stoxx 600 yesterday down the most in a month. u.s. p 500 slowed in the asia on track for its third weekly decline. fear in the equity markets. clearly there is concern. $1.4 trillion wiped off in the month of september. not nice coming back from your holidays to swallow that. if you are short, might have a smile on your hand. u.s. data, that seems to be what is concerning us. gdp figures coming in today for the united states. final numbers could be up 4.6% in the second quarter. that means more interest rate rises to come quicker. stimulus hope for in europe and japan. start seizinghey foreign assets? that is what is being worried about. could we see a change in the japanese pension fund? that is driving the yen lower. currently we see the japanese yen -- the dollar is climbing versus the yen at the moment. the yen weakening to near a six-year low because of the nation's $1.2 trillion pension fund. could be buying more overseas assets. meanwhile, let's have a look at the dollar. as i said, u.s. data just strong. we see gdp come in pretty good. factories pumping capital goods orders up. we have also the unemployment figures continuing to look pretty good. jobless claims climbing. it is helping drive the dollar higher. meanwhile, let's have a look at the euro. money coming out of the euro a little bit today. 1.2741. cautiousness to end this week if we are looking at equities. money flowing into the havens. have we turned a bit of a corner? the bloomberg global developed sovereign bond index. first weekly gain this month. we have seen a selloff in bonds in the united states because of that stimulus but may be the yields are looking more attractive now. we are seeing yields down for the u.k., money flowing into germany once again. sub-1% on the 10 year. money finding that haven. let's look into some of the individual movers. we are expecting a big move. della currently not open. looks like as much as 10% on the open. butlatively small company prince most of the money you have in your wallet right now across the world. they say the markets are not looking so good. 0.11% -- 0.7%. it is mainly because nike is killing it. --tever use of his him euphemism you want to use, nike saw profits up. ,e are seeing that fuel adidas competitor to nike. continue., cautions concerns about all the strikes going on in france. we have a number on it coming from the french press saying it could cost 250 million euros for air france. >> great walks, caroline. that is the market open in europe. ftse 100 down by about 0.1%. what is behind the losses? he is the investment director at london capital where he happens to oversee more than $4 billion in assets. you get a down day of around 2%. you scramble for a reason as to why we are lower. what are you blaming? >> i think the markets are no longer cheap. at the margin, you had a whole set of negatives. all the bombing that is now accelerating in the middle east. really, the fundamental point is that if you look at what happened to europe, there is a .eed for more action sanctions are still on a downward trajectory. something similar happening in japan. everything we have done to date has not improved still. inflation still not getting to their 2% target. there are more actions to be taken by japan. you look at the biggest emerging market, china. the data is on the softer side. a little bit confusing. sometimes you get better data. the underlying trend, i like to visit a consumption, things like that, not very helpful. with japan and china, there is going to be -- on the other asian countries. we need a bit more help to get them on a firmer footing. >> you help manage money. have you been active really do -- activelyve three reducing any of your longs? >> [indiscernible] we have been concentrated on the safest part of the equity markets, the global multinationals. they have been away from the small-cap stocks. we are already on a capital preservation mode for the last few months. we have been sheltered because we are anticipating the increase in market volatility. >> how concerned are you about germany? consumer confidence trending lower. you can blame russia and the ukraine but it is clear in the numbers that the demand from the eurozone is not getting higher. expect more competitive pressure for germany. they have had deflation. has been closing down. overall, part of europe is slowing and germany has been the power engine. >> stay with us. let's check in on the equity markets. equities opening a little bit lower. the ftse opening zero point 1% lower. -- 0.1% lower. big mover, de la rue. why are they so much lower? down the most since 2008. it is about market conditions. we will talk more about it after the break. stay with us. ♪ >> welcome back. this is "on the move." we stream on everything. online, on your phone, apple tv and amazon fire tv. let's talk about stocks. equities, undervalued or are we in a bubble? it is the bull and bear debate that rages between economic heavyweights on bloomberg tv. we spoke to the former budget director under u.s. president ronald reagan. stockman says central banks have created a bubble which has ruined financial markets. >> i am fired up about the financial bubble that has been created by the rogue central bank that we have at the fed and central banks all over the world. monumentally in a financial fantasy that has been building for most of the century. much more timeot in front of us before this whole thing comes undone. you can't increase the balance sheet of the central banks at this rate and expect that you are going to have financial markets that are healthy and stable. these markets are really ruined. they are crippled. they are driven entirely by the liquidity from central bank injections. >> i disagree strongly with david. i have been saying for the last several years that the stock market is not in a bubble. up, wecause it has gone had the worst bear market it 75 years, we are getting towards fair value. how could you call the stock market bubble when it is selling at 16.5 times this year's earnings, less than 15 times projected 2015 earnings. these are very close to historical standards. in a historical standards low interest rate environment. how can you call that a bubble? we have headwinds from all over the world. japan is an old-age colonnade. a house of cards that is going to come unraveled. europe is sinking into a stupor of socialist fiscal and economic crisis. put all those things together and i say history is irrelevant from the period before the year 2000. >> if you enjoyed that, that is just some of the highlights. let's try and put this in perspective here in europe. joining me now is ashok shah. let's pretend i throw you into that debate. who is calling you in? >> i am in the middle. markets are fairly valued but slightly expensive. in some places, markets are may be slightly expensive because they are discounting the qe that is going to, early next year. anticipation of more liquidity in the system. we need to focus on what the corporate earnings growth is going to be. you are talking about nominal gdp around 5% to 6% and in europe, much less. the corporate earnings growth normally is related to nominal gdp. i think the u.s. corporate earnings growth expectations are being tempered down from the beginning of the year two around 5% or 6%. as long as we have a corporate positive earnings projected market, the markets are fairly place. -- there is a lot of speculation. volatility has come back to quickly. >> you are saying european equities are expensive. i thought was interesting for london capital is, no exposure to financials. the ecb saying they are going to do asset-backed security purchases. why don't you like financials? >> the simple reason is that the total size is just too large. they have continued to into greece -- to increase tier one capital. means the risk capital needs to be increased. it implies that the rate of return on capital is going to continue to come down. that the middle of the balance sheet probably is where you need to concentrate. the debt is going to be more and more secure. we can talk about central-bank policy for the next 2, 3, 4, 56 hours. let's talk about a certainty in your mind. i have heard this for several years now. how do i play it? >> what is clear is that this trend has been established for a while and is going to get worse before legislation comes in. in the meantime, the companies that are able to come into this field and have a few companies who already have lots of good products out there, i think it is a trend which is going to develop for quite some time. globally, it is a situation which is getting worse. companies that focus on dealing with obesity, i think they can have a very good rate of return on capital. a great place to concentrate in terms of getting exposure. >> just to change the conversation, next week is very busy. eurozone inflation as well as the ecb meeting. what i want to talk about is whether the ecb can get that balance sheet up. how do they do it? >> it is not going to happen in a harry. the best they can do with the asset purchase program is less than half of the 400 trillion euros. q1 whento wait until deflation is much nearer to zero and they will be forced to start doing the qe. if you look at the underlying interest rates in terms of the qe and all that, you are still running very tight monetary policies relative to the u.s. we consider the growth differential is favorable to the u.s. because the ecb hasn't done enough. >> very quickly, european equities, back end of the year, higher or lower from here? markets are all about discounting the future in terms of how fast the qe it is going to come. a lot of the good news is already in. i would have thought we are more than fairly priced for the short term. typically, the short-term holders of this are going to be coming out of this rather than buying extra at the margin. we expect a downward trajectory for now. >> ashok shah, we covered everything. thanks for joining us this morning. as we head to the break, check out shares of della roux. down by over 20%. the stock is getting crushed. they say market conditions are difficult. if you are wondering how a company that specializes in the supply of cash has such a bad time, it is about passports, this trend moving to eat passports. -- moving to e-passports. stock down almost 25%. the most since 2008. we will talk about another stock. air france. talks with protesting pilots resume. will they resolve the worst strike since the 1970's? or is more turbulence to come? excuse the pun. "on the move" is back in two. stay with us. ♪ >> welcome back to "on the move ." i and jonathan ferro. time to bring you up to speed. lloyds banking group is selling 151 million pounds of shares just three-month after taking the company public. the move will cut lloyd's' stake. they are shedding assets to comply with rules after billiong a 25 pound bailout. new rules mean that providers including google, facebook and visa will have to rent servers from russian providers like mega fund. de la rue, stock is down over 20% this morning. the company has cut its full-year forecast, weakening trading conditions. the money printing company says orders have been disappointing as prices and margins have fallen. de la rue is forecasting difficult conditions to continue. one company that has had its best data in a particularly rough week is tesco. shares the lowest in a decade on the information that first half forecasts were down. has suspended executives and rushed in a replacement cfo. we have now learned that the previous cfo had pretty much no oversight on the period in question. he had no say over the past six months on the job. now standard & poor's may cut the credit rating to junk. cfo alan lewis and new have a monumental task ahead of them when it comes to restoring tesco. if you want the number, the stock over the last five days is down 16.5%. 3 billion pounds wiped off the value of that company in five trading days. tough day for tesco. air france have offered to back down on the expansion of the low-cost unit. curry lundgren joins us now for the latest. what are the developments. the bottom line, they get what they want? >> the board came out with a statement backing the ceo of air france. the board is saying the pilots needs to get back to work and understand that expanding the discount unit had to happen under terms that will make it a truly low-cost operation. on the flipside, you have the sky team pilot alliance that represents all the sky team pilots, they have backed the air france pilots. both sides are definitely having vocal support outside negotiations. >> what are these pilots worried about? >> europe, which is what the whole plan that has been scrapped -- air france is still talking about expanding in france and the netherlands. the pilots are still worried about that. they are worried that there is a .ap on the size of air france they are worried that if you expand that, the contracts and the terms and conditions could be worse for air france pilots as well. >> every day this company is losing money. they can't expand their budget airline. the question we have asked every day still remains. what does air france do once they back down? >> it is really tough. this situation, what they are to compete, they need a discount unit. they need to make their short-haul operations competitive. the pilots are not making that possible. >> people with money waking up this morning thinking, i am not going to scotland with air france. i want to fly ryanair. how am i getting there? >> one option is to go by private jet. i have been doing a story about people that are pooling to fly private jets together. they are flying on a service called victor, sort of like the expedia for private jets. it gets them up in the morning. they will be coming back in the evening. if you can afford 1800 pounds, it is a good deal for a private jet ar -- private jet. >> thank you very much, kari lundgren. why gold mayhour, be dragging down the big sport companies. stay with us for that. here are two pairs we are watching. dollar-yen, 108.93. euro-dollar, 1.2748. withll bring you the why derek holt penny. he has some big calls on where those currencies go from here. stay with us. ♪ >> welcome back to "on the move ." you know what time it is. 30 minutes into your trading day. this is how things are shaping up. ftse 100 right about session lows. the dax down in frankfurt. more losses. the losses are piling up. german consumer confidence matches that of german business confidence. it had south. plenty of concerns. what can the ecb do about that? hang with me for five minutes. we will talk to derek halpenny about that. >> is their money and printing money? you would think there was but profitability is not there. the biggest printer of bank notes in the world, de la rue, up -- off by 25%. conditions are getting tougher. trading conditions weekend. lower prices for currency pricing overall. they are saying it is becoming less profit of oil. -- less profitable. rue one of thea biggest losers in europe. balfour beatty, another u.k. stock but on the upside. deutsche bank says it is a bit overdone. we think it is trying to get into this stock. .hey upgraded to a buy look, it is pretty attractive when you are looking at valuations. the implied valuation is just not there. the construction business, negative. they managed to sell their u.s. unit. they say that is a positive as well. meanwhile, air france doesn't get any better. they are continuing to strike. we are seeing it off by almost 3%. local press saying this will cost air france 250 million euros. they are racing through 20 million euros per day. back to you. >> i am still trying to digest de la rue. i don't know how a company can't make big money printing money. anyway, here are bloomberg's top headlines. david cameron will tell parliament this morning that islamic state extremists pose a direct threat to the u.k. they recalled an emergency wrote on whether to join u.s. airstrikes. according to an official, british strikes may start within days. ukrainian president poroshenko says the worst of the war with pro-russian separatists is over. ukraine is now focusing on the elections, securing gas supplies and preparing a bid for eu membership. japanese inflation slows more than expected last month. consumer prices rose from a year ago. that undershot the 3.2 prediction by economists. the bank of japan estimates that when you strip out the affect of the april sales tax increase, inflation was just 1.1%. let's stay on japan and focus on the future of the yen. our next guest says that while the government is starting to express concern over yen depreciation, the yen is still likely to weaken further. derek halpenny, head of european global markets research at bank of tokyo. great to have you here. let's start with your calls. euro-dollar, 1.20 next year. dollar-yen, 1.15. let's talk about the dollar. how fundamental is a strong dollar in your story? >> we are pretty much taking both the euro-dollar and dollar-yen forecasts -- the dollar is the key here. of course, the expectation in the market is that we are going to see rate and beginning around next year. the scope of the short end of the curve is considerable. pricing,on market there is that substantial gap. that gap is probably not as big as what the dots are telling us. the voters next year are different from last week. >> and the hawks are and voting next year. >> absolutely. lockhart was an interesting one. he is not as easily pigeonholed as some of the other presidents. his comments yesterday would suggest that he is leaning more towards a little bit later than the middle of next year. some of the other presidents seem to be that way as well. the idea that we are going with the middle of next year is perhaps not correct. the scale of dollar appreciation we had of late, there is some prospect for that reversing to some degree. thebroader picture is dollar gains further. 1.20, the euro to fall to mario draghi is talking about getting that balance sheet up. i put this question to a guest earlier. doesn't seem to be much appetite. how does he do it? certainly, if they are disappointing in september than it is going to be difficult. it is going to increase the climbers. september wasin not just about the abs market. the assumption was that the asset buying was irrelevant. the covered bond market is 2.8 trillion euros. there is scope therefore adjustment of the asset buying program itself to be pretty large. trade,he yen side of the you said to me that the government is showing concerns about the depreciation in yen. should they act on those concerns? >> absolutely not. that is why the yen continues to weaken. government concerns lack credibility when you have the boj doing what it is doing. it is really considerable. secondly, another element that is going to become a feature of far more important about expressing concerns about the speed of yen depreciation. one is the reallocation of assets. you are talking perhaps ¥20 trillion over a period of time. also, more importantly perhaps is the behavior of life insurance companies. japanese life insurance companies have approximately 600 billion of foreign security assets. if you have a slight alteration in the hedge ratios -- as u.s. ratios start to move higher, hedging becomes more expensive. life insurance companies tend to reduce the degree of hedging. that involves dollar by yang and that could be a -- buying and that could be a considerable flow. >> we talked about the flow. if pension funds start pulling money out, what happens to bond yields? they are getting a significant negative return. are we going to see a gradual rise? pension fundsl, in japan have been divesting. i would imagine that will continue. market isst, the jgb dead when you have what the boj is doing. to make anyifficult kind of predictions on yields based on fundamentals. gradually, you should guess if abenomics is successful you are going to get higher yields. one of the important elements of reduce the is to risks of the japanese banking sector. that of course diminishes the risk of a negative impact on the balance sheet of japanese banks as yields start to rise. >> just quickly before we go, we have 1.20 on your-dollar, 1.15 on dollar-yen. a strong dollar part of this. what would you sell against the dollar? what stands out for us and what we think will outperform are the two currencies that you would say are linked to the united states. one is the canadian dollar and the second would be the mexican peso. the peso is getting hit more than we anticipated at the moment. we would expect those currencies to rise versus the dollar. on a trade rated basis, those are two currencies that should outperform given the fact that both have exports into the united states of around 80%. in mexico we also have the energy reform. that should result in increased foreign direct inflows into mexico. the peso should do pretty well. >> thanks very much for joining us, derek halpenny. teesxt, as the ryder cup off in scotland, we look at the business of golf and why it is becoming a rough patch. plenty to talk about. stay with us. ♪ >> welcome back. this is "on the move." where there is golf there is usually business. in scotland it is big business. one of those is donald trump. tom gibson reports. >> scottish golf is meant to be tough. this course looks fairly wild. strong winds, no. visible weather, not today. aberdeen,es away from the u.k. oil capital, donald trump's two-year-old course is a traditional links on the surface. looking past the sunshine, there are a few other nods toward america. for one, size matters. they usually use between 150 and 200 acres. we have over 600. >> service is high on the agenda too. >> especially if you miss the snack guard. americanquite an design. they can order some food and get back. sand dunes and a vast fairways mean there isn't much chance being bothered by other golfers either. >> it feels like the golfers are on their own. they won't realize there is another 100 yards. >> making the course memorable was key. in these parts, he is competing with world leaders. it is more than just a vanity project. the golf industry in scotland generated nearly $2 billion in 2011 unlike in the u.s. where the game has been in recession. mf and scotland to play is increasing. rise20, it is expected to to $500 million. while green fees are on the steep side, the course isn't exclusive. it relies on those visiting the either by tour bus or helicopter. >> over time we are likely to of all into something of a hybrid with a membership option. at the moment, the pay to play aspect is working extremely well. are working with travel agents across the world. all that travel is too exhausting, visitors can stay in the trump suite just a few meters from the course. there is the option to buy a bit more of the brand trump. tom gibson, bloomberg. >> let's keep the conversation on golf. may be driving scotland but the sport is struggling in the united states where demand has been falling. optimistic and has a long-term deal with the world number one player. rory mcilroy. the ryder cup tees off today. is nike right to be long golf? let's bring in caroline hyde. should they be? >> they have the two key players. just won two majors. he has a really big presence on social media. more than half a million likes on facebook. nowhere near as much as tiger woods, more than 3 million likes. they are doing it for golf. 12% of all nike sales goes on athlete endorsements and advertising. they feel getting these big figures help. not so much with the actual sales of golf. they are doing much better than adidas. looking at nike earnings yesterday, they were stellar. golf was the one area that didn't see growth in terms of that unit. they say they are optimistic in terms of the overall pedigree. they are unveiling more products. -- someone send me a link to golf world. >> he loves his golf. >> he is trying out a new club. >> sounds awesome. >> limited edition, sold out recently. they are trying to back the winners when it comes to golf. that is what the numbers have been winning. >> a lot of this is focused on line, isn't it? >> that is half the reason they got so front and center in terms of the world cup. you are getting one billion eyeballs, 300 million people that play football. social media, nike kills it. they are getting a 70% increase in online sales. that is what we saw in recent numbers. they actually have a stellar increase in terms of 37 million facebook likes for nike football. they also have runners as well. you have the nike cross training club app. downloaded 17 million times. these numbers almost seem frivolous to say million this, million that. a lot of people are downloading their app. they want to push that. they want to go the e-commerce way. they want to get the consumer. that is the way they want to invigorate. up 20% for nike. >>adidas would love that. stock down 33% year to date. let's bring you some companies on the move. liverpool football team among seven that could face sanctions for breaching financial fair play regulations aimed at curbing losses. provide regulators with more information on why losses were in excess of the 45 million euro limit over two seasons. de la rue shares are down over 20% this morning. the company has cut its full-year profit forecast by 20 million pounds citing weakening trading conditions. the money printing company says that prices and margins have fallen. de la rue is forecasting difficult conditions to continue into 2016. stock down 25% as we speak. the internet has been vulnerable to a bug for 20 years and governments are finally starting to pay attention. the u.s. department of homeland security is warning about the so-called shellshocked bug. hans's joins us from berlin on the threat. talk to me about this bug. i don't know much about it. how worried should i be? >> according to the u.s. government, you should be worried. late last night, in the states, osxe said that their operating system is not vulnerable unless users have reconfigured some of the basic security settings. here is the issue. to the back door of your internet security. what it does, this is basically the source code for unix systems. they figure out a way to use that code to get into the back door. here is what the government said, they are aware of an ability affecting operating --tems such as linux we will be back later to talk about this more. that is a clear message to administrators. they need to fix this. there is an update available. you just have to download it. >> quickly, how different is this from the heartbeat bug? where usersd was like you and me were tricked into getting a new password. vulnerability on the backside of the system. something administrators really need to fix. heartbleed was more about the user. this is more about the infrastructure. it is going to be -- ideal apartments are going to have a big weekend. >> lucky them. i will be watching the golf match. let's check on european equities. we opened up lower on the ftse 100. ftse 100 down by 0.1%. we have the dax down a little bit. we will talk the markets after the break. stay with us. ♪ >> welcome back to "on the move ." i am jonathan ferro. 8:54 which means i am almost ready for the weekend. guy johnson, what have you got on "the pulse?" >> big week for air france. we have a couple of guests talking to us about that. what happens next at this airline? something thaty could be the end of air france as we know it? that is that story. it has been a big week for the airlines. still no end insight. let's talk about golf. europe is up, last time i checked a couple minutes ago. business used to get done on the golf course. doesn't anymore. can you really justify four hours, five hours for 18 holes? nine holes are the new 18 but is it enough to rescue golf? a lot of people used to play this game. looking at the numbers last night, mcilroy has a new golf club. >> a new driver as well. >> so we are talking air france and golf. and we will talk a bit about markets which seem to be stabilizing. >> the ftse 100 down 3% on the week. >> today, signs of stabilization. >> the worst week since may 2012. big losses. no big rebounds. a classic case of blame everything. >> i believe it is. >> golf, big week. as we take a break, a picture of the markets. european equities have stayed low for the most parts. down on the week by over 3%. we are not out of the woods. plenty to talk about. if you want to talk to me on twitter, you know where i am. stay with us. guy johnson is up with "the pulse." he is not just going to talk pure business. he is going to talk about the business of golf. happy friday. enjoy your weekend. ♪ >> stocks stabilize. investors exit panic mode and buyers tentatively returned to the markets. turbulence continues at air france. shares slide as the pilot strike enters its 12th day. security flawed. they scramble to deal with the shellshocked loophole. good morning, everybody. it is friday. this is "the pulse." we

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