where 10 year bond yields jumping 25 basis points in january. A big move yesterday, surpassing zero for the First Time Since 2015. What is interesting is the ecb is not an debt, corporate purchases have limited the rise in investment yields. Spreads have it narrowed it to the lowest in more than a decade. The central bank has maintained its corporate buying this month. One other aspect of the bond market, high yields in euros are up i five basis points. By five basis points. This is partly because high yield was lagging in the early credit market rally because of concerns over steinhoff. It is important to keep an eye on the Investment Grade bond all thes we are looking time at the u. S. 10 year and german tenyear. It is something a little different today. Vonnie fantastic work. Give tiesllowed to anymore, i will have to dig deep and, for a winner. Burger. Winner is dani thank you both. Todayeuropean equities finish the tuesday session with four days of decline. That is the losing run. We use our phones and computers the same way these days. So why do we pay to have a phone connected when were already paying for internet . Shouldnt it all just be one thing . Thats why Xfinity Mobile comes with your internet. You can get 5 lines of talk and text included at no extra cost. So all you pay for is data. Choose by the gig or unlimited. And now, get a 200 prepaid card when you buy an iphone. Its a new kind of network designed to save you money. Call, visit, or go to xfnitymobile. Com. Mark im mark crumpton. President trump will release a abuses in surveillance in people surrounding the president. He has as many as five days to review the document for National Security concerns. Vladimir putin says the treasury from the u. S. Move with ties to him harms relations between the two countries. Speaking at a Campaign Event in moscow, the russian president declined to escalate the situation saying the whole world will breathe a sigh of relief if they see the two Largest Nuclear states are building their relations in a modern way with respect to each other. The European Unions top environment official is warning several companies that they face legal action if they continue to ignore the air quality standards. Speaking in brussels today, the commissioner said some countries have still not met deadlines that were set for 2005 and 2010. It has consequ