there are nonperforming loans within the banking sector. it was only five days ago that october 2014o an low. you one stock, the second worst in europe today. diy kingfisher, the biggest retailer. theprofits will come at expense of shorter-term earnings. impacting to negatively profit by 50 million in the first year and 100 million following year. they are trying to unify an operation. kingfisher, oil stocks, banks, those are the big decliners today. betty: what is that doing to german business confidence? mark: german business confidence has been dented i this selloff, this turbulence we witnessed at the start of 2016. we did see a second monthly decline in german business confidence. the decline was bigger than analysts thought. be affected by the chinese slowdown. the bank does remain confident that stocks will rise. low interest rates and falling unemployment will continue to support domestic demand. domestic demand is strong. it's interesting to see citigroup's index for the eurozone. i just. it's falling to the lowest level since july. look out for the data on friday. we are likely to see an improvement in europe. inflation could go to give in the next couple of months. inces could prompt something march. it's all back to oil. it's always back to oil, isn't it? betty: the same press in the u.s. let's head to some market with damien a sense you. >> does go back to oil. let's take a look at what happened with the markets. we are in session lows. the s&p is down. the dow is down seven -- 7/10 of a percent. is on placeitself 2009ts worst january since let's take a look at what happening with crude. at its sessiong lows. been down 4% to it hadn't down as low as 4%. this basically goes off the cliff after saudi arabia's head of ramco said they could keep loyal -- low oil experts for a very long time. the is the sector health of s&p sectors. telecommunication is the only single green on this board right -- now. most, 2%.are down the energy is down 15%. financials are down 15%. these for stocks of the top five biggest laggard on the s&p. bank of america is down 35%. five s&p.nts for ofigroup is down 3% rate banks are becoming of your concern as play cds rise. -- bank cds rise let's look at safe havens in the 10 year yield is falling to session lows. you see that drop after saudi arabia talked about royal -- oil yield is down three basis points to the yield of 2.02%. betty: let's check in with the first word news. courtney has more. courtney: we're still shoveling out here on the east coast and air travel is not back to normal. airlines of canceled or delayed another 1500 flights today. airports in new york and washington are hardest hits. now that sanctions have been listed, iran is emerging from international isolation. arrived in rome today. he is expected to find contracts with the number of companies, including airbus. extremisto shows the who carried out the progress attack committing other atrocities. they all died in the paris attack or the aftermath. some of them were seen it killing captives. in greece, this is one year in office. he is headed toward a showdown with creditors over the social security reform. he wants taxpayers to raise contributions while not cutting pensions. record warmth is almost certainly due to humans. researchers say 13 of the 15 warmest years of recorded registered through 2014. the odds of that happening national or are one in a lot. i am courtney donohoe. break, take had to a look at my terminal bid -- terminal. this is what investors think it's going to happen at this meeting. you can see on the left-hand did nobody believes there is going to be a rate increase. you would have to be drinking to think that. mark: never. it's dry january. why would i drink in january western mark -- january? in your neckbout of the woods? mark: mark carney addresses lawmakers tomorrow. the big question is will he mentioned the referendum? have spoutedakers the thousand words. referendum was mentioned only once. that leads to tomorrow and will he have to address the question of the referendum? this is the biggest risk facing the u.k. economy. ?ho better to discuss this he joins us next. ♪ mark: welcome back to "bloomberg markets." this is the european close. betty: central banks around the world are under incredible focus this week in commodity prices continue to fall. there is no sign of the floor and lots of volatility. is further stimulus warranted it? who better to ask? ands the former boe member a professor. good morning. david: it's great to chat. rally we saw at the end of last week seem to be based on the premise that the ecb and other central bankers would pop up asset prices. is that the reality? i think it's reality. it's always good news and bad news. i think the likelihood is over the last week we've realized that contrary to what the fed said in december, once again risks are to the downside and we are seeing moves on the ecb that are going to have more stimulus. last week we saw mark carney back off from his claim that i thought was silly, but a rate rise would come into focus at the end of the year. we are now learning what i said ,n december when the fed raise at the time i said i thought the 50-50 chance next move my the cap. i think a number of people are coming around to that you can downside are to the and gathering. that central banks in a full. -- tackle. they've got rates of the zero level already. we are in a new world. it's comparable to 2000 and eight, the worst. bring carney up and he was saying the rate picture in the u.k. would come into sharp relief. last week, he said now is not the time to raise interest rates. related?eserve to be david: the markets of and doing that area we have had that forward guidance that did not work. he made these silly statements time, summer or in at the this does not look like that. i think we are in a pickle right now. npc happened was the underestimated the global impact of the slowing of the world's biggest economy. mark carney has underestimated the impact of the slowing of the world's second-largest economy. he should probably stick to save other stuff rather than giving us forecast. the market does not leave him. it turns out to be wrong. we will see another forecast. that is probably going to backtrack. he is telling us everything was wonderful and it was all going to pick up. the worry is we are at a turning point downward. they failed to spot again. betty: is any central banker getting it right western mark -- right? tell his is trying to committee that stimulus ought to happen. close quite clearly between those who wanted her stimulus. they wanted more stimulus now and not later. i think the central banks don't really want to do that. they don't want to be in the position of putting in stimulus. rates are still essentially zero. they don't have much room to maneuver. they are going to be back to more quantitative easing as the authorities are helping. france, it's time to actually start loosening policy and try to create jobs. they are in a little bit of a cold. -- pickle. betty: you might want to include the set in that. banks,european central that officials will not meaningfully raise market expectations in the future. the you think that's the right move? like we have lost him. try to get that back in a moment. the former emco cto will sit down with me to talk about his new book. it's all about central banks. interview with mohammed is at 1:00 eastern time tomorrow. we'll be back. betty: have a look at some of the biggest business stories in the news. the world's biggest restaurant chain posts fourth-quarter earnings that beat estimates. sales are up 5%. they started serving apostol they at u.s. stores. -- breakfast all day at u.s. stores. it would allow johnson to move to ireland where tax rates are cheaper. shareholders will own 56% of the new merged company. losing for members of its research team. the company is trying to turn around. the stock have lost half its value in just 12 months. twitter familiar says will add two new board members to guide through the restructuring. mark: we're still here with david. staff.s a great spouted bys of than boe members in speeches. only once has the word referendum and mentioned. economists,e to they talked about it as their big concern. should the boe be addressing this more? will carney when he addresses lawmakers tomorrow be facing question of the referendum and the risk it poses? david: he's probably going to have to. it's is some evidence that been impacted your it the fears about investing in edinburgh and other things. he's going to have to do that. they have been cautious. he is been criticized for stepping on feet, talking about greenhouse gases and other things. he's had to be careful. you're going to have to see people talking about the impact brexit brings it -- growth. mark: are we ever going to see higher rates in the u.k.? march 2009 was the time they hit bottom. we are nearing the seven year anniversary area the expectations keep being pushed back and back. seen -- 2017 looking likely? voted to lower rates. i did not think they would rise for five years. markets don't think it's going to be until the middle of 2017. it's a business cycle the roles. that shock is going to hit again. i don't see rates rising in the u.k. for a really long time. set will benext more stimulus and not a rate rise. mark carney, i don't know. you certainly heard several members talking about more stimulus and not raising rates. mpc quite clear that the and the ecb rate rises around the table and they are increasingly at the fed as well. betty: we're going to have to leave it right there. thank you so much. returning to the european markets, italian starks are the most loved. they are the big losers of 2016 so far. italian banks are dragging down the shares. the finance minister of italy says the our conduct in talks with the commission on a plan to help banks offload bad debt and -- debt. >> we are working on the stream --. talks will not be stalled. we already have in place measures that will help. mark: let's bring in dan. how important is it? in: it's very important here number one, the sheer amount of bad debt that italian banks are holding, over 200 billion euros. it's clearly weighing on the economy. italy is trying to rebound from a recession. growth is still lagging. providing to start credit to businesses and households. they need to have a solution to reduce this level which is among the highest in europe. at the same time, they need to get this issue resolved. italian a banking urges still have to take place. legislationen some that the government passed to encourage m&a among the category of banks. italian banks need to clean up their books and get this issue resolved. some are we likely to see sort of m&a action between the big lenders western mark -- lenders? dan: he is the focus of m&a right now. has been making it a priority. he has been unsuccessful so far in finding earners. we've done some renewed speculation last week that there might be interest among some of europe's big banks to do a deal. , they need to find a partner because it's been bailed out twice. it has carried out capital increases. banks thatf the carrying a significant amount of deteriorating loans. betty: thank you so much. just a few minutes away from the european close. mark: what a week it's been. this is the biggest two-day gain in four years. look what happening today. it's the oil companies across europe that are leading to decline. oil continues to fall. the european closes next. neil jones joins us. ♪ bend me shape me, any way you want me as long as you love me, it's alright bend me shape me, any way you want me you've got the power, to turn on the light shape the best sleep of your life. sleep number beds with sleepiq technology adjust any way you want it. the bed that moves you. only at a sleep number store. betty: welcome back to "bloomberg markets." finishing thest day in europe. we like to blame something. mark: i love to complain about something. it is the oil market and the two-day rally has subsided. the stock markets rally has since provided -- subsided as well. this is the first weekly advance. swinger and mood the mood slayer. to an october 2014 level. kingfisher is the big decline are in europe. fisher is down 6%. it's the worst performer in europe. wilthey have come at the behestf short-term earnings. it's all about oil and those european banks. oil companies are down 1%. betty: we just heard that central bankers are losing credibility. how does that factor into the german business confidence numbers. mark: it felt for the second consecutive month. the decline was greater than they thought. they are increasingly worried about the global economy. germany is dependent on exports. we must not forget that. they are confident that exports will rise. low inflation and low unemployment will support domestic demand. later in the week, we've got cpi. week, it oneness last could go negative in the next few months because of falling oil prices. that could prompt groggy to do something in march. it always comes back to oil. betty: it does. let's check on how stocks are trading on the backs of energy prices. abigail doolittle has more from the nasdaq. abigail: stocks are trading lower at the nasdaq. we are taking look at other names. wynn resorts is one of the big winners in steve wynn is buying shares. he bought more than half a million shares last week following other big purchases. his stake is 11.6%. 60%, but it'sdone holding recently. whole foods shares were downgraded. the company may have challenges as they try to stage a turnaround. aboutock is trading down 4% over the last year. betty: thank you. let's check in with the first word news. courtney donohoe has more. courtney: we are still about the snow. the medic land is coming back to life after the lizard. the federal government is still closed today. the house canceled votes for the week. more than two feet of snow fell in some cases. nearly 12,000 flights were canceled. is -- alvania inmate death row inmate lobbied the stephen court. stephen breyer called for reevaluation of the death of the. 60 teachers protested outside a courthouse in detroit. there is a hearing to may force public school teachers to end their sickout. detroit teachers aren't happy about lope and bad working conditions. for suicide bombers attacked the town in cameron. at least 28 people were killed. 65 were wounded. thousands have been killed in a six year insurgency. a protest aimed at putting a stop that spell on refugees. showing themanikins dangers. intended foras interior ministers. they are discussing the crisis today in amsterdam. on courtney donohoe. betty: thank you so much. it's the start of another week and it appears central banks are the only game in town. it is that week in america. the bank of of japan is making waves as well this week. mark: last week, we spoke to him in office. he showed no interest in stimulus. seen change of corporate behavior. sustained, the global uncertainty and financial continues, that can thect the behavior of japanese corporate sector. mark: joining us now is neil jones. it's all about the timing. timeit just be a matter of before the doj has to do something extra? neil: i like the headlines today. it could be this week. the stock was back up. it's definitely in the cards. there are more measures this week. we had a little bit of a risk rally. we have higher asset rices. it's going to be down to the wire. net probablyng on not this week. it's just a matter of time. friday, itnot happen will happen a couple of months. that's going to have to unwind. neil: even if we don't get anything this week, it will be lower. the market is still running short. need there to be some large heads in the system. it would limit the downside. it ups the ante on qe. be a should be and will covering of long game positions ahead of us at some point. don't, we will get it in the next couple of months. betty: the bank of japan have to look at what other banks are doing. that is not their mandate. they refer to this. i want to play for you that part of the conversation. growth is disappointing. there is following the commodity prices. table evenf the april is shaky. maybe i do. -- by june. they are going to do something. that means we don't hike in march, maybe in june. move, if the boj were to that's just going to make it that much harder for the fed? neil: we could see zero from the fed. potentially this year. it's not so long ago we were looking at the potential for hikes. we could get zero on the cards. i sense this week there will be some sympathy towards development of occurred this month. there will be some hit from the fed, some bearing on the downside. out, thishtly point is the only central bank that is moving that direction. all the others i can see are appointing the other direction. that will take some of the shine off hikes this year. we may get a zero possible. betty: what would that do to the dollar? neil: initially, it will send the dollar lower. it will send the dollar lower across the board. initially, you will see a dollar selloff. zero is not priced into the market. it will put a firm back into exit -- assets. we will season interesting cross plays come into fruition. it will send some of the commodity currencies higher. sterling would benefit. dollar yen would likely go up as the ecb prepares for stimulus in march, if the feds expectations are coming back, which currency wins? neil: euro-dollar goes down. at sets will go up. we have seen that the last few years. i am confident if the fed does not hike, stock markets will fly higher overtime and that since the euro down. this pushes the euro lower. it doesn't occur in every market. it's hedged on long stock positions. the euro would go down. mark: why will sterling benefit. against the3% dollar. have you been surprised by sterling's swift 2016 it demise? neil: this is something that is and interest-rate driven. suggested otherwise and there is a good chance there will be no rate hike this year. of 2017.g at q1 i wasn't surprised given the interest-rate backdrop and the political uncertainty. brexit could go either way. of globalthe feature sentiment. it's a real financial currency. it does really well. off, thets get sold pound tends to do badly. economy, i'm not surprised giving the turmoil and pushing back interest-rate hikes and political uncertainty. just before we go, given all this turmoil and where central bank policy is going, i'm curious from your and the, which country do you think is going to be under the most pressure? will they have to give up their currency regimes? they will have to do something radical with their currencies? a major far as sovereign around the world, there is no free fluctuating currency market. generate anoal does expert case. euro is onet, the that would happily see a lower currency. the yen is a different set of circumstance. that is also a problem. sayaw headline politicians the pound is too strong. in terms of weaker currencies, i don't see many defending central banks complaining about that. it's a very different story. control see some heavy from china. much. thank you so you've been waiting for it. mat against mark. that is coming up next. ♪ betty: it is time for our most telling battle of the international chart and you can access these charts on the terminal. kicking things off is matt miller with a chart that looks like the snow that piled up. chart tells an amazing story. i am going to win this battle. we have better terminals here in the u.s. take a look at this. the crude price track lee. the blue lines here are opec's output. saudi arabia is going to capital into the wells and bring oil out of the ground. this is the department of energy forecast here in can see when theirll in 2008, opec cut output. they have done that every time there is a serious drop in the price of oil. except for now. now we see it coming down to record levels in the last 12 years. they continue to pump out more. that is interesting. that's why you've got the big fall there. the surprise element in the chart is this green line. this green line is saudi arabia's foreign exchange reserves. there has a lot of noise made that the kingdom is running out of money. that's hogwash. take a look at this. it climbs up, up, up. 700 ilion have about -- $700 billion in foreign reserves. they can afford to do this much longer. look at the price of oil. they can hold their line. that's the point. i am not talking about matt miller who used to be a stock darling when he was based in london and covered the markets. i'm talking about smaller stocks. served by 150%. is a mere 22%. win chart goes to 2009 miller was in london. this is outperformed its bigger brother every year but one. that was 2011. is it going to change? stopped by 8%. of brexgoing on? fear it. they have a greater reliance on european demand. eu, they exit the could take a hit from the u.k. economy. they've got the biggest earnings exposure to europe. five of those belong. , by 250re tempted stock. the volatility might rise as we approach the referendum. darlings, youet are in for a volatile time. think that whole presentation was during insults at matt. this is a battle of insults. i think matt is imply the your glory days were in london. matt: i think that's true. i had hair then. i'm getting messages. viewers what this chart. you can get it at home on your bloomberg. betty: the producer is telling me i've got to declare a winner. i declare mark the winner for the battle of the insults today. we need a tiebreaker. ahead, markets are in disarray with these two great charts. you guys both brought it. winter weather is airing down, the market for super yachts is going strong. we will look at the latest trends in luxury voting. ♪ mark: you're talking about super yachts. the industry has grown in recent years. 167 super yachts were delivered in 2014. what is the outlook going forward with market turmoil? joining us is devon pendleton. great to see you. untainted by this global financial market turbulence? devon pendleton it: it is. when you look at people were buying these boats, they are not affected by the day-to-day choppiness of the market. they are still feeling comfortable these days. once hot? mark: let's big on these bones? what are they asking for western mark -- four? abouts all one-upsmanship. the boats are getting bigger. they are massive. at 222s one tenet the meters. 15 united states football fields. people want to be close to the water. they want to have cool experiences. infinity is give you the illusion you're skimming along the water. one owner of a ship making company told me they installed a rolls-royce engine on a boat. it can power long at 35 miles per hour. bigger, better, fancier, more expensive. betty: where are they looking western mark warily looking for growth? growth market is china. fans, look at wealth think of all the millionaires in china. there is tons of potential. getting them is more of a challenge. much in their culture. yachting is a little unfamiliar. thatare really going after arkin. betty: thank you so much for that. you can read more about super yachts. are covering of and watches. that's it for the european close to >> it is noon in new york, 1:00 a.m. in hong kong. welcome to bloomberg markets. scarlet: from bloomberg world headquarters in new york, that afternoon. ims early two. -- i am scarlet fu. moving lowerces yet again. -- investors retching into the safety of u.s. treasuries ahead of the fed meeting this week. scarlet: mcdonald's shares rising to a record high after the easily topped analysts estimate thank you to all-day breakfast. alix: jack dorsey reshape the company and twitter share struggle near all-time lows. first, a snapshot of the market to the. inocencio and we are extending losses. crude oil that alex was just telling us about.