Is the nonmanufacturing or services portion of the economy that is by far the biggest. Economicore strong data adding to the jobs reports. That was not good news for stocks. We saw on increased in bond yields. The first one i want you to look at here is the 10 year yield, which remains unchanged after the latest numbers came out. Holding at the highest since january of 2014 and up one basis point this morning. Seeing little change holding atd market, but the selloff is indeed continuing. The downward momentum continued around the globe in the early night session and then selling continued into the u. S. Session as well. We have got groups on the move. Financials the worst performers and energy, which as a group fell 4 on friday, down 1 today as we have got negative earnings continuing. The selloff is not quite as broad as it was friday but nonetheless, pretty broad with real estate in the green. You talk about banks today, you have got to talk but wells fargo on the news and late friday, the Federal Reserve will not allow the bank to grow and improve practices. 400 million in profit this year and it is raising concerns about regulation more broadly of the banking industry. Other bank stocks are trading lower. Wells fargo itself down by nearly 8 . Broad risk off environment, one of the casualties we have been speaking about his bitcoin. Bitcoin is down again today, its biggest fiveday drop now in three years time. The various equity bitcoin proxies are all trading lower. Not just the fringe ones that we talk about that truck bitcoin or blockchain into a statement and then end up moving with bitcoin, but some of the more stylish come overstock. Com, they are also trading lower. Mark a similar story here. Down for a sixth consecutive day. Since september 26, 2000 16. Earlier when we were down 1. 6 , we are near that now by a decline of 1. 5 , every Industry Group on a stoxx 600s down. The biggest twoday decline since july of 2016. We have fallen by 2. 7 in the last couple of days. Friday ended with the biggest weekly fall since 2016 as well. It gives you an idea of where we have been in the past couple of days. This is our volatility index, also rising for a sixth consecutive day, longest stretch since april 2017. Since april 2017. Index,ek, a jump in the the biggest since august, december 16. They close at the record low of 10. 67. Brexit, that was just before the french election. Levelsnot close to those of heightened volatility. Good to keep everything in perspective. We are down for a second day oner closing for the dollar thursday. Hedge funds and Money Managers are boosting net long positions of the euro to just below 140,000 contracts on the weekend. Genworth 30th according to data. That is highest gone back to january 1999. Currencies surging more than 3 in january, versus the dollar boosted by speculation the ecb will follow the fed impairing stimulus and raising rates. We talked about stocks and currencies. The bond market as stocks decline, bonds rising. Bond yields inclining. This is the german benchmark down 73 basis points on friday or we rose to the highest level since september of 2015 in the last couple of weeks, that put everything in perspective. The yield has shot up by 20 basis points. The outward moving core yields with the trade in recent weeks has been an upper one upward one. 2. 5 e moore contest down friday, right now down three quarters of 1 . Lets bring a chief equity strategist for bloomberg intelligence. How concerned should we be . Are there a number of days where we decide this is a prolonged selloff . A good question. If you look at the broader context, this is a selloff from an extraordinary rally and it is difficult to gauge where you should find it land. Every selloff we have had has landed around the 50 Day Moving Average on the s p 500. It bit of support there, and then persisted in its upward trend level. The bad news is it is all the way down in the s p 500, which would extend the correction to about a 5. 5 level. It feels awful relative to the last year where we never had anything more than 3 but the equity market in the u. S. , we tend to have an average 10 correction every nine months historically. 5. 5 is not awful. It just feels rough considering where we have been. Vonnie is it earnings related or fear for the stock market . My opinion is it is a lot more about earnings. Hint that perhaps inflation could become problematic for margins. Most of that is with industrials, and the consumer space, we will hear about rising wages and what will mean for margins going forward. If inflation were a big problem for the equity market, we will see an Energy Stocks leaving. They are not shown you that inflation is really a big problem. I think it is more about earnings and if you look at last week, what happened . We started off with news that amazon is getting into the health care space. That took on the health care sector. We have had negative news, marginally out of the tech sector. Tax reform had really boosted most of the rest of the sectors on the s p 500 for the rest of the year. Tech companies took charges and are not as optimistic about the outcome of tax reform. Energy companies missed expectations, guided for a little less growth going forward. Deflation withf respect to the earnings outlook. It does not mean earnings arent still supportive. Really strong Earnings Growth but considering where we have been, consistent upward him a consistent with respect to tax reform. I think that is reflected. Mark has it gone of the a noted that the 10 year yield may have improved outlooks for stocks . A think it is one of the things we are not paying any attention to her the yield curve has become more upward sloping in the last several weeks. The back up in the long end of the curve is effectively eliminating one of the risks of stocks, a potential inversion of the yield curve at least in the short run. A modest widening interior and 10 year treasuries and historically, we have looked for an inversion between twoyear and 10 year treasuries as a leading indicator of negative outcomes going forward. Any widening in the yield spread the outlook for Earnings Growth going forward, that is reality of what we have been in in the last three weeks. Mark i was just talking about the stocks. What does this breakout in the vix and stocks tell us . When you look at the vix broadly, we are approaching 20 on the vix. Above 23 times in 2016 p we reached an average of 25 on the vix several times during a Massive Equity market rally of 2013. I think this is another story of context. We have not seen a story like this in more than a year pier 1 wonder what it might mean but in the scheme of things, you can have big arises in the context of a longerterm uptrend and stocks and it is not necessarily indications of major risk off in the equity market. We have got to get to 3540 on the vix before we have massive correction in the u. S. Equity market that per exceeds 10 . Vonnie he thinks it will be orderly and that maybe caught me and made me catch my breath. Do you think this will be a disorderly slide and momentum will pick up . We are grappling with it and i think it is a matter of perspective. It feels disorderly because the last are has been so anonymously orderly. You have seen broad declines in the equity market and that is one of the areas of risk that i think is underappreciated. There is pretty much no escaping this. The sectors look very weak. I think investors are keying off he is now the fed chair and has been sworn in. He is putting a video on the website. Is very consistent with how we communicate as a culture now. Maybe it is the new wave of communication. The fed cuts have been consistent with communication methods becoming much more communicative, much more guidance. So video may be in may be the new way. Vonnie gina. Lets check in on the first word news with taylor. Taylor Jerome Powell has been sworn in us chairman of the Federal Reserve, who replaces janet yellen, reappointed by President Trump for a second term. He outlined his goals in a video message. Today, unemployment is low, the economy is growing, inflation is low. We will support continued economic growth, a healthy job market, and price stability. A see also promised better to medication with the public. Two senators in washington will introduce a plan aimed at dreamers who face deportation. John mccain would grant the dreamers permanent legal status. This would also increase security on the border with mexico but it would not pay for the law that President Trump wants. American troops have started to pull out of iraq. According to the associated press, the drawdown comes following the declaration of victory over Islamic State last year. The u. S. Army says the american president presence in iraq will be based on conditions there. In germany, there is an indication that on what merkel maybe close to a deal on the Coalition Government with democrats. Went anddate came and merkel is allowing time for negotiations. Democrats are holding out for concessions on labor rules and health care. Im taylor riggs. This is bloomberg. Mark thanks. Coming up, top strategist at hsbc explains why the dollar is grizzly but it is not a bear. This is bloomberg. Vonnie lets focus on currencies. Hsbc passes u. S. Head of fx strategy. 89. 5, have we seen the rise in yields. Countries andher the dollar weakening, how does that work . Yields go off and that respective currency could go up. This is breaking down for a while, but really the correlations between those two elements of the market have been weakening for three or four months. The change of the dig it at the be any of this year is that the u. S. Administration shift focus, it is not something we have looked at for a decade or more. It meant the dollar became, is a trade deficit the needs rectifying. The cyclical aspect captured in the bond yields you mentioned got relegated to the background. The dollar could behave independently of the yields. We can see the ebb and flow but for now, the link between the yield on the dollar will remain relatively weak. Your outlookchange at all, and today, 110. Yes, we are not immune to the processes. A dollar higher, which is premuch where we are at from 120 previously. The overall story for the dollar though is we do not think 2018 will be a terribly exciting year for the dollar. Most of what the fed will do is in the price. No great drama we expect to come from the dollaryen, we have a yearend forecast so there is a pretty persistent strengthening of the end that we believe will extend. It is a pretty big move from here. It feels that way. But think is because we are used to it not doing very much and we have gone all the way to 125 and 126. Is interesting because it is happening him not necessarily against a weak equity market here. About the exit from the boj among other factors. Saw nigeria and egypt, frontier market, really. Emdering about the impact of more than Frontier Markets of this dollar weakness. It has been helpful in the context of the currency strengthening and keeping inflation under control. Obviously, it has been a big boost to the flows we have seen an emerging markets to capitalize on that strength. When we think about em currencies, we normally look for three global elements to be in place. Benign china story and relatively benign and helpful commodities backdrop. All of those are in play at the moment and that is why we have seen it do well with some exceptions. Most cart for the most part, flows have been strong which reflects confidence for these currencies. Mark with the euro dollar 125 at the end of the year, if you are correct, what does that do on the ecb intentions front when it comes to taking the pedal this year . A think they will breathe sigh of relief if we are right, which of course we will be. A shared vision i suspect that the ecb at the moment is that they do not want a stronger euro. Dubs will say a stronger euro keeps us further away from the inflation target that we already have doubts about the the hawks will say that means we will have yet more qe, a more prolonged time of negative interest rates. Both in the parties interest for the ecb to talk the euro lower and at least prevent it from rising. Big sigh ofe is a relief and we can begin the normalized process on the rates fund. On thehe big Event Central bank front is the boe quarterly inflation report. Expectations brought forward and when the bank will raise rates, some suggest it could happen as soon as may. Services pmi has made people rethink. It is a difficult task on thursday. What is the message from the governor . I do not mention him. He mentioned services today. All of those levels of growth, 0. 3 rather than 0. 4 and. 5 in terms of gdp q1 q. What we will try to do is put the bank in a holding pattern. Looking toward a may hike, the upcoming meeting, i do not see why he will pin himself down. E is a skilled central banker he is warned by the data. Few layer on top the fiscal insurgency within the u. K. And the Brexit Process as well, and i think you really dont want to give to for too much Forward Guidance in case things happen in the interim. Should we be seller rating celebrating small signs, particularly the wage growth number . It depends what you are holding, buying, or selling. Thesense that it suggests Global Economy is behaving that they are just showing creeping signs of wage you have to think globally but out be cautious about drawing too much inference from this one months data. Generally, they still some seem to be suppressing which growth. Australia and skadden scandinavia. We typically argue inflation will remain relatively contained in subdued so we would not get too excited about last fridays wage growth. Im sure others will take greater solace from it. We have to leave it there. I know you are not watching the superbowl so much as six nations. On saturday. Which was interesting coming in. Head of fx strategy there with us. Mark still on both sides. The england game coming to a crux in a few months. Coming up here, on side of the atlantic, we have got the nasdaq turning positive. Dow jones is a little lower. Stoxx 600 down on the day. The nasdaq is in the green. Not as bad as it looks a little earlier. This is bloomberg. Mark a look at some of the business stories it doesnt in the news right now. But would the Biggest Technology deal be ever . Chipmakers raised around 121 billion in cash and stock. This one. Will review consolidation, trading has fallen that fled industry executives to consider consolidation. To getto obtain again the repost 66 billion takeover, the German Company says it is off a very significant concession for eu regulators. Pushed that is your latest Bloomberg Business flash. Vonnie . Hour from theone u. S. Trading session. Looks like there is nothing left to see here. Down three quarters of 1 on the s p 500. You can see the energy index there. Financials are very poor again today. Retail. Under pressure like never before. And its connected technology thats moving companies forward fast. Ecommerce. Real time inventory. Virtual changing rooms. Thats why retailers rely on comcast business to deliver consistent Network Speed across multiple locations. Every corporate office, warehouse and store near or far covered. Leaving every competitor, threat and challenge outmaneuvered. Comcast business outmaneuver. Founders fund. I am max in new york. You can follow me and get the latest updates at ticktock. Vonnie that is one of our highlights on bloomberg streaming live on twitter. I am vonnie quinn. Mark live from london, i mark is just Bloomberg Markets. Taylor riggs has more from new york. Taylor President Trump us started on twitter today for top democrat of the house Intelligence Committee. One of the biggest leakers in we must be he says stopped or highly critical of President Trump during the fight over the controversial republican memo. Markets Led Companies to the most workers since the turn of the century. Your expansion health pick up in trade and ultralow borrowing costs. Opec decides to us limits on output, the country poses oil minister can raise daily production by at least 100,000 barrels within five or six days. Opec and producers such as pressure meet in june to decide whether oil prices are high enough. And in south korea, samsungs electronics air is free to leave is in a most a year after he was detained in a bribery scandal. A high court put him on probation for four years. Caught in a corruption probe that block down the former south korean president. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. I am taylor riggs. This is bloomberg. Mark volatility, stocks are off their lows. The s p was down just over 1 . Check it out. T is down the nasdaq is rising. The dow jones is down by about one third of 1 . Is all the fuss over . To the you put it down last couple of days. This is the six day. News. It is excellent normalize is is what im looking for here. Stock markets are understandable. With the qe, everything went up. I think it is normalization showing their finally moving and it means bond yields should be higher and it does not mean stocks will have to selloff. Piece,said in his gadfly you write joint get slide piece, the 10 year yield is 2. 5 , barely a flesh wound. Do you share his view . Yes. I read a piece that said europe is different and japan is different in the u. S. We very much agreed the call is something which, look, it could be a lot worse, down 3 . Mark weiser different . It has a strong currency rather than a week currency. It has a central bank that does not like the fact that its currency is too strong. As opposed to the Federal Reserve it does not really give the fed is taking it away, the ecb is still adding into it. Probably includes december before it even touches its negative for your rates. It is a different Central Banks having different things. As much as the u. S. , that is why the Federal Reserve will hike three or four times