>> rate hikes by 2017. that's what investors are predicting in washington. the central bank president reinforced his commitment. >> we progressively cut rates going into the negative territory, so that they are now at a lower bound rates will stay low. rates.litate these >> stocks around the world selloff. falling to the lowest since 2007. fighting the ebola threat.

the u.k. joins the u.s. the world health organization warns the disease is now entrenched in west africa. for, a stork breakthrough the party with its first elected parliamentary seat. welcome to "countdown." coming up today is exclusive interview with eu commissioner. he was live from berlin. mario draghi is in washington. he is renewing his vow that he will combat deflation in the eurozone. >> we are accountable to the european people for delivering

priced stability -- price stability, which means lifting inflation from its excessively low level. we will do exactly that. >> let's get the details on what mario draghi says. good to have you on. moving markets once again. >> very interesting. to his mandate. a? above him about whether he and the ecb can hit that mandate. mark above him whether he and the ecb can hit that mandate. and reform atr the same time? he think so but he also points to the fact at a lot of the problems in europe are structural which means his hands are tied. >> because of the likes of italy and france to implement these reforms.

[no audio] mr. draghi in the other. >> there is always a clutch but i think they speak from the same area. they want italy and france to do more to loosen up the labor market. that is been a big issue for the italian prime minister this week. the question is whether they can deliver. not rise untilay 2017. if you ask a lot of people about rate hikes and 2017 -- >> rate hikes. why are we talking about rate hikes in the eurozone? >> president drug he thinks that's rather dervish, but it could be quite unrealistic as well. if europe is in a good enough state by rate hikes that's fantastic news. >> all sorts of moves this week.

>> it has been incredible. you are up 2% one-day and down 2% the next. you want to volatility here. -- want follow tillie here. we're speaking to carl icahn, who spoke yesterday and said -- sent apple an open letter to accelerate by .9% of the stock. the company s is" "dramatically undervalued." >> we have a very good relationship. things that hee can't tell other shareholders that we do have very good conversations. i think he is a very great listener. ceos, andticized many

i do believe that one of the problems in the country is that the system is dysfunctional. but you also have very good ceos and he is one of them. >> a historic day for the u.k. dependence party. it won its first elected seat in the house of commons. he recently defected for his new party in the by election held yesterday. that's puts more pressure on david cameron who has promised a referendum on eu membership by the end of 2017. travelers to the u.k. arriving wick,stric airport -- gast will now be screened for the ebola virus. specifically, they will have to fill out a questionnaire where they say who they were exposed to and where they have traveled, and some of them will

have their temperature taken. critics have been saying they can lie, and we have seen in the past that this idea, because it is usually an incubation when people are traveling and is asymptomatic, it will be very effective. out sars, people pointing that the temperature scanners they used in singapore and hong kong basically detected almost no one. these are common, and people think this is a minimum [no audio] -- prepare for the possibility of an outbreak. they were looking into the death of british men in macedonia who died, who showed some symptoms consistent with ebola. says heis colleagues was never in a country where there is ebola, so it might be a false alarm, as we saw in france

last night. we swooped in and surrounded the civic center with 60 people inside, four children from ginny had come there. they were asymptomatic, tested, nothing wrong. but there are a lot of these false alarms. >> the who -- >> it doesn't get much more stern than this. the world is said way behind the curve in its response. it needs to be up by at least 20 fold. nothing less than the future of africa is at stake. these three countries, ginny, liberia and sierra leone have about 1.5 lead dollars -- $1.5 billion. those economies could lose as much as [no audio] in addition to the billion and a half i can tell you there is more aid coming in from the united states going into liberia

and monrovia into the hot zone. another stark statement from the cdc said that if we don't stop this now, this will be our next aids. that ebola is now entrenched in those west african countries. >> what is the impact on travel and tourism? >> the risk -- at the risk of sounding crass, you don't talk about ebola and luxury in the same sentence. cases of more infection in europe, that could lead to a drop into her zone which would affect luxury goods. i don't know if you knew this -- travel retail, people coming to europe to buy luxury goods, accounts for half of the sale of luxury goods. beverages and spirits in particular would be hit as well.

in 2003, the sars epidemic, store saw a drop in 6.5%. luxury good share prices down about 25%. democracy campaigners are calling for a revival of mass protests. we are live in hong kong. [no audio] >> these roots here right in front of the government's main building are among those the government really wants to vacate. i don't know if you can see it is pretty lively now. and a lot ofme office workers have come out to join the protest. protesters have called on supporters to join a rally in -- at 7:30.

they are calling this area umbrella square. theyse of the collapse, want supporters to show up in full. alex chow says the university uses a delay tactic and wants to be prepared. he says that students are using everything they can to make their voices heard, including surrounding government buildings. a short time ago we heard from another student leader, who wanted to argue his case. if the government is willing to reopen the government headquarters, the students will consider reopening the roads. he also said that the next three days are crucial on whether the government could be forced to respond to their demands for more democracy. this is one of the key issues at hand. >> what led to the tort

collapsing? what happened was the students were increasingly saying how unhappy they were. that they wanted democracy to be addressed and that the government insisted it should be based on china's already existing proposal. they said it did not meet their demands for democracy. the number 277 here in hong kong, second only to this chief executive, has been calling for more rallies yesterday. she put pressure on the government and called for more rallies, making it impossible to begin the furlough.

this is what you had to say. >> it is misleading is not acceptable for these talks between the townsfolk and the students to be linked. worse still to be deployed as an excuse for occupy central, to incite more people. >> we are going to leave it there. we will come back to her a little bit later. join us on twitter to follow the conversation. let us know what you think of today's show. tell us which stories are catching your eye and which one interests you the most. shoot me a message on twitter,

#markbartontv. -- @markbartontv. dysfunction in washington causes setback in the global markets. ♪

>> time for today's company news. pimco may have been able to unwind some of the market, according to data. billion reduced by 38% in september. hong kong shares are down nearly 8%. they explored a stock exchange in australia according to people with knowledge of the matter. spoke withey large-scale investors earlier this year to gauge their respective. -- peoplefter it familiar say it would make any future deal include -- easier, since rio is listed in australia.

businessng playstation has unveiled a new mobile device that can stream video games. users who own a playstation 4 will be able to play their games remotely. smart phone sales are at a record this year, forcing the company to cancel its dividend. unveiledhief executive the company's newest electric car at its headquarters in california. he spoke with betty liu about the news. it can accelerate to 60 miles per hour in 3.2 seconds. >> it enables an increase. we are able to balance the efficiency of the motors a lot more. butou just have one motor,

if you have two motors you can optimize and stream them, and have the most -- the more efficient regime more of the time. the net result is we are able to get 10 miles more range just by having two moteors. >> despite five years of consistent growth they are now battling some sharp setbacks. happening?s decline.eks of it is weak. talk about the swings and fortune. -- in fortune. so muchhat is driving of this worldwide, remember is happening at the front end of the earnings season. we have got quarterly earnings that peak over the next two or three weeks.

how earnings season goes will really describe and determine how they behave for the rest of the year. >> i think i'm right in saying we are expecting a growth of 4%-5%. would that be in line with your projection? >> if i were to choose which way to go i would take the over. if that happens, if it does turn out a little bit better than i expect ahen i would squeeze following the current setback. we have seen it happen in two phases. 10 days ago there was a sharp setback and then a very strong rally. that was the initial position at the head of the earnings season. now we are seeing the global growth, the geo clinical worries -- the geopolitical worries about ukraine and russia and syria, iraq.

we have a pretty difficult world environment. that is enough to undermine sentiment and cause the markets to come down. >> the imf said -- no, in the u.s. they are not. the s&p is at 17 times earnings. that compares with the 10 year yield of 230. very from oa few specific media and tax stocks -- 500ing that aside, the s&p is on a very modest, very of the rangeiddle valuation, at a time when the domestic economy is doing very well. there are three things driving the u.s. to mystic economy -- cheap energy, innovation and productivity, they are rising through the crisis uniquely among developed countries, and

the continued, modest improvement of the housing market. with those three things going on, u.s. to mystic business is actually doing much better than most commentators believe. that is the key to the u.s. equity market. >> we will be continuing with this after the break. ♪

>> it is 6:23 in london.

still want us is the principal global investor. we were talking about the eurozone. to put it nicely, we are not too optimistic about the outlook. wherecontrast to the u.s. you have these fundamental things driving the domestic economy, i look at the eurozone kind ofecb is doing the thing it needs to do to get the economy going. everyone on the monetary side for mr. draghi on down has said, is that government policy in germany is quite restrictive. that is not the playbook that has led to growth in the recovery from the 2008 2009 crisis. you have banks that are still weak. the u.s. and britain refinance but europes,

didn't. it is trying to do it slowly and stealthily. that is stopping the growth of credit and income which is a very negative point for the economy. --re has been some common spain and greece have reduced unit labor costs but not enough in france and italy, which of the redder fluoride economies. economies.leurotic >> give me a cross-section of where we should put our assets, which type of bonds? >> i would be quite aggressive about u.s. equities, particularly small domestic earnings. in europe i would be selling on strength. i think the growth is just not there. i know european equities are on lower valuation but that is not enough. it's not that europe is completely aerated. -- arid.

there are excellent companies. there is a commodity element to the european market. there is an oversupply of virtually every commodity. abouter people talk efficient demand from china, that is not the issue. the issue is oversupply. >> emerging-market equities which has come back by 15%. >> emerging-market equities will remain dangerous, looking forward in the short term don't expect a lot. and a five or 10 year view, the increasing prosperity of the middle class, economic liberalization it is going to make some long-term attractors. if you need money into her three years, avoid fo.. for retirement, maybe. >> always good to see you. ceo of principal global

investments. --ill have ♪

>> welcome back. let's take a look at the bloomberg index. the dollar against its biggest trading peers, a broad index. this is what is happening today. over the years, what has happened in the last seven weeks has been particularly interesting. for this weeks, the spot index for sevenfrom -- consecutive weeks, the longest

consecutive winning streak since 2010. it looks like that winning streak could be coming to an end. --s reflected in currencies the global economy is slowing. boosting demand to say -- today. japan's currency is rising this week, except for two of its 16 major peers, thanks to comments made by mario draghi. there were indications the region's economy was losing momentum. officials were saying the u.s. may be at risk from worldwide slowdowns. keep an eye on the spot index. the longest winning streak since 2000 and is on track to all for the first week. draghi,e the -- mario has found himself under more pressure. he was pledging to loosen

monetary policies. at the same time, the german draghi saidister -- it was best to protect that the ecb will start raising rates by 2017. u.k.toric day for the party in the house of commons. he won the seat from the conservative party. and claimeddefected the seat for his new party and a by election yesterday. it puts more pressure on david cameron, who promised a referendum on eu membership by the end of 2017. the u.k. is set to start ebola screenings at airports. it comes with as to new cases are reported in eastern europe.

the world health organization has warned the disease is now entrenched in west africa. chinese officials are set to meet with angela merkel. willuld this dish -- they discuss trade relations. we are joined by ryan chilcote. hard to understate the importance of china for germany. >> they have a massive delegation that gives you a sense of how important relationships with germany is. it's equally important for germany. if the eu is china's biggest trading partner, germany counts for word. we expect to hear from the chinese that we want your trade, let's go from strength to strength, but also we want your technology. nd increasingly all of them are under pressure to share more of their technology with the chinese. they have 67 billion euros will

stop -- euros. they want that to increase. the exports and china have been decelerating. troublesinese premier from germany to russia. what is the relationship like between the three countries? >> it's a very interesting one. germany has always sort of been russia posco way to the west and increasingly, china is in the position where china is kind of a mediator or could act as a mediator between russia and the west. our understanding is that is what the german chancellor intends to ask of the chinese. the chinese prime minister said it will begin with president putin. german chancellor will meet with president putin herself on friday in the line. -- in milan. if you think about it from a trade perspective, germany does a hundred 60 or less -- $160

billion or less. germany did when hundred $4 billion in trades with russia. that means two things. germany is concerned about his relationship with russia, not just about ukraine, but how to find a resolution so they can continue traded in. -- trade again. also they are keen on picking up some trade. >> thanks. shanghai. shawn, always good to see you. >> it's great to see you. >> tell me about who needs to more -- china and/or europe and the eurozone. >> that's a great question. i think investors need to

realize that the chinese economy is much weaker than people realize. their gdpeps revising growth prospects. i think china right now needs germany in many ways more than germany needs china. it's because the growth model over the last 30 years has broken in china and they are focused more on invasive. -- on innovation. they are really trying to secure more of that innovation from german industry. they are going to be looking at better, safer health care and food innovation and technology, as well as construction equipment and electricity because the government is still pushing infrastructure spending offset wendling growth. -- offset wendling growth -- dwindling growth. as why there are so many ceos on this trip this week. >> you mentioned technology. how easy is it for german technologies to enter into joint ventures?

if you start sharing your technology, you start creating competition. i don't like doing joint ventures. we recommended to companies that unless the government forces that you should never do it. the chinese are very good at taking technology, but german companies often transfer technology to their partners but their partners become their competitors. it is a very fine line between exporting, making money, and betting who are your competitors in five years. ishow much of the visit china trying to cozy up to germany and/or europe while at the same time has its relationship deteriorates with the united states? >> there are two parts. the first is that there is a lot

of tension in asia right now between china and japan, the anon, philippines and internally with hong kong. to dole out want money to a lot of countries in order to get their support. political issues. that will see him. but you also have a lot of concerns within china that there is rising projection is. -- proj ectionism. member companies are saying that china is increasing protection. iossm. i think that current prime minister is going to have a lot of contrast to the larger, european firms that could. the primeither minister designed to offset the tensions that happen in the geopolitical realm. >> quickly, will the recent protests in hong kong did any european businesses --d eter any european businesses?

>> no, i don't think so. i think the community in general wants to go back to doing business. they didn't like the destruction. i think most business and then want to -- most business been want to get back to business. they do not want to see the protests spiral into china. most have very little sympathy for the hong kong protesters, and part because the hong kong people have been fairly negative and have a lot of anti-mainland chinese mentalities. i don't think that will have an ongoing effect on mainly in china but it will have an effect on hong kong business. >> we will see you soon. at chinaing director market research group joining us from shanghai. he comes out with a new book next week.

india's second-biggest software company has released results today. the company will issue free stock to shareholders. is live fromw mumbai. what emphasis does this say? >> it is all about the stocks in the newly appointed ceo. they become the first non-founder ceo. like you mentioned, the estimates and all 39 analysts ofe been beaten by the rise net income coming in from the last quarter. it is boosting the shares to the highest level. they have announced a free share. it's a bonus share for all shareholders.

that is boosting confidence for the company going ahead. the need toiterated rebuild client relationships and focus on rebuilding the traction that they have lost over the last few years. and had agone ahead growth. it will be uphill, given the fact that the overall growth has of the in the first half year. a lot of challenges are ahead for the new ceo. we have seen a lot of top management changes coming in. it is going to be at half -- going to be tough to manage. that will be his key focus going into the new year. >> thank you for joining us. up next, football.

a surprise last night. i'm not talking about a 5-0 win. ♪

>> welcome back. it is 6:44 in london. let's turn to football. here to discuss tonight's surprises in europe and give us his take on the premier league season so far is then littleton -- ben littleton. he has a new book. was there perfect penalty last night? >> there was, from wayne rooney. he changed his technique the season. missed quiteob, he a lot. he has probably read the book, change the technique. >> not a surprise that england won.

should've scored morare goals? >> should have but it doesn't matter. he missed two or 31-on-one chances. his total of 44 goals -- in terms of result performance it is fine. he wrapped 208 in the world. a win is a win. >> england doing well. it's not the toughest of groups. >> it's hard because most of the groups seem quite simple and you don't know how competitive they have been until you get to the tournament itself. this one is different from others because the numbers have changed. 16 to qualify to 24.

the quality will be lesser when you get to the tournament. get the know when you last day of the knockout stage. >> what format will it be then, in 2020? >> they will bring in something called the nations league, where they divide the 54 european teams of the four divisions. will see england may playing spain or portugal or france and germany. and every division you will get one winner. be the traditional qualifying of the other 20 teams. it's complicated that we might see more competitive matches. >> there might not be a matchup between england and spain because spain lost last night. they lost 2-1 to slovakia, what's goin gog on? >> they've won three

tournaments in a row. they are finding it hard to let go of old plays that are a part of that team. we could see it in the goalkeeper who is had trouble all of last season. this season he is in the side. there are calls that he should be dropped. he did not have a good world cup. they have got a lot of junk players coming through. they think the goalkeeper should replace him. >> switzerland lost. are they suffering from world cup... malaise? >> there is this transition post-world cup hangover. they lost last night to slovenia. no points from two games.

they are ranked 10 in the world and england is only 18. they are expected to top the group. i think they will be fine. they can get away with losing to in the group but no more. >> probably the most interesting matches taking place -- >> amazing games in the weekend, argentina and brazil. the icons of each side will be up against each other. it will be interesting to see them take each other on. well,nce and portugal as there has already been a clash between the french and the portuguese. they go head-to-head on the touchline. france is, how do you stop christiana? o? three hat tricks in the last four matches.

he is never quite as good as the record score. >> chelsea was running away with it. do you expect them to beat top of the table? >> i would say yes. diego is playing so well for chelsea, nine get -- nine goals in seven games. they can't convert his club form. >> it was just before the premiership season started. had their united amazing last few days buying spree. you said to me offset that you would be so lucky to get them, and how right been littleton was -- ben littleton was. >> is probably the best player at the moment. the problem is when they win a game and everyone thinks they are good enough to win a title.

and when they lose they are not going to finish in the top four or top six. they are somewhere in between. they are constantly adjusting expectations. you think they will reach the top for the season? >> i think it is a four-way race for the top four. top three, we know who they are going to be. liverpool, southhampton, and united. >> you will stay with us. new author. coming up, the latest movie review for the maze runner. ♪

>> i am mark barton. the big election results here in the u k. brian is here to tell us about it. >> seaside town of claxton. former member of the conservative party defected in august. 2010.'s elected in

what does one seat matter? well, this might just get you a podium for -- >> they were close to winning the other by election. >> their best ever results. >> there is another by election coming up as well. he was criticizing everyone in english cricket. and there was a book launch yesterday, the headline from "the guardian" -- "the criticism was ridiculous. will i ever forgive him? i don't know." because judge marino disgraceful for trying to shake his hand. the bearded assassin really has got it in for everyone and foot all. will he ever get a job as a manager?

i think he's a bit of a loose cannon. >> i still have that opinion of him. he needs to learn. >> he is happy now. he is an assistant coach. both teams are doing well. he can be the scary guy behind the scenes. >> i bet he is regretting or backtracking is and he -- isn't he? book!"dn't even read his >> it's the latest teenage dystopian film. ryan has a household full of teenagers so maybe he can take them. nner" is doing very well in the united states, following the path of "the hunger games" and "divergent." is your house full of teenage dystopian -- >> one teenager, he is 13. i have an eight-year-old and an

11-year-old. >> this is my twitter handle . follow us. @markbartontv. ♪

>> ecb rate hikes. says investors are predicting. the central bank president reinforced his commitment to more stimulus. lower.rates so they are this increase the guidance rates will stay low for long. stocks around the world selloff on concern europe is slowing down. sincefall to the lowest

2010. travelersill screen at airports. the disease is trenched in west africa. everarty wins his first elementary seat. ♪ it is 7:00 this friday morning. we have an exclusive interview. live from berlin. china's prime minister visits europe. mario draghi is in washington for the annual policy meeting. the ecb president renewed his vow. he will combat inflationary

forces in the eurozone. >> we are accountable to the european people for delivering price stability, which means listing in place -- lifting inflation from its low level. we will do exactly that. >> he never ceases to amaze me. touch.euro down a the man committed to his mandate. you look through the speech. there are plenty of nuances there. it is not just a cyclical problem. it is a structural one as well. to get those things done. to ais a prerequisite recovery. that all debate about reform is the title of the speech. 's message is yes. >> he also says the ecb is ready to do more if necessary.

the finance minister is worried about moral hazard, isn't he? >> when they unveiled the limited bond market there was talk about whether this would give france, italy, spain and excuse to take their foot off the reform pedal because yields would be lower. discipline toeal do so. that discipline is not there right now. how much of a difference will it make, considering yields are already on the floor at 0.9% in germany on the tenure. 1% mark.t the record lows across the eurozone. you wonder what a difference it would make. >> bond yields continue to fall to records in europe. >> the swings are remarkable. put slide in there instead. just a huge swing.

the guys coming up with a stack it is the biggest since 2011. big moves in the commodity markets. oil is coming lower and lower. down well over 20% from june. there are plenty of excuses for oil to be higher. supply is no big concern. demand a lot of concern. there is no growth. >> there is no growth. that is true. will there continue to be no growth? we will see you later. sent tim cookd -- an open letter to extend share buybacks. say the company is dramatically undervalued. cook's stewardship of apple.

>> we have a good relationship. he cannot tell me things he cannot tell others. i think he is a great listener. i have criticized many ceos. i believe one of the problems for the country is the system is dysfunctional. you also have good ceos. he is one of them. >> it is the historic day for the u.k. independence party as it wins its first seat in the house of commons. douglas cardwell has held the seat since 2005. he claimed it in a by election held yesterday. the move puts pressure on david cameron, who has promised a referendum on eu membership by the end of 2017. travelers to the u.k. arriving at heathrow and gatwick will now be screened for the ebola virus.

tail?ill these checks and >> if you arrive from heathrow or gatwick from west africa, you will be asked to fill out a questionnaire. you may or may be asked to take your temperature. critics of this plan say, people can live. second, usually people in the beginning are asymptomatic. they point out hong kong, singapore, which had temperature checks at the airport rarely do texted people. in any case it is more than what they had. also, euros star terminals will be checked. this comes after a scare yesterday. the british foreign office is looking into the death of one british man in macedonia, who had symptoms some said are consistent with ebola. thiss never anywhere where

ebola epidemic was. we have british hospitals as well this week and getting ready to do a dress for her soul in the event there is an outbreak, to make sure they are ready. >> it comes amidst stern words from the world bank. hear much.t save the future of africa is at stake. 1.5 billion in aid. the world bank says if the worst-case scenario holds, their economy is going to lose as much of$32 billion by the end next year. we also heard from the world ebola organization the virus has been entrenched in those countries. we heard from the u.s. centers control, saying if

this disease is spread and doesn't stop quickly, he said that is the most important thing. the next aids.me >> what about the impact on travel and tourism? practice could be a hit for the luxury sector. if you see more deaths, travel is luxury retail. cosmetics would also suffer. sarsistorical example is in 2003. luxury goods share prices fell in roughly the same time 23%.

>> thanks very much indeed. you can always follow on twitter. tell us what you think is the biggest stories of the day. tell us what you think we should be covering. which stories are catching your eye. on twitter for a second month. who would have guessed. instruction -- destruction causes setbacks next on countdown. ♪

>> time for company news. pimcomay have begun -- may have begun some of the bets according to the biggest bond fund. the sun reduce holdings of government related debt. hong kong listed shares were down nearly 4%. the minors explored a stock exchange listing in australia. they say the minors spoke with

investors earlier this year to gauge their effectiveness down under. it comes after rio tinto reads the offeror. people familiar say the listing would make any future deal that includes stop with rio easier since rio is listed in australia. and the company's newest electric car in california. he spoke about the new model, which has a second motor, allowing it to accelerate to 60 miles per hour in 3.2 seconds. >> it actually enables a range increase. we are able to balance the efficiency of the motors a lot more. if you have one motor it is always a particular efficiency curves. if you have to motors you can optimize between them and have the motors operate in their more

efficient regime more of the time. the net result is we are able to , whereasles more range in every other system you lose range. more throughout the day. major crises have had a lasting impact. i want to talk about what is happening in markets. it is part of your geopolitical standpoint. what is going on? been all over the place. >> it tends to be volatile this time of year. clearly investors are worried about what the fed is doing.

in our portfolios we have they areisk of bit. still positive medium-term, but we have reduced risk. >> can you tell me where they have reduced risk? >> we have just taken off a little bit in equities and hard currency bonds. we took on a duration which has proven to be the right thing for down.ment yield to come >> in emerging markets, what was the reason behind that? emerging equities have been coming down steadily for the last six months. why are you taking this step now? >> we have had a more neutral view. we are turning out right negative. growth if there are more concerns. the fed is a bit up-and-down. it is not a good formula. >> what are your growth concerns?

the imf cited it. the fed cited it -- fought it. what are your concerns when it comes to global growth? >> we are not saying when it comes to recession. it has been tremendously slow. within the eurozone there is an enormous battle going on. yes, we want more monetary ease, but we want structural reform. what happens to fiscal stimulus? very messy. init is played out washington. you have the finance minister and you have mario draghi on the other side. he has said we might implement more measures. creates moral hazard. as germany need to do more? >> germany i think is not the heart of the priority --

problem. i think the problem is structural changes being implemented to slow the else where. step on a the first process that can last a year or more. slow.nce it was very >> i asked jim earlier. imf used that term. >> i wouldn't use that. if you look at conventional measures, any kind of measure , all ofpares to bonds the equities are close to fair value. it is only something like 10 year trailing that gives you over the top. >> are there some areas -- we have seen a decline in small and medium-sized caps. it is in corrupts -- correction mode.

we have seen other areas decline. are there areas? >> the fed came out and said bio and tech is looking overblown. caps got ahead of themselves. they corrected. a big area of corrections outside the equity market. when you have got monetary stimulus, that tends to put areas toessure on some move ahead. you have to say, is there value, or is there not? mainstream you are at fair value. with the economy eventually re-accelerating and interest rates moving up pretty slowly in the u.s. it can eventually go higher but a lot of bill -- volatility in the short-term.

>> that means what for the bond markets. said the global bond markets, all types of fixed income have risen this year. bonds are on track for sincest since 2000 or 2002. at least a decade. ?here should we be going >> i think there is not any concept of long-term value. credit spread is not quite as squeezed as they were, but it is still low. value.s not -- theall uncertainty u.s. budget deficit is falling

sharply. the supply remains tight for government bonds. >> thank you dairy much. over the past 100 years only three major crises have had a lasting impact on equity markets. that is what we will be talking about next. geopolitics and the impact on markets. stay with us. ♪

>> welcome back. 7:22 in london. jonathan, you have done some research on geopolitics. you have looked over the history books, and you have seen what an impact geopolitical event have on markets. what have you uncovered? >> we looked at the last 100 years. everybody is always saying there is a geopolitical event that is had threent. we events that had a lasting effect. even something horrid like 9-11, the market was only up 11 or 12%. within a month it was back to where it started. like thefor something lockerbie bombing. individual markets can be affected. the major markets these effects are remarkably limited. >> when you see that 10 or 11%

drop, you buy? >> that's exactly it. unless you literally think the third world war is about to begin, you should buy. >> it is only a war. skirmishes, the sanctions, ebola, serious, they are not big enough. they are not, you are saying. >> this is the lesson. you get small selloffs. things rebound remarkably swiftly. to say thely have world is going to change completely. it is going to be worldwide and horrendous. >> it is interesting. crude is in a bear market. at somepoint do we look of these commodities, which have fallen by 10% since the highs of this year and think, there is a bit of value to be had?

>> you have to say oil traded around $35 a barrel. we all got focused on financials. we barely noticed this. they tripled. what is the normal level for these? when prices have been as high as they have been, that causes an enormous rise in supply, not just fracking. the effect has been hidden because of attitudes elsewhere. some of that comes back when the price heads back to normal. back tould be heading average? >> we could see at least in the short term a bit more temporary weakness. >> on the matter of oil you are maintaining your seven top investment ideas. remind us what they are. >> we review those all the time. europe. weored savored tech stocks.

we were trying to draw out an across the board theme. where is reform coming through? that works in places like india, brazil. we will see what happens after the election. on fixed income our top ideas really is hunting out the value. >> and remind us exactly where that is. >> it's a matter of choosing very carefully. some of the corporate hybrid bonds we think are quite interesting. fixed income is a very difficult call. >> things for chatting about all sorts of things. of wealth management at credit suisse. after the break we are going to speak to the eu commissioner of .rade, live from berlin china's prime minister is in the

german capital. stay with us. ♪

>> time for your fx check. let's have a look at the spot index that gauges the dollar against its biggest trading peers. risen sevend consecutive weeks. that was the best -- the longest winning streak since 2010. it looks like the index may come to an end today.

we could see a decline in the spot index. it is heading for the first weekly gain against the dollar. japan has risen against all but two of the major trading peers. indications -- we had federal reserve say the u.s. may be at risk. that is what is pushing the dollar lower this week. intimated that rates will at least stay low through possibly the middle part or later in 2015. the spot index, which has had a great run, could fall for the first week in a. headlines.he top

mario draghi has found himself under more pressure. german finance minister warned against doing more easing. germany said investors think the ecb will only start increasing interest rates by 2017. the u.k. independence party wins its first elected seat in the house of commons. cardwell has held the seat since 2005. he recently claimed the seat in a by election held yesterday. this puts more pressure on david cameron, who promised a in 2015.m and a move to start ebola

screenings and airports. the disease is now entrenched in west africa. the north korean leader kim jong-un hasn't been seen in more than a month, fueling conspiracy theories. the international community has .eard claims he was deposed the world is watching to see if kim makes an appearance at the anniversary of the founding of the workers party. for the charts. let's look at the fear index. this is the index measuring volatility in the united states. we saw a big lift yesterday. volatility rose.

the fixed index rising 24% yesterday. that's the most in two months. this is a one-year chart. at the highest level since february. fascinating stats surrounding the stock market. the s&p 500 posted five single day moves exceeding 1%. anymarket went without swings of that size for 62 days in may, june, and july. s&p the past 15 days the posted an average daily change of .9%. that measures volatility. in 2014.hat with .8% at the same time volume has risen correspondingly.

$800 billion has been raised ofce the s&p hit its record 2011. since then it has fallen by 3.8%. puttingy's 2% drop is more distance between it and what forecasters are saying. reach 2050 they say come the end of the year. that is a 6% rise on the current level. it is now trading below the for 2014.diction some interesting stats about the s&p. it hasn't fallen for four days this year or 10% in three years. this is the fear index that matters. this shows volatility is picking up.

we had such a long time when there was virtually no volatility whatsoever. marked a 24% increase in volatility in the fear index, which is the most in more than two months. after the break we are going to with the head of trade as china's prime minister is in the german capital.

>> the time in london is 7:39. what does this trip mean for trade relations between the the e.u. and china? thank you for joining us. how important is this trip to and forging closer relationships between not only china and germany but china and ?he european union

>> the fact the prime minister is coming to germany and it is not the first time to do so means it is very important. when you look at export figures it is obvious in both. germany is a gateway to european markets. there is a lot of importance. china still doesn't look at the european union as one market. are focusing on a number of member states. the most important one is germany. i think they have a double aim with that.

sellingnd you are products in markets. play one they want to member state against another, and they are pretty good at doing so. >> what can they do to make onea view the market as rather than lots of individual markets, which sounds like it could benefit them. >> it is very simple. we have to act as one. exclusivepolicy is an competence -- confidence of european markets. the commission for trade has a pivotal role and to the extent they act as one they will be forced to css one.

-- to see us as one. if you have member states they like us more than the other member states, that is playing in the hands of the chinese. we shouldn't lame the chinese for doing that. we should make sure they cannot do it. >> europeans are acting as one in treatment of russia. many are saying china is being quite clever in its treatment of europe while europe imposes sanctions on russia and russia retaliates. up some ofry to pick the business europe has lost or will lose in its dealings with russia because of sanctions. what do you think of that? china being duplicitous here? >> if there are sanctions to thata, they try to take

market. not only china but other ones. retaliation oft russia, the ban on import of , they comevegetables not necessarily from china but other countries. i think you can in a purely mercantile us way -- mercantile way. if you look at it in a political way, it is obvious we have moral obligation to take sanctions against russia, especially after with the airplane crash, that took more than 250 european lives and were clearly russia did not do it themselves, but a were responsible for what was happening. of aave seen the creation

new conflict in the east of ukraine. we have to act. we would be cowards if we didn't take action. it does not mean they are ready to come to understanding with russia. i made an agreement with russia but made it possible the was ratified. this was a political problem that has great ramifications. it's not a trade war. ofis the trade ramifications a political problem. war that has a mercantile us implications. businesses will suffer. what are they saying about the ongoing tug-of-war with russia? look at what is happening with the german economy? having -- it is

clearly having an impact. what are businesses telling you? cope,ch more can they especially if the sanctions go up of further year? there is no war. i was mentioning a trade war, which is different. i am pretty sure there will be no war between russia and europe. putting onn you are the german economy, i believe there are several are's that contribute to a difficult economic position. it is not only russia. a downturn of the economy and the south of europe because youimpact

are essentially an export driven economy. the only explanation in your relations with europe, i wouldt accurate. argue there are others that are more dependent on russian products that pay a higher price. you have close links with russia. thousands of russian companies that are exporting together with russian companies. i am pretty sure the impact is rather limited. overall a more difficult economic situation. don't blame that on this essentiallyat has political roots. the most important nation in europe has decided to take its

responsibility. >> coming back to china we have gone off a little bit talking about russian matters. do you think the chinese premier is coming to germany from a weakening bargaining position because of domestic matters? it is clear the chinese economy is slowing down. is he coming to germany, taking part in this from a weakening bargaining position. is that to the benefits of the likes of germany and eu? >> they have economic problems in china. banks werein the that are a lot of loans are not repaid. they are in a difficult situation. we are not in a good situation either. in either case the european

market remains the biggest market in the world. it is normal he is doing this, but the solution for the problems in china with respect to the industrial output, but environmentanking in china will not be resolved by exports to europe. they will have to do something by -- about internal consumption. there is a reason it doesn't take off. >> do you think the eu advantageer can take of the geopolitical tensions china? the u.s. and

do you think they can do that? .> we have another approach we try to find solutions. we are close to finding a solution. for example, the subsidies they are giving to the companies. it is disturbing the markets. china should progressively realize they are disturbing their own markets. something we are telling them all the time.

system which is state run is not that easy. >> thank you for joining us today. it has been great chatting with you. shotre looking at a live at the city of london. equities are expected to open lower. joining us is the equities strategist to look at what will drive the davis market. stay with us. ♪

>> welcome back. let's talk about equities. good declined yesterday. is it going to follow-through today? >> we are expecting the fatigue to be over 1% lower. we are going to see volatility remain in place. we see the volatility index creeping below that average. it will be interesting to see what sort of coverage there might be as far as u.s. trade is concerned. >> the season kicks off this week. it is the banks that kickoff.

it is really quite impressive. i think tuesday when the banks start to report that will be the .roper test how the environment has tightened up and scrutiny is much more focused on them. >> as we get screening in the , it is worth it for the airlines. >> stocks take quite a bit of a hit on monday and tuesday. we will be keeping an i out on , hotels as well.

i think as there is another case reported in europe there is a real fear this is going to jump across the mediterranean and start to affect the eurozone as well. >> and minors? commodities have had a horrible year. is that a bit of respect? >> yesterday saw precious metals do their best to try to prop up the ftse. minors were concerned. do thatl probably again. the dollar movement as well is helping minors. >> has the dollar's run come to an end? we have seven weeks of gains. this could be a decline. >> yesterday's move had been asking ourselves is this a bit bounce. it looked like it had been materializing. it anticipated a july time i'm

for the start of interest rate rises in america. maybe it just got pushed a little bit further down the road . maybe. >> great to chat with you. have a good weekend. ♪

>> welcome back. happy friday. we are moments away from the start of european trading. futures are pointing lower. this has been a trading week for the brave. europeanks up by 1.8%. stocks are set to head the same way. oil price continues to plunge. down over 20% since june. we are going to talk about the u.k. independent party.

take the first-ever elected parliamentary seat. what does it mean for u.k. business, and what does it mean for the pounds in your pocket? ftse futures down over 1%. about what we have had this week. that has been coming into focus. it is the macro story. everybody is focusing on what is going on with the fed. this is how we are opening. looking