from the fed chair. have a look at european equities, under 30 minutes left in the friday session. we are rising today. look at the equity gainers today, greece up 2.5%. belgium up 1.6%. do yesterday were chinese exports slumped the most since february, pushing risk appetite lower. factory is about inflation rising for the first time in almost five years. this is sterling. this is pound-dollar. ons is pound-dollar 2016, schedule for our second weekly drop amid brexit concerns. mark carney is touring the country. deutsche bank, you can see it there. germany's biggest lender forecast a decline to 1.15. bank of america, based on its current rates of decline sister lynn will drop to 1.05 by the end of next year -- sterling will drop to 1.05 by the end of next year. inflation expectations increased . this is the 10 year, the expectations for inflation over the next 10 years. when you look at the difference between a 10 year bond and inflation linked debt, what is fascinating is it comes on the back of yesterday's story about marmite gate, a spat between unilever and tesco and it is feeding into input prices. they are rising. can retailers afford to pass their model or will they allow it to dent the top line? all these inflation questions being asked today. mark carney was touring the u.k. earlier and he says inflation can overshoot the bank of england's 2% target. that is what investors are talking about today, to what extent will the bank of england allow inflation to overshoot its target. the ecb is buying corporate everett bonds. one of the big -- corporate government bonds. isn't it running out of bonds to buy? some are below the deposit rate. one is atp, down by .42% which ecb,the question of the what can it do in markets, credit markets is coming to an end. so many questions and so little time to answer them. let's get over to julie hyman with the latest. julie: maybe the ecb can start buying marmite is part of quantitative easing. the u.s. averages are holding pretty well even in the weaker than estimated consumer confidence, falling to its lower -- lowest level in over a year. all three averages holding on to gains, and it is a broad-based rally. we have three groups in the red at this point, utilities, energy, and real estate but other than that, a swath of green with tech and materials leaving the game. are the big corporate story as we got earnings out from jpmorgan that beat estimates, citigroup coming out and beating estimates, and wells fargo for that matter. wells fargo has turned lower asset calls and jpmorgan barely hanging on to a gain, interesting giving the fact -- given the fact that the numbers look better than broadly estimated. i want to look at the fixed income trading revenue within jpmorgan, we have seen that as a trend among the banks, day and citigroup both reporting big gains. the year-over-year gain in fixed income trading revenue, up 48%, 35% at citigroup. banks, away from the looking at what is going on in the bond market. janet yellen is speaking in boston this afternoon. ahead of that, the two year yield unchanged, a bump up on the longer end of the curve and yields. we will see how this progresses. we will be watching the bond market very closely as we hear from chair yellen. vonnie: thank you. let's check in on the bloomberg first word news. courtney: the u.k.'s exit negotiations with the eu will be controlled by a select group of 12 ministers from theresa may's cabinet. that is according to unpublished documents obtained by bloomberg. it could be another sign that p.m. is planning a clean break from the union. members of the cabinet include boris johnson. nicola sturgeon says she will publish a draft of the scottish ,eferendum bill next week saying she is threatening to if --up england -- u.k. some republican donors are calling on the republican national committee to disavow donald trump according to the says thetimes, which donors believe allegations of sexual misconduct are expected to inflict lasting damage on the party. donald trump reportedly plans to blame mexican billionaire carlos slim for groping allegations against him. trump will say that slim, a donor to the clinton foundation has an interest in aiding clinton's campaign. the times published an article with two women accusing trump of inappropriate touching. he denied the claims. global news 24 hours a day, powered by our 2600 journalists and analysts in more than 120 countries. i am courtney donohoe. equities rising in london for the first time in four days, mining shares taking the lead. china's factory gain prices rose for the first time since 2012. the ftse still heading for a drop. says u.k. yields are screamingly cheap. mike, thanks for joining us. this is a lovely short. ftse 250, and the ftse local u.k. index, most of those majority, basically a of their earnings come from the u.k. ftse, from overseas. it is roughly 50/50. u.k.tse up 100 by 5%, the centric inditex down 10%. at u.k. you look equities on a cyclically adjusted basis, adjusted for inflation, they look very cheap and the reason is because earnings have already undergone extremely fast. earnings are the low point of the cycle and that suggests that the reason is predominantly because of the weakness you have seen and commodity market over the past few years. think the oil prices will be going higher and you will see a stabilization and other commodities, and that will help earnings or cover. chart tell the story as well? this is the ftse dividend yield, the 10 year yield. 1.1%. definitely. u.k. equities, particularly if you look at the large cap space, but very attractive from a dividend perspective. a 4% yield, you compare that with a government bond at 1.1%. clearly you are getting extra income from taking the risk and u.k. equities. equities areonment low and people will look to earn income and the only way they can do that is getting exposed to equities. bloomberg has an exclusive story out showing that theresa may's picks for brexit negotiations, the top negotiators are all for hard brexit. with this cause you to have any sort of other concerns about british stocks were stocks based in london? mike: we think a hard brexit is definitely going to be bad for the u.k. domestic economy. it argues quite strongly i think for favoring those large cap u.k. companies, where the majority of their revenues come from outside the u.k. when the domestic economy weakens and the pound weakens, there are exporters who are benefiting from having that weakness. vonnie: what do you say to clients who say, i am concerned about it getting weaker and getting weaker quickly. what are they doing? mike: if you look at sterling against the dollar relative to a long-term purchasing power parity fair value, it already looks pretty cheap so it is more than two standard deviations cheap relative to that long-term purchasing power value. of howes make a question much further sterling has to fall from these levels. perhaps we have seen the majority of that move already. mark: i was just saying at the top of the hour about the sterling forecast. deutsche bank saying 1.15 by the end of the year. bank of america is saying we could go to the record low 1.05 by the end of next year. d think that is sounding a little too bearish? mike: it is possible but it seems unlikely. realistic ands you could even see 1.15 with a push. mark: before inflation expectations for the break even. mark carney telling us today in nottingham they are doing their tour of the country, that the bank of england is willing to look through inflation. but then can overshoot market does not believe him because the expectations for further loosening this year are very slim. economists say we will still see further loosening. how does the bank cope? mike: they should look through it because clearly, the fall in sterling is reflecting the weakness of the u.k. economy is likely to experience as a result of a hard brexit. to raise rates or to not stimulate further i think would be the wrong thing. if anything they need to do more stimulus given the weakness of the u.k. economy. it will become more apparent once the implications of a hard brexit play out. even the0 year break has been rising very sharply, suggesting the r.b.i. over the next 10 years is going to average close to 10%. that seems unlikely when you barry in mind there is a good probability that we will get a recession, almost a certainty that you will get a recession. it is going to put downward pressure on inflation globally and adding that the temporary temporary, i think it is unlikely that inflation will be that high for that long. mark: mike dell, global strategist at j.p. morgan asset management. vonnie: in ohio, p them is campaigning for hillary clinton. ispresident obama campaigning for hillary clinton. this is bloomberg. ♪ mark: live from london, i am mark barton counting you down to the european close. 15 minutes away. vonnie: from bloomberg world headquarters in new york, i am vonnie quinn. i want to turn to erik schatzker has been listening in on that earnings call. for wells fargo. : it seems like the opportunity for this to turn into high drama has come and gone. the new ceo and cfo appeared to have succeeded in preventing this conference call from becoming the kind of debacle we saw at the senate banking committee or the house financial services committee when the former ceo john stumpf was testifying. on this call, these executives have been calm, their tone has been measured, not defensive which was something we saw from stumpf. the have taken cover under board investigation into the sales practices that produced those fake checking and credit card accounts. shearman ins hired sterling to conduct the investigation and as a result they are saying there is not much they can comment on. to the degree that they can say anything or whether it is within their purview to say anything, the answer has mostly been yes, our costs are going to increase as we have to hire more people for compliance and risk. we expect that might be in a range of tens of millions of dollars per year but we cannot forecast what our litigation reserves are and what kind of an impact it will have on our business long-term. part of the reason is these are depend on the firm for continued access to financials and guidance. they do not have the kind of bully pulpit that senators on the banking committee tonight. minnesota getting stumpf foret at john the impact on customers. there is no drama, there are no fireworks like that. $.23 butstock is down it is a 44 and a half dollar stock so it is a minimal decline. reporting earnings that ever so slightly beat expectations for the past quarter. everything being talked about is looking ahead and we are not getting much of a sense of what lies in store for wells fargo. vonnie: erik, thank you. you can follow along the earnings call with our commentary from our reporters and analysts. you can click and follow on. mark: 4:18 london, 11:18 new york. the prime minister's honeymoon period seems to be over as she tries to get written out of the eu. we will have the latest with the u.s. president, the barack obama. this is bloomberg. ♪ vonnie: live from london and new york, i am vonnie quinn. mark: i am mark barton, this is european close on bloomberg markets. nine minutes to go into the end of the session. prime minister theresa may is getting a harsh reality check. she forced a parliamentary vote and says she is meaning to trigger it on her own. .imon kennedy joins us theresa may's honeymoon over? simon: possibly. she had a tough week and she has had a pretty good three months in the job. she got the job as a coronation by standing still while everyone else rode around her. to theek, on the road brexit she had to bow to parliamentary pressure to give them a say and perhaps ultimately a vote on her brexit plan. she had the courts that you spoke to, banks threatening to leave london. nicola sturgeon talking about a possible referendum, all these add up. mark: there are going to be weeks like this in the next few years. meanwhile, a committee of 12 has been set up that will negotiate all matters brexit. it is the divide of the committee, the set up the has caught our attention. simon: it is the composition. a lot of brexiteers, hard brexit people. andrea leadsom, a challenger to the prime minister. people like boris johnson. be a hard brexit? is certainly suggestive this is a panel dominated by people who lead to the hard end of the spectrum. the scottish secretary, that question of whether that ends up being left off the table, no place for londoners. there has been some pressure on the london mayor for a committee but it is the competent -- composition that is diverse. vonnie: cable did not move all that much. it is weaker a little bit but we are still just under $1.22 to the market was not anticipating her group would be made up of hardliners. ison: i feel the market starting to tune into hard brexit. the pound is becoming a bit of a barometer of how much she can achieve on the hard side of the equation. the pound is down when hard brexit hits the headlines and in the when sand gets wheels as it did with the court case and parliamentary hearing. vonnie: even gilt yields are climbing. sort of the opposite reaction you would anticipate. investors must be ok with this. simon: i am not sure the gilt yield is necessary. the inflationary risks like we saw yesterday with the so-called marmite episode, the gilt yields are reacting to this idea that the brexit could ultimately me higher inflation. mark: he says they are going to overlook it. simon: i think weight -- they will try to side with trying to protect growth. mark: another story which is fascinating with bankers, who do they go to, to vent their frustration? there is a lot of departments out there, aren't they? simon: this is a big issue across the city of london. bloomberg noting that a lot of bankers are saying they do not and who to call. when they call the department they are told, you need the department of cell and so. downing street says you should come and talk to us. a lot of confusion and communication issues. it is another thing that the banks are starting to feel a bit offended when it comes to brexit. they already feel that theresa may is not ranking them high enough or prioritizing their issues when she talks about immigration or access to the single market. if there continues to be this lack of clarity they might start exercising their contingency plans. mark: simon kennedy, bloomberg's brexit editor. 4:25, five minutes away from the friday close. he started the week with gains and it looks like we will end with gains. yesterday was about china, today is about china, two different stories. 600, we werero going into the possibility with a third week of decline. it could come to an end. this is bloomberg. ♪ here in london with vonnie quinn in stockton. every industry group rising. there it is up 1.5 percent. weekly gain after two weeks of losses. still down in october. china dictating markets. risk assets rising, because we had the increase in factory price inflation. china no longer exporting deflation. biggest rise since 2009. this is the biggest publicly traded hedge fund. acid growth beating estimates. it also announced m&a today. and announced a share buyback of $100 million. 2% lower, falling on concerned it is a $43 billion changeover by china. china planning to merge -- the hold of andrnment to prices paid this according to be clear with the assets. entering the final stages of the completion. shares down by 2%. to raise as much as $14 billion of capital impasses. the chief executive pushed to shore up its finances. shares are up by 2%. to avoid being forced into sales of ecb capital requirements on areas. seeking to build up capital and requirements, which are being compounded by the bank's complex structure across 17 european countries. 2%, this has absolutely been hammered in 2016. the i'm gone straight to dollar index as a way of looking at what is going on in the markets. looking at similar levels. the yen is weaker. i thought we would have a look at that. it is strengthening once again today. he has succeeded the crook -- succeeded the throne. yields are still higher. let's take a look at the broader u.s. markets. the industrial average is up 4/10 of 1%. not so many gains in the s&p 500. let's go to the nasdaq in midtown manhattan. rebound. looking at a today's rally is starting to fade. now up to tenths of 1% just over the last couple of minutes. this could be part of that. is higher,nasdaq this is all about the chips. we are seeing a big rebound. is --long is saying he both should be boosted by positive catalysts. including improving demand among others. the big chip winner is amd advanced devices. reaching a deal with alibaba to have amd graphic chips in alibaba cloud services. this could really mean a big comeback for this company. dominated by intel. you take a look at bte. this is a two-year chart to really give perspective to the big run-up. of amd back above the 50 day moving average. recently they have begun to we have congestion here. sometimes that breaks out to the upside. >> what else is trading higher? >> we have a nice pocket of strength. all higher. citing positive industry trends among other factors. andrew sees more upside to the stocks. all of these are up more than 20% this year. but more upside ahead. >> abigail doolittle. let's check in on bloomberg first word news. >> the national hurricane center says nicole is moving eastward over the north atlantic. the british territory tries to recover from the category three storm. 115 miles per hour east overnight. government offices are closed but the islands international airports are expected to reopen. italy holds a referendum on a key constitutional change. italians will vote on constitutional changes to limit the power of the senate. with the economy stagnating and only limited improvements, he has his work cut out for winning over the voters. quit if thehe will reforms aimed at streamlining the government is rejected. the u.s. will remain the most important partner for the philippines, even as they improve ties with china. in the philippines he says has a special relationship ties have been strained since he took taught -- took office, calling out -- hillary clinton and donald trump are locked in a tight battle. clinton tops trump but clinton led trump by seven points last month. gary johnson gets 11%. clinton leads trump 46 to 31%. both candidates have high unfavorable ratings. the obama administration is easing additional strength should -- additional sanctions against cuba. the administration is also lifting limits on cargo ship travel between the u.s. and cuba and easing restrictions on the ability of u.s. and cuban researchers to conduct joint medical research. global news 24 hours per day powered by more than 2600 journalists and analysts. this is bloomberg. >> two key pieces of economic bea, janet yellen will making a speech here in boston to break it all down for us. she is a u.s. economist for bloomberg television's -- bloomberg intelligence. >> i think it will be a chance for her to reinforce market expectations for the december rate hike. groundworkvide some to understand what to expect going beyond december we need to start focusing more on the pace of monitoring beyond the december meeting, which seems to be well priced in. >> as you say december is looking more and more likely. we may start to see real i thinks in the fed? >> the committee is still there and they are very much behind chair yellen. i think everything will depend on how the economy will evolve going forward. labor markets is going to be key. in onail sales came platforms. and michigan sentiment. what does this tell us about the economy? >> it was a big rebound in the , the lesson the control group. it was probably a little bit too little and too late. going into the third quarter of the year. we saw i followed performance in consumer spending. we may see some moderation going into the third quarter. that doesn't mean we are going to see some moderation in gdp growth. we should see acceleration. >> can the economy withstand a hike in december. >> it seems to be priced into the markets. defense --e kind of kind of event that can prevent them from growing. >> the ecb gathers next week. five letters will dominate proceedings. what is draghi going to say about the ecb? >> i think he will definitely be grilled on that retort. think this will be a very eventful meeting next week. i think they will need to wait until december to act. it european economies think will extend the qe program in december. them tobe easier for justify the extension of the qe program. >> thank you for joining us. younis -- senior u.s. economist for bloomberg intelligence. bloomberg will have live coverage of janet yellen's speech in boston today. eastern,ns at 1:30 6:30 p.m. london time. next, a conference about innovation taking place. we will bring you an exclusive interview with bmb parry by's ceo. mark: live from london in new york, this is the european close to read time now -- close. time now for the biggest business stories in the news right now. othersstanley anted up -- to advice a potential merger with cvs. revive viacom, struggling with ratings declines. goldman sachs is one of the better lawsuits -- it could cost about $1.2 billion. a $16 billion libyan investment wealth fund sued the investment bankers, saying it was led into signing derivative deals it never properly understood. there is no evidence goldman had excessive profits on any of the contested deals. citigroup posted third-quarter profits. rate and theest current ratings. citigroup and its rivals have spent two years waiting for the end of a fixed income trading slump. that is the latest bloomberg business flash. the first edition of hello tomorrow sponsored by bloomberg began in paris today. executives, investors, and academics. sat down witha the bnp paribas chief executive, who talked about how all banks have to be closer to technology. guest: we have a very diversified model. with third parties, partners, retailers, the energy sector. exposed to technical newcomers. -- it is the variety of the .cosystem >> what does that mean for the industry? should the banking industry be more technologically focused? will that mean the difference between the winners and losers? >> no choice, you have to be closer. >> it is the way we live our life, lead our life? >> you need to understand better your customer. you have to be good at that. >> how do you speak to the millennials? 20-year-olds. the have different expectations what they want from their banks. have specialized entry points for those guys. special platforms, they are running out of time. they will never visit the bank physically. it is a totally different approach. forhat does that mean again the european sector. does it have an impact? approachan type of will have to concentrate. this is the old industry. you will have to move to digital distance. you can change rapidly. adapt. >> you spent a lot of time with innovation. it seems the u.s. would do differently. you have an idea. >> one of the weakness is you do not have an integrated european market. because of local legislation, because of languages. you you are in the u.s. have the ecosystem, you can leverage the u.s.. -- when are europe you you are in europe it is much more difficult. >> that was an exclusive interview with the b&b para boss from the hello tomorrow summit. happening right now president obama is campaigning for democratic presidential nominee hillary clinton at the rally in cleveland ohio. he is reiterating his confidence in clinton and criticizing republican rival donald trump, saying trump plans to drag the election as low as it can go. you can watch full remarks. the time you have been waiting for, our global battle of the charts where we take a look at the telling charts of the day. cannot voice axis these charts by running the function featured on the bottom of your screen. kicking things off is matt of our federal reserve team. consumere new data on inflation. low inll to a record data going all the way back to the 1970's. expectation is fairly well anchored. i have charted against the blue line, which is the five-year forward breakeven inflation rate. for a long time people work discounting the drop on that line because people assumed it to be risk premiums and financial markets. arecan see households starting to catch down to markets in terms of the inflation outlook. fed whoeat time for the is trying to raise rates later this year. >> inflation expectations are even declining. they survey the every man on the street. inflation expectations are pretty low. mark barton also has a great chart. it has been a difficult week for samsung after its 7oduction of the note smartphone. once upon a time the south perfect,nglomerate was how could it be perceived as perfect? a raiset 2011 we had from j.p. morgan chase. every single analyst racing -- analysts rating. it was perfect. bloomberg has a scale of five points, three for a hold. rating hasnalyst scored above apple as this chart showed. just a month after it announced 2009,artphone in nevertheless there is always a nevertheless in my battle of the charts. gains in this entire period from 2009. seveng shares fell boyd .9%. i looked at the wonderful anr function. that is 87%. a 12 month price target tells us the 22% upside for apple, 44 analysts have a buy rating. what a wonderful story. perfectwas perceived as by the analysts. >> once upon a time it was considered pretty perfect by the consumers. i really did like your performance and your charts. seeing as you and me are pretty , i think it unison we should both decide that matt is the winner. we are not allowed to do a friday tie anymore. coming up later today, fed chair a keynoteen delivers speech at 1:30 new york time. don't miss our live coverage of the event. today, wells fargo's john shre will bend -- john on. mark: take a look at the friday session, it was a day of gains. a week of gains. 5 p.m. in london and midnight on hong kong. i am vonnie quinn. welcome to bloomberg markets. we are covering stories from new york to bangkok and beijing. a busy morning for bank earnings. beating profit estimates. jpmorgan beating estimates on bond payment. a major source of stress. and it is the oldest among us who are suffering the most. puck.ak with wolfgang first a check on the markets. >> not as much green. we rally much more strongly earlier in the day. it looks like some of the gains are dissipating. the university of michigan coum

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