nce january 2013 before bouncing back to $1.06. dollar weakness is the story this morning. i'm going to bring you that exclusive interview with ewald nowotny later on in the show. have a listen to what he's got to say about negative yields. for now, it is about equities. futures a little bit lower. down by four points. the dax pretty much dead flat. let's get the caroline hyde. caroline: let's check in. 12 seconds into the open and we are looking at stocks to gain a little bit. the ftse up 0.2%. france falling a little bit. the stoxx 600 7.5 year high. that is where we closed yesterday. there is room to go further, so says wayne bowers. he is head of investment ceo of the european element. almost $1 trillion of cash to splash.

he says, take profit in overweight united states stocks, plow them into europe and japan. that is where you should be reinvesting in your stocks. ftse up 0.3%. let's check on how bonds are doing. ecb we are in day four of the bond buying. they've got to be buying 60 billion euros worth month on month. we are seeing borrowing costs coming down in greece. that is on the 10-year. italy continues to fall as well. spain looking flat. germany just inching up that little bit. the key moves we saw were in the euro. this is where we are seeing a little pot higher. at one point, we were below $1.05. seems to be a little change of direction if you have been shorting that euro of light.

remember, weakened by a record 13% this year. biggest loser against the developed markets. we still see the ecb committed to starring on inflation. denmark's biggest pension fund trying to work out the right time to sell your government bonds. when will receive a borrowing costs weakening and that sparring on the economy? when the economy starts to turn that is when you want to the offloading sovereign debt to the ecb. let's have a look at the stocks this morning. we've still got a few earnings out there. keep an eye on the bank stress test. deutsche bank off by 0.4%. santander u.s. units fail the federal reserve stress test. not because their capital isn't good enough, but it is quality they were looking at. they are saying the tests weren't rigorous enough. deutsche bank, off by 0.4%.

hugo boss, wait for this one to move. we are calling it down about 3% on the open. disappointing in terms of dividend and future earnings growth. they say earnings will be up 5.7%. the luxury goods maker might have a suit or tie of yours, jon. morrison's, the smallest of the u.k. supermarkets, off by 2.3%. full-year loss, 761 million pounds. profit underlying halved. they are also cutting their dividend by 63%. reviewing the convenience market allocations. they've got into a convenience store definitely trying to play

catch-up. doesn't seem to be working. they are saying, we are going to slow down the pace of expansion, close a few stores and review our plans for the future. back to you. jonathan: caroline hyde, thank you. looking at the ftse 100, we are up by 0.4%. it has been a busy week for markets. how about we get another central bank rate cut? south korea's central bank unexpectedly cut rates to an all-time low. perhaps it shouldn't be much of a surprise. it is the race to the bottom as global central banks try to devalue currencies across the globe. who is winning? it is a man named mario. the collapse of the single currency continued overnight. a month ago, the euro traded just short of $1.40. today, we broke $1.05, heading

for the worst quarter on record. we are joined now by johnny chief investment officer at axis. dollar weakness this morning. i tried to adjust my terminal to find out if this is allowed. apparently it is. the story has been dollar strength. do you expect that to continue? guest: i do expect the dollar strength to continue. one would have to take the view that any sort of fullback is part and parcel of today's market. it has been in extra, mainly because of the euro. there has been ups and downs. dollar-rand has been strong and weak. the dollar has been generally strong. i don't know that you can extrapolate a day-to-day move with the trend in place. jonathan: i'm going to play to the media stereotype. head towards the dollar. too week?

are we going to have that conversation? guest: if you overlay the timeline of qe with the dollar qe in the u.s. is coming to an end or they are trying to filter it out. it is not an exact science. telegraphing of the messages is not perfect. subsequently, you've got a dollar rally. you've got the eurozone doing the same thing. probably, it is going to continue for a little while longer. i think the euro weakness is in shape for the time being. i think there will come a point when the euro is going to research. jonathan: what is the catalyst for that? guest: i think when draghi starts to pull back. not for another year or so. jonathan: parody, do you expect that soon? guest: if everyone is watching for a target, you may not get it. you may get a slight backup.

that is a tactical approach rather than fundamental. fundamentally i will say the euro is going lower. jonathan: you talk about parabolic move. we are talking about the dollar as well. 2013, the taper tantrum, the federal reserve had to back off a little bit. are they going to have to back off because of what is happening in the fx market? guest: i don't think the fx market is going to affect their outlook. i think they've already entrenched a little bit of this into their figures. they would have spotted this. maybe the extent of it comes as a bit of a surprise. i don't think it is going to change their trajectory. jonathan: let's spread things out a little bit. not just a stronger dollar, but a weaker oil price as well. put that into record low yields. these brings -- these three things are all connected somehow. what does it mean for equities?

guest: i think the equity story is intact because you have to look through the overall picture. if there are low interest rates, if the economies are benign, if growth is not zero but bumbling along then that is ok for an equity environment. if forecasts are lower, then you've got a selection of companies that benefit from this environment. jonathan: which ones? guest: i would suggest you look at anything that doesn't get exposed to emerging markets too much. if you look at south africa or brazil, these economies are really struggling. the em index is a broad benchmark of europe. there's a lot of damage being done by this dollar strength. jonathan: em struggling greece struggling too. the nation's finance minister yanis varoufakis, tells local television the ecb is a sexy

aiding the government. -- is asphyxiating the government. ♪

jonathan: good morning and welcome back. the tax is a little bit firm. the ftse 100 up by 0.6%. german theme in our top stocks stories. lufthansa beating estimates and a striking and optimistic time for profits. the stock up by almost 2%. hugo boss they say profit will

grow by 5.7% in 2015. that is not enough for investors. stock down by 3.4%. deutsche bank am of the fed rejects its u.s. unit capital plan. stock is up by 0.1%. some questions remain unanswered. germany the theme in back when he markets. let's go to greece. there is a little bit of tension between athens and frankfurt this morning. greek finance minister yanis varoufakis told local television that the european central bank is applying us exceeding pressure -- asphysxiating pressure on his government. meanwhile, greece seems to be on a road to nowhere. let's get out of hans nichols. some confrontational comments perhaps. hans: well, it is getting a lot of play in the german press.

it has been one of the lead stories on the local broadcast. this idea that germany mr. varoufakis has lost the trust of the german people. here is the quote. he said, mr. schaeuble has told me i have lost the trust of the german government. he said i told him that i never had it. there is a lot of conversation about this idea that mr. tsipras called for war reparations for world war ii. it was dismissed out of hand by the government. it was roundly mocked in the tabloid press, elsewhere in mainstream press as well. it gives you a sense of the tension. yanis varoufakis has been very clear about what he thinks the ecb is doing. here's what he said he thinks the ecb's approaches. "the ecb in my opinion is pursuing a policy that could be considered asphyxiating toward our government." that is the same ecb which his

country is drawing 69 billion in emergency liquidity assistance now. the rays that level, you need an approval. the board is meeting later today by teleconference. there is some opposition according to people familiar with the matter. it is a question of how greece is going to fund itself. they are turning to the ecb but they are also criticizing the ecb. i'm not sure how we get out of this. we do have inspectors arriving in athens today to look at the books. these are lower-level officials. importantly, athens is reserving the right to approve every time they show up in athens and want to look at the books. we could have more fights about audits down the road. jonathan: more fights shock horror. hans nichols, thank you. let's bring back in johnny.

i'm going to tell you my experience. i go to sleep every night, i wake up every morning, and i try to find out what is going on in greece. there is a little theater, a little comedy. it is serious, but for the rest of the eurozone, does it matter? as an investor, have you stopped caring? guest: unfortunately, you have to read all this information. you have to put it in perspective too. if you rewind a few months, the outlook was, the prospect of a grexit and destabilization, or a scrutiny of the constitution of the european union was thought to be a drag on the euro. the euro is now falling anyway. the big risks, people were buried the grexit would cause a destabilization in the euro, the euro-dollar has already fallen 20%. we can move on from that.

that outcome has already transpired. jonathan: one thing we are not moving swiftly away from is a grexit scenario. what is your take? guest: we've seen the sort of rise and fall for a long time. if you look into the greek bond markets for quite a man while, they were priced far too expensively. right now, i would say that capital is not far off the market. i wouldn't go much further from 50-50. i wouldn't bet against it and i'm not really too frightened if they do leave. jonathan: really? i'm looking at the three-year yield of 18%. this has been up and down like a penny stock. when we look back, i remember the auction just after last year with that yield around 5%.

guest: it was lunacy. donovan bank are we going to look at the eurozone in a year and say that was lunacy? guest: the yields in core europe, i don't think, are going to replicate the yields that you see in greece. i think greece has a little bit of a microcosm of its own. i don't think you can take it situation and translate it. if you imagine that spain is one of the more full normal ones for italy, they are not comparable. they've got much more debt than strength in their economies much more ability to help themselves, and much more international focus then greece. i don't think you are going to get that situation in those countries. jonathan: we will talk bonds after the break. a stronger euro this morning. what is this?

we drop below $1.05 for the first time since 2003, then we bounce back. weaker dollar the story this morning. do not adjust your tv screens. the euro is stronger. the stoxx 600 also up and the yield on the german 10 year there isn't much of one. we will talk bonds after the break. we will dive deep into the bond market in europe. i spoke with ewald nowotny about negative yields and what it means for markets. we will bring you that interview, next. ♪

jonathan: good morning and welcome back. stocks a little bit higher. these are the top stories. the international monetary fund $17.5 billion loan program for ukraine. $5 billion of the loan will be immediately dispersed. the south korean central bank unexpectedly cut its key interest rate to the lowest level ever. the nation lowers rates the 25 basis points. south korea is finding -- is fighting cost deflation as it struggles with low consumer growth. credit growth in china beat estimates for the month of february. china central bank has cut interest rates twice and resist bank reserve requirements once. the shanghai composite closed up

1.8% this morning. in the bond market, the rally in europe seemingly knows no limits. record low bond yields dominate the market in europe. in germany, yields are negative all the way out to seven years. what does it mean for the european central banks? i caught up with the ecb governing council member ewald nowotny in an exclusive interview yesterday. guest: one has to be aware that on the other hand, there is an inherent risk of future losses if we buy at negative yields. basically, one would like to avoid these kind of future losses. jonathan: avoid negative yields by buying longer dated

maturities. check out the performance of longer dated debt since monday. on your screen is the german yield curve. flat, flat, flat. the yield on the 30-year has gone from 1% to under 70 basis points in just three days. let's bring back in johnny for some final thoughts. the ecb saying the average maturity of ecb bond purchases so far is nine years. they are bought almost 10 billion euros of debt in three days under this qe program. the story really has been not the shorter dated debt. the longer dated stuff. i'm going to bring back up that german 30-year with a yield of 67 basis points. how hard is your job getting? guest: much easier. where would you put your money? in the dax. the dax has gone through the roof.

swiss franc, you have to pay them told swiss franc. jonathan: it is going to be an easy 12 months for you? guest: i think the ideas need to be simpler than in the past. you've got basic criteria in the markets now, where you put your money and what you get over a long time. with ideas like this, it doesn't make it any easier, but it does make it more transparent. if you are going to buy bonds, or live off what they leave behind? jonathan: the guys that by this stuff, aaa rated sovereign debt with a yield of 67 basis points, some people out there, their job is getting harder. guest: i'm not one of them. we are a go anywhere firm. we don't have to have bond allocation. our corporate bond allocation is a legacy from 2008-2009. it is coming to maturity in the

next year or two. i do pity the bond guys who have no choice but to buy this stuff. effectively, they're not going to be doing anything but matching the ecb curve. for them to outperform is going to be a challenge. jonathan: i remember the huge swing in the treasury market. not much liquidity in what should be the most liquid market in the world. as the ecb starts putting more of this on its balance sheet, is liquidity going to become a problem? is it already a problem? guest: sovereigns is no problem. the debt is too great. for a number of years, maybe almost a decade, we've noticed a steady decline in corporate bond liquidity. that partly fueled our change of focus as well. some of the illiquidity we were

experiencing really made the decision for us in terms of how we treat the corporate bond market. jonathan: just to wrap things up quickly, we used to say this was all priced in. we learned fast that ecb action is not priced in. what is the conviction call of qe? is it a stocks play? guest: i think it is a lesson learned from other markets. it is not necessarily a carbon copy of other qe experiences. the euro is very different. the economies are disparate. i don't think it is going to be straightforward as it was in the u.s. i think what will happen is, there will be winners and losers. i think the sector or the index players are not going to outperform those that the the sectors right. jonathan: johnny, thank you very much for joining us this morning. up next, will the euro meet the dollar? the euro dips below $1.05.

a stronger euro this morning. we are up 0.7%. ♪

jonathan: good morning. we are 30 minutes into the training session for the european equity markets. the ftse 100 up by 42 points. 0.6% higher. the dax down 0.1%. the story in the fx market compelling. the euro, stronger this morning. the bond market, as you were. record low bond yields. i'm looking at an irish 10-year with a yield that momentarily dropped below 70 basis points. the 10-year in spain headed towards 1% flat. remarkable moves and the bond market. that continues. for now, the top stocks stories

with caroline hyde. caroline: even as the ftse is on a tear two u.k. stocks are feeling the pain this morning. down 15%. it is our rights issue that we knew about. perhaps going to the top end of where many expected it to. they are selling 550 million pounds worth of shares. stocks dropped the most since they first announced that rights issue. their financial results reflect the u.k. government contractor 1.3 billion pounds of onerous contracts and other charges. they are trying to cut their debt. they are selling non-core businesses as well. they are getting out of the leisure business in the u.k. they are getting out of the southern rail in australia and the majority of their private sector business.

serco unfortunately this doesn't seem to be the right stock. i'm going to bring you home retail group. not looking pretty today. fourth quarter sales like for like down 5%. home-based like for like sales down 0.9%. worst performance on the stoxx 600. k+s, a bit of green. better than expected earnings for this year. 2015, they say, will be better than last year. higher prices as well as a stronger u.s. dollar is helping k+s. jonathan: thank you very much. home retail down by just over 6%. in the bond market, you know the story. record low bond yields. the 30-year in germany remarkable stuff.

just last week, had a very low yield of 1%. now it is just 65 basis points. we are down again this morning. the rally continues. ewald nowotny telling me yesterday that one might avoid buying yields -- buying debt with a negative yield rather by buying longer maturity. yields even lower on the german 30-year. the big story in the fx market is that parity call. the euro with the dollar. 12 months ago, it may have sounded outrageous. this morning, it is just five cents away. our next guest is calling for it to happen by the end of the year. we are joined by the man who talks 2014. he is ing head of fx strategy chris, great to have you with us. parity call sounded crazy when we or at $1.40.

you've got a year-end call for parity. are you going to adjust that? guest: i think we have to. this happened quickly. there was a really aggressive scheme. we are four days into the qe scheme. bond yields start falling across the curve. the dollar rate story, which we promised our dollar strength on, that hasn't kicked in yet. it could kick in in the next 2-3 months. jonathan: do you think the rate differential story is going to make a difference? the fx market seemingly moving ahead of anything there anyww ay. is that a story we could see play out? guest: i don't think so. what we are seeing at the long end of the curve is eurozone money market rates. the future is posing to a new low as well.

i think if those u.s. rates go from 1% to 1.5% in the next three or four months, there is a compelling's case for a stronger dollar across the board. jonathan: chris, last year, the ecb wanted a weaker euro. they've got it. i remember the yen spiraling lower. people are going to be shouting at the screen right now. if mario draghi was watching he would be angry with me for asking. $1.40 to close to one dollar in a quick the obama time. when does it get to week? guest: a 10% adjustment over a two-month perio is a bit too fast. the difficulty is for the ecb they've just put out a new communication strategy. i don't want to be distracted from that at all.

the euro is moving a bit too fast. would that are just some curtailing? i don't think they want to distract the markets. that's a little bit difficult for them. jonathan: when i was in frankfurt, it was the elephant in the room. we talked about the success of qe before it even started. it was a victory lap before anything has happened. if you could call a bottom for euro-dollar, what would the bottom be? for this year? guest: maybe 90. you saw the low of 85 back in 2000. down there is a stretch. we value it around 1.25, 1.30. we see some large corporates as well -- that is brilliant on the three-year. probably the larger corporates are increasing dollar hedge ratios. jonathan: the dollar and the

speed of the move for the dollar index, we know a large portion of that is made up by the euro but the dollar has been phenomenal as well. what does this mean for emerging markets? what does it mean for corporates in em? guest: that touched 100 yesterday. perhaps that is triggering some profit taking, some consolidation. emerging markets, part of the problem with yield so high in russia, brazil, and turkey, it is quite expensive to hedge. they found last year in russia that it is too late to hedge when the ruble is sold off. when you have loads of event risk coming through in brazil over 2-3 months, whether they are going to roll the intervention program at the end of march, we think it is worth

paying up over the short term. dollar-real has been up to about 3.15. it could push up to maybe 3.50. jonathan: from brazil to turkey. it is not just a dollar strength story. it is a president that wants to be the central bank governor. what is your take on turkey right now? what does it mean for the lira? guest: the lira has been recovering. the central bank was looking at lower inflation, improved domestic fundamentals. and a narrow current-account deficit. the problem is, we've got elections in june. the president has some interest in getting lower interest rates ahead of the election. some comments he made last week about who the central bank was answering to, i think a nerve investors. they had a meeting yesterday. we probably should expect some more conciliatory remarks.

what will the ecb due next thursday? we've got a fed meeting on wednesday. if they cut the rate if they seem to be forced into a rate cut next week, that suggests they are letting the lira go. jonathan: turkish politics something to think about. british politics another thing to think about. looking at sterling against the euro policymakers will be happy to see the pound go through 1.40. what is the call to make here as we approach the election and you see the pound getting stronger against the euro? guest: we think it could go of october. -- we think it could go on that lower. we haven't had the dollar story coming through. i don't think we've got certainty in sterling. sterling is performing well against the euro. if we have strong support levels in cable, we could be looking at

lows around 1.42. sterling is going to fall against the dollar. perhaps sterling has come of it too high too quickly against the euro. it may start to consolidate against the euro. jonathan: we could possibly move to 1.40. does that make mark carney's job easier? guest: i think it is interesting. his predecessor wasn't a verse to talking sterling down. interesting now, we've seen a pickup. maybe 7%, 8% over a short period of time. governor carney is speaking today. it will be interesting to hear his views on sterling. some inflation reports talk about cutting rates or hiking rates. sterling has appreciated quite quickly. maybe he will choose to emphasize that rates don't need to go up. jonathan: i have to go back to the core of this segment.

you were out front on this call for parity. last year, calling for parity at the start of the year. a lot of people weren't quite there. it doesn't sound like a big call anymore. what is the big call now? guest: i stink -- i think it is further dollar strength. the dollar has come a long way. if you look at 20, 30 years, cyclical is the case for the dollar story. u.s. corporates or banks issuing corporate debt swapping dollars, there are lots of things going on behind the scene. i think it is a very rare divergence in monetary cycle, something that is generational. jonathan: chris turner, thank you very much. ing head of fx strategy. a quick check in on the bond

market for you. you've seen the headlines. spanish yields, record lows. irish yields, record lows. look at that irish 10-year. 0.69% unreal. check out the german 30-year with a yield of 0.64%. the phenomenal bond market rally continues. we will keep it on germany. earnings in focus. we will break down results from lufthansa and hugo boss. ♪

jonathan: good morning and welcome back. let's have a look at the banks. santander and deutsche bank fell short in the second round of the federal reserve stress test. here with more is caroline hyde. it is not an outright fail. there's a bit more nuanced than that. caroline: it is quality, not quantity. of the 30 banks that were tested last week, all of them passed in terms of having the right amount of capital buffer when we get a nightmare scenario. property prices slumping, stock market down 60%. all of them can weather the storm. now, did you measure it properly? deutsche bank and santander don't seem to have done it. deutsche bank has been

criticized for significant deficiencies across risk identification, measurement, and aggregation. santander widespread critical deficiencies across capital planning processes. they are saying, you are not measuring it right. we don't like the quality of your assessment. therefore it is a fail. you are not allowed to pay dividends to your parent company or do buybacks. 28 of them cruised through, some of them by the skin of their teeth. very critical for citigroup. bank of america got a little bit of a rap on the knuckles. they were conditionally approved. resubmit, but you are allowed to give stock buybacks. jonathan: this is something we've seen before. it is not unprecedented. what have these guys got to do next? caroline: they are working. santander has said, we understand we have meaningful

work to be done. we are to try to reinforce our governance. deutsche bank says we are committed to strengthening enhancing our capital plan process. they also point out, the u.s. 5% of our global assets. only the first time we've had to do these stress tests. deutsche bank just got added to the club. they say if you go back to the quantity measure our common equity tier one ratio was well above the rest. we have 28% in some situations. they are trying to point that they have done well and they are hiring to improve control functions. there is criticism being leveled at them. there is criticism in terms of the way they ran the stress test. what about the rest of the banks? this is what is coming into play. one of the federal reserve people have said, if all of them pay out what they want to do in

terms of dividends and share buybacks, that is 60%. is that something we are comfortable with? are we comfortable with jpmorgan only just about passing the test? they want to boost their overall paybacks. they want to give back $6 billion in share buybacks. morgan stanley raised its dividend 50%. a lot of them want to give a lot back to shareholders. shareholders demand them to do so, but basically, many are feeling, were the stress tests stressful enough? jonathan: caroline hyde, thank you very much. not the greatest news for deutsche bank. also, lufthansa and volkswagen. different story over at hugo boss. investors appear skeptical of an outlook for profit. let's get out to hans nichols in berlin with the german story. what are we expecting from vw

later? give us a break down on hugo boss as well. hans bank the key with volkswagen is, what is their profitability? there is an investment that they could get -- an estimate that they could get to 3% for profitability. when you compare that the audi, their margin is 8% to 10%. vw's goal is to come in around 6%. sales were basically flat last month. folks like an wants to take it to toyota -- volkswagen wants to take it to toyota. we will see what they have to say about currency. they have big operations in brazil and russia. lufthansa they did a little better than expected. they are giving forward guidance for 2015. when you look back at 2014, they announced that they weren't going to be doing a dividend use year and there isn't a lot of

long-term optimism. they have some strength in their catering business. hugo boss, your favorite, their guidance is for 5% to 7% growth in 2015. that is disappointing analysts. that's why we are seeing hugo boss trade down a little bit. my advice go out and buy yourself a hugo boss or by your producer one. jonathan: do not blame me. you need to get out there in berlin and go shopping. thank you very much. coming up, the greek economy. it is sinking. but are the votes sinking as well? more on the safe havens for the world's most valuable fleet. ♪

jonathan: good morning and welcome back. the save haven in greece of economic and political storm >> the country's economic storm, the shipping magnate continue to rise. for more on the world's most valuable fleet is tom metcalf. the greek shipping industry there was some concern about this before the election. these guys are doing all right. tom: absolutely. this is one area where greece is a world-class industry sector. these guys are doing all right. at the moment, tough times, but

these fortunes have been built up over decades, not the last few years. an extraordinary and of wealth has been generated. the fleet is worth more than $100 billion. these guys have $8 billion of net worth themselves. jonathan: as you look at the rates, what is the attitude towards these guys? we celebrate them in london. we celebrate them in the united states? do we celebrate them in athens? tom: i was there for a week and i think the angry side of that is pretty obvious. they get pretty frustrated as a general sense. perhaps they are not paying tax, etc. the interesting thing to look at is the new government. they had pretty aggressive rhetoric that these guys need to pay more. since then, there has not been much about that. i think they may be trying to work out what to do with these guys. jonathan: if i was a millionaire

in a country with a communist government i would be concerned. i haven't heard one of these guys and please correct me if you have, get on the record and say, this government is good for the country. what have you heard? tom: there is a bit of concern. greeks liked to be based in their own country. there are a lot of benefits for them. from a business point of view politically there are more business friendly governments. they are not that worried because the shipping industry can just move everything offshore. jonathan: have they been doing that? tom: not yet. that is what syriza recognized. what can they really do? they need to be in discussions with these guys rather than laying down the law. jonathan: tom metcalf, thank you very much for joining us this morning. that is almost at four "on the move." for our viewers, "the pulse" is

coming up. we will continue the conversation on these markets as well. there will be exclusive interviews you don't want to miss. first, mike lynch. then, the montclair ceo. that is on "the pulse" coming up next. the bond market is the big story. it always is. the 10-year in spain down by five basis points. the yield in ireland, check out that. the 10-year yield in ireland below 70 basis points. 0.69%. look at the german 30-year. the yield goes lower to 0.64%. i spoke to ewald nowotny yesterday. he said you want to avoid negative debt because you are worried about accumulating losses. the option is to buy longer maturity. that is the big theme in the bond market. the equity's here in europe, off

a little bit. here in london, a nice bit of a pop. for the euro, a stronger euro this morning. what is that about? tell me on twitter. ♪

francine: ecb exclusive. negative bond yields are just temporary. the forecast for inflation and the euro. deutsche bank fails the stress test. citigroup passes out right. we talk retail and spending. welcome to "the pulse."