Have we mentioned that . It is quite cold. That number is perhaps the largest surprise here within these numbers. In terms of initial reaction in crude oil price, a little bit of a leg lower. 25 goingup about into this. It quickly pared that gained by about half, now bouncing around within that range. Im looking at the bloomberg. You see one tick down to unchanged but now bouncing around as traders try to figure out what to make of this. That big drop on the headline number, 7. 4 million barrels. A build in both gasoline and distillates. Vonnie nuc refinery utilization and and you see that refinery utilization was up, as well. Lets get reaction from alix steel. Alix, a little bit of a surprise here. Alix yeah, that distillate number is really confusing. I wonder if that means we imported some distillates somewhere and that is why we see a build. On the surface, we should have had a big drop. Imports were down, so that will help crude storage. Crude storage will be lower because of that. A big difference between wti and brent prices, it is difficult to import more of the oil. Crude production was up by 28,000 barrels of oil a day, so that is interesting because we had a substantial rally in oil last week. That we are at 61, do production numbers start climbing higher . What happens in six to 12 months . Wa up to now, it crude and net gas inventories have been dropping off a little bit. Explain this chart. Alix this is a wider taken terms of inventories. The top line is natural gas inventories. The yellow line is the fiveyear average, the simple average. We have declined quite a bit, but were still sort of not breaching that fiveyear level yet. The bottom panel is oil, well off the highs of the inventories we have seen, close to that fiveyour average, as well. The question became, what winds up happening with this storm . Will we draw faster and be tighter in the market . For the level with oil, it is interesting that natural gas inventories were only drawn by feet 206 billion cubic last week because the estimated number was 220 billion. Number, three times the average what we normally see this time of year. With oil and wti at multiyear highs, do shale producers ramp up drilling now . Alix that is the question. If i was a shale producer if i was a shale producer my would be like, this is cool. It was said that 61 to 65 is a sweet spot. A lot of the producers were hedged and 50 or 51, so this kind of rally will not mean much to them. But there are a few, like continental, they do not believe in hedging. 71 for oil, and he would be looking out at 61 a barrel. We will not know the answer until the next three to four months play out. Vonnie talk about natural gas. We got inventories or storage, rather, which was a major feetown, 206 billion cubic. Alix it was a miss is still huge. Typically, the fiveyear average poll is 91 million cubic feet. Much isural gas, so going to heating that if you need for electricity or other uses, you are seeing some switching to get to oil. You are seeing a Strong Demand pull for both areas. You also see a substantial power price shift, but not as high as you would have thought. If you look at pjm power prices, the head of big surge last week that are well off the highs of that. That is a puzzle for many Market Participants, including why natural gas is on at three dollars and not six dollars like we saw in 2014. Vonnie and we have a chart of that. The contract is off its peak. Alix pjm power prices, that is northeast power prices. So the conversation is potentially traders and Market Participants were so aggressively bullish coming into the cold snap that they were a little bit to aggressive, and the reality did not live up to it. In terms of prices coming of major long positions in wti and brent, which can explain some weakness, as well. Vonnie alix, thank you. That is bloombergs alix steel. Back to markets. Julie hyman is checking the rest of the markets. Nesse a lot of bullish remaining is all three major averages again rise to records today. A strong start to 2018 with now three straight updates. The dow is the outperform or today, rising above 25,000 for the first time. Optimism is such that it is actually the highest in seven years. Oforganization does a survey bullish participants, newsletter writers, other Market Participants, and the like. If you look at the bloomberg, we have the most bullish minus the most bearish, and that is that he sevenyear high. We see bearish participants dropped to a three have in your low. This is looked at as a contrarian indicator. The last time we saw a peak like this, four month later the s p 500 rolled over. I want to run through some of the performers today. Financials are doing well broadly. One Main Holdings in particular after apollo and another group agreed to buy fortress stake in one main. Of ae seeing shares desktop 24 were seeing shares of the 24 . Dominos pizza was upgraded by oppenheimer and Credit Suisse on optimism for sales this year. Ofis health, Raymond James grading that stock even after is that earnings would be at the low end of estimates cvs health. The market ist not pricing in the aetna acquisition being good for the company. The 22 minutes left of thursday session. Stocks are jumping today. There is a secret most upswing in global equities. The second day of gains, best front for almost a month, biggest rise for almost two weeks for the stoxx 600. The currencies are rising. Bond yields, commodities, and cds. Lets talk Economic Activity in the euro area accelerating to the fastest pace in almost seven years. Services surging while factories benefited from booming domestic demand, record growth and export orders. This is the composition pmi, which is rising to 58. 1 in december from 57. 5 the month earlier, beefing expectations be a growth momentum was the strongest in ireland. France coming second. Activity in germany reached its highest level animal seven years. It u. K. House prices will barely gain this year after slowing markedly in 2017. That is according to nationwide building society. Property rights inflation of about 1 . In 2016, prices jumped by 4. 5 . Inflation squeeze, brexit uncertainty. London, the weakest region for the First Time Since 2004. The first annual decline for london in eight years. Events in theher united states, i thought we would look at snowrelated stocks, those companies in europe who might be exposed to what is happening in the united states. Ashted up. Construction Equipment Rental company has revenue in the u. S. And could see demand for rentals and storm repairs. There are also several grocery chains. That. thank you for lets get bloomberg first word news. build is the worst storm for the winter for the east coast. It is definitely bad out there, making life miserable for travelers are blizzard warnings from North Carolina to maine. Boston could get 14 inches of snow, and manhattan make it up to nine inches. Thousands of flights have been canceled. Flights haveaid been temporarily suspended appeared President Trump is to send a delegation that includes family went members to the Winter Olympics in south korea. Officials say the president agreed with the south korean president on the phone that they would not hold annual military drills during the olympics. Another development in that story of the white house the heine scenes book that let President Trump to denounce former strategists steve bannon. One of the president s lawyers is trying to stop publication of the book written by michael wolff. Lawyers have accused steve bannon of reaching a confidentiality agreement. Legal marijuana in the u. S. Is facing a new hurdle. The ap is reporting that attorney general Jeff Sessions obamaerang the policy that enabled states to wrigley the drug. States to regulate the drug. Day,l news 24 hours a powered by more than 2700 journalists and analysts in more than 120 countries. I am courtney donohoe. Mark coming up, new year, new rules the biggest shakeup in european markets in a decade. How are markets managing with it . We will speak with a guest. This is bloomberg. Vonnie live from bloomberg World Headquarters in new york, i am vonnie quinn. Mark and from london, i am mark martin, counting you down to the european close. Out with the old, in with mifid ii. The fallout, market liquidity trading on europes biggest exchanges, down about 30 from the 30 have a day average. It may be a oneoff as traders test the waters. Is joining us. Thanks for joining it is it too early to assess the impact of mifid ii on markets . I think it probably is. This is something that people operating in your, our colleagues in europe you have been working on for the last couple of years to get ready for. It is a massive piece of legislation affecting european markets. I think we need to see how it goes through, not just over the next few days, but the next few months, and certainly over the next year. I know you were talking about the fact that the european authorities are going to have to look back. In the u. S. Perspective, because of the extraterritorial nature of many parts of mifid, were thing for that the fcc, led by chairman clayton, took steps to make sure that crossborder execution would not be in conflict with u. S. Law when it or theo things like ats unbundling of research. From the u. S. Perspective so far, we have been able to handle the impact of this. Issues are your members bringing up . I know youre working closely with your members on the implementation of mifid ii. What are the biggest hurdles . The first of topic things from a u. S. Perspective was with the requirement of unbundling and research costs, where we did not want to be in conflict with u. S. Laws. Relief for 30 months, so it is something we will have to watch going forward. That allows research to continue to be provided to clients, which we think is very important. Second is the granting of. S. Ats, thefor u share trading. That was accomplished for about 30 ats in the u. S. We have not had problems with dual listing of shares in the u. S. And europe. On the legal entity identifier, again, you cannot trade without having an lei. I think that is less of a problem for the u. S. Than other jurisdictions, but those are things were watching closely. Lastly, as we move towards brexit, we will want to watch closely how europe decides to move forward with their thirdparty equivalents on a goingforward basis at vonnie what have you been hearing from your members obviously, members include everybody from Money Managers the banks am a brokerages, some winners and some losers in this new era, right . Conceivably, and probably more so in europe than in the u. S. , although many of our numbers are big operators in both jurisdictions. So i think we going to have to see how this plays out. As we were leading up to the go live date for mifid ii, and discussions i have been in the folks at the European Commission and with our members, i think the European Commission was looking and saying we are going to have to step back and come back and take a look at this, and they have already talked about 2019 and looking at the impact. This is such a massive piece of legislation. While the european markets are different than the u. S. Markets, concernller, there is a that all of this could have negative consequences on an ongoing basis with respect to liquidity. Not so much winners and losers as much as the terms of the execution of services for clients. Vonnie i would like to ask more domesticoriented questions for a minute. President trump talking about rolling back some regulations. How has that been affecting the financial industry in general as we close out 2017 and into 2018 . What are the main concerns . I think with the Trump Administration has done through the work at the treasury department, preparing these reports and looking at financial rules and regulations, it has been quite deliberate and down the middle of the road. There are a lot of things looking back at the various rules put in place since the financial crisis that need to be recalibrated. I see it more of a recalibration. In some cases, this is similar to what their colleagues in europe and asia are talking about. It is a gradual process, something we will see as the new seats. Ors take their they will be looking to say, are the rules adopted accomplishing the goals we want to be accomplished at this time, and what is the impact on Economic Growth . Do we need to adjust the dial to make them better and not for stall Economic Growth potential . Vonnie our thanks to convince and, sifma president. Ofomberg lp has a range services for firms comply to mifid ii. Mark we are heading to the close of trading in europe. Autos,00 gaining, energy, and gas. This is bloomberg. Mark live from Bloomberg European headquarters in london, i am mark barton. The european close is eight minutes away. On end from new york, i am vonnie from new york, i am vonnie quinn. Resident donald trump said this would alter the future of the middle is potentially President Trump said this would eventually alter the future of the middle east. I officiallymp recognize jerusalem as the capital of israel. Vonnie since then, the idea of a two state solution for the israelis and palestinians has been waning. Now the likely successor to Benjamin Netanyahu says the idea is over. Wehner,us is david joining us from tel aviv. Talk about the successor to netanyahu. He seems to be more hawkish. Is that how the israeli and is tending . He speaks much like most of the members of netanyahus party. And in mind, the government place right now is a rightwing government, so anything could happen. It is certainly true that the israeli voter in general has moved to the right in recent years. Quite a big segment of the public is not very receptive to a peace deal with the palestinians at the moment. Calling for he is stop trying to create a fresh palestinian state. What are his issues, and what is the approach he is suggesting . He says, look, for 25 years the International Consensus has been we can create a palestinian state alongside israel and the problems will go away. He says it is a nice idea, but in practice he says it is not very practical. He is concerned about israels security and says the estinians could eventually theres they could be turned into a haven for an Islamist Movement that could attack israels central population centers. He basically says there needs to be innovative approaches, perhaps sharing a confederacy with jordan. He thinks egypt could get n oneved, swapping land i of the most crowded places in the world. Of course, a lot of this is great for him to say, but it is not clear that anybody around the world, including arab countries that are close to israel, would embrace such an idea. Vonnie were talking about gideon saar. The palestinians should be at the table, at least according to donald trump. Is that even on the cards at this point . That the palestinians come to any peace talks table now they say they will not after the u. S. Made that announcement. It is very complicated. They have essentially said the americans are not a reliable mediator anymore. The palestinians are split between hamas and fatah and are working on reaching a deal to reconcile between them selves. Nearterm, it is not look like anything is really going to happen, especially after trumps jerusalem announcement. Vonnie our thanks to david wainer, joining us from tel aviv. Mark lets look at european markets. Three minutes away from the close. Stocks rising today, as they are across the globe. The close is a matter of minutes away. This is bloomberg. Live from bloombergs European Headquarters in london, this is the european close. Stocks finishing higher for a second day, the best run for almost a month. The biggest gain for a couple of weeks. The stoxx 600 up 9 10 of 1 . Optimism about Global Growth propelling global stocks higher, to a record on the msci all country world index. We look at sterling, ing sees the pound gaining to 1. 53. That is the green line. The analyst median estimate is for 1. 35 due to an early brexit transition deal. Driving the bank of england rate hike, that is not the only positive bank to make that call on sterling, which tops the list of buys at bank of America Merrill lynch. It will end the year roughly 3 of of its close on the day of the brexit referendum. The Bloomberg Survey forecast 1. 33 this quarter, 1. 35 for the end of the year. Putting artists are not pricing in a rate hike until february 2009. I want to talk about brent crude and emergingmarket stocks. G btv 3345, this chart shows the positive correlation between brent crude and emergingmarket stocks, and the current correlation is above the 20 year average. That is the lower half of the chart, the white line. Could pose a threat to the rally in the e. M. Gauge, which has en to the highest level india and other net importers of energy might also see a jump in expectations inflation expectations, brent rising to the highest level since december 2014. The nikkei 225, it was a spectacular day for the benchmark. Finishing up 3. 3 , the most since november 2016, the highest level since january 1991. Today was the best opening day performance for the gauge since 1996. Move also a two plus sigma impaired to the daily moves over the 20 plus year period. What happens today happens less than 5 of the time. Last year, the nikkei and the topix both rallied over 19 . 3515, im spoiled for choice today for battle of the charts. I have got a better one. Vonnie i know you do. You put in a good word already. Looking at records in the u. S. All morning long. I thought we would look at places where there is more calm and the market, and the vix is very calm. Almost below nine again on the vix. The dollar index is off of yesterdays high of 92. A little bit of calm in the bond market with the 10 year at 2. 47 . This is following the fomc meetings Meeting Minutes yesterday, and the jobs data which may or may not gear well for tomorrow. I wanted to point out the renmin