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 this year and the ecb will do nothing but add more money in. The s p 500 down. 2 percent now. Is it coming off and going back our moneyor im flows moving around at this point . The u. S. Stock market has been on a great tear. Parts of normalization have gotten ahead of itself. The yield curve, far too flat. Inis predicting recession the average earnings have finally moved up. Shows the economy is doing extremely well in the states. Bondction to where the yields ought to be, it is going to affect your initially but i expect european bond yields to continue to improve. Go on. Quite how much does the repricing in the u. S. Have to do with politics at this point . Even as we get a fed chairman and there are questions, how much has to do with rising debt and fresh tax ratings and so forth . I think a fair amount. Not the whole story but the tax debtms an increase in the burden that will have to be erased, quite well known for a while. Twoyear yields have been gaining but the 10 year has finally caught up and normalized. You could argue it is quite politically driven. Is ones goldilocks dying of the questions as inflation makes a comeback. The whole goldilocks goldilocks thesis, a comeback or not . I do not think so. I think she will go to her bowl of porridge. Part, they have got mario draghi with peripheral yields. Germany down 12 months. The periphery. What is the outlook for the periphery in this process . There are a few political murder hurdles . European bonds and collective thatng, it is a concept has been a study, clearly going through around in europe. The first instance they have is that more europe leads toward a banking in as well. Means there is talk that debt in , aope could shake shift backdrop of the support mechanism, like the european monetary fund. Mandate for a the new coalition, we may get more europe, which can only be great news. Mark thank you. Columnist for bloomberg gadfly. Funny another last effort to avoid a critical deadline, trying to get a deal on immigration. The latest in a live report. This is bloomberg. Mark live from london. I am mark barton. Bonnie Congress Faces another self deadline one funding runs out it tonight. Congressional actions. And, the funding extension is tied to legislation to it the socalled dreamers stay into the country. In march, the specter increasingly hangs over the debate. Oh it is difficult to see it get down to business, but they will be forced to before thursday. These see that happening . Senators john mccain, a republican, and senator chris kuhn, a democrat, releasing a statement that they are fullscreen ahead releasing a bipartisan bill on dock appear they have to address that by march 5 are reportedly deaf reportedly come on white house is not happy with the compromise on the deal. They do not feel that it goes far enough. It would bolster u. S. Security u. S. D the mexican and border and would provide there would be no deportation for the dreamers and as far as the obama era daca policies. It is very unknown whether the white house will go all in. Signs is that they will that they are skeptical. To pass a partial funding bill to avert a second Government Shutdown this year. Source telling Bloomberg News that what will likely happen is a six week extension carrying the government through march point third. Bonnie the thing is it takes us passed a march 5 deadline, which is in the deadline anyway. It is probably passed if we would take it seriously, according to laws and so forth, march 5 is the day on which people could start getting deported. What happens to a daca deal . How can the continuing resident resolution get done without it question mark senator mccain really signaling that it really is the crux of any kind of negotiation with regard to daca and now according to the basishis will be of those conversations. Clearly, it is not conservative enough for many republicans and the question becomes, will other republicans and democrats get on board . As we have been reporting, the daca issue has been an increasingly divisive issue and whether ory unknown not the bipartisan deal will be able to peel off and appease members of the far right and the far left. Mark lets talk about the memo. The house meets today to consider releasing a rebuttal to the memo. How will this play out . Coveringof controversy the retreat last week was about why republicans on the house toelligence committee voted release the new nas memo but not the democrat version of that memo . The response has been from republicans at least that it was of National Security reasons and slip and was getting scrubbed and the timeline of the scrubbing was a reason for why they had to delay the release of the democratic memo. Is increasingre pressure on the politicized house and Intelligence Committee to release all of the documents in the name of transparency. We all know over the past 72 hours how increasingly political this committee has become. Kevin. Hanks a lot, sure to tune in to bloomberg this afternoon. President trump delivers remarks on tax reform from ohio. Bonnie. Bonnie company news, vall,s trying to force qualcomm to come to the table. It has raised its bid to about 121 billion dollars all the way up from 105 billion. Qualcomm rejected the earlier proposal and says it will review this one. Joining me now is the bloomberg deals reporter. Qualcomm saying this is the final offer, an extra 15 billion. I presume it is finally the final offer. Yes. This is the final here they are not waiting to negotiate up a higher offer. Is is it enough to get to the table and the short answer seems to be no. The body language is so much that again, this is not the right kind of number. Not qualcommher or shareholders for some to the table there. They wanted to socialize a bit with investors getting come full the number. Then hopefully from the broadcom point of view, on march 6, at it is up three plus percent and qualcomm is up down. Is that an indication the deal could get done question mark this is fascinating and very unexpected. Share have been enough to get this thing done. You would like to see a deal done here but this is crucial. In the release put out this money, there is language there dowhere they say, they will the deal conditional on qualcomm not pay more than 110 per share. And xp i is already trading 120 dollars per share on the expectation a qualcomm will have to bump to release 125 and 130. Particular, all very long on xp i, confused by this, they are saying it makes them go around qualcomm. The flipside is if you speak to anyone close as i have done this morning, they say we are taking this to vote and it is something we are serious about and it is them qualcomms bluff. Appeasew does broadcom antitrust officials . Think with a lot of time and gently massaging around the fact that this is a deal that makes sense and they can get through, in addition to putting out the release this morning, they put out a q a and they say there is only one hurdle and it relates to the wifi networking hurdle. Despite the size of these two companies, it will be the biggest tech merger in history, there is not much overlap or in terms of history that makes them comparable. They have given a confident the deal about getting done and to get all Regulatory Approvals done within 12 months. They said if we dont, we will orthis whereby every month week or day after the 12 months, we will start paying you and shareholders a fee. Bonnie they own seven plus percent. Yes, a significant player in all of this. Biggestthink their position of all time. Very vocal 110 dollars per share. Very much undervalues the company. They are saying it needs to be at least 130. Talking about 140. They can really hold this up but they are now in a position themselves because qualcomm can turn off 111 per share knowing at least according to their own log logic, they will have to and so they dont and up with any. Ed. Ur thanks to mark more credit card and purchasers of cryptocurrencies. Will bitcoin break below 7000 today . The gainising above line. It is marginally lower down by 0. 01 . It is a cutback from the decline of 1 . Are not as bad as on friday. This is bloomberg. Vonnie live from new york, i am vonnie quinn. Mark this is Bloomberg Markets on bloomberg television. Bitcoin tumbling today and more credit card issuers expanding. Joining us now, he covers bitcoin for Bloomberg News. A steady stream of credit card issuers doing the same thing. Their rp are in american issuers last week came forward and said our account holders, there is no way you will use credit holders to buy bitcoin and other credit holders. We are now seeing the banks do it. Mark choose your time, choose your metric. The fall is precipitous, isnt it . Thing about how many new entrants came into the market in december. Everyone is coming out after thanksgiving and they are buying. Theres probably a lot of pain being felt. Another interesting thing developing the market is i think we are seeing the impact of the ability to short. We saw the come out in chicago, we are shortselling using other exchanges. It might be having an effect on starting the price. The shorts are catching up with the longs. Now, down 12 , seven 460 per bitcoin. On when itlity going comes to stealing bitcoin and other cryptocurrencies, does that have an impact as well . I have to think the fear is prevalent and powerful. Paradox with bitcoin. It is all about transparency. No central control, but also the mother of all black boxes. We cannot see inside the exchanges. You see headlines flashing on hacks and coins are disappearing on their press conferences in the middle of the night in japan, have billion dollars in coins mixed missing, that has to be right now. He started talking about it and talking about it in terms you cannot strategists and economists are talking about that currencies and the wave of the future . Is it growing or staying stagnant . That is a key question p or i think increasing what we see is bifurcation. On one hand, you have, you know, very prestigious economists saying look, the crypto markets story is really fraud. In the same breath, they will say there is a technological breakthrough that is quite promising and blockchain is real. Ledger technology is real. We will be able to build applications on these systems. It will be interesting to see how that tension plays on especially if they collapse in price. Mark can we show this chart . Chart. A wonderful 90 3 decline, 70 , 86, 61. Has told us bitcoin has bounced back from these declines. It has with great regularity. Mark so write it off . No. I do not think you can say this is a total crash hit. It is still up from last year. Close is next. You are watching bloomberg continue to monitor the markets for you. This is bloomberg. Mark it is 11 00 a. M. In new york and midnight in hong kong. There is 30 minutes left in the session in europe today. From bloombergs european headquarters, i am mark barton. Vonnie in new york, i am vonnie quinn. This is the european close on Bloomberg Markets. Mark here are the top stories were covering from the bloomberg and around the world. The Global Stock Selloff uses after fridays tumble. U. S. Equities erase losses and the stoxx 600 is still trading low, near it slows of the days. What the Morgan Stanley chief executive told our very own Erik Schatzker about his performance and the future of the investment bank. And we are going to find out what mario draghi is saying about europes economy as he presents his annual report to the european part. Have a look at what is happening to european equities. Ofminutes away from the end the monday session and