stock, global markets deliver their worst quarter since 2011. face-to-face with ivan, glencore is said to be meeting with investors to smooth concerns. delivering ther, first event in california. ♪ guy: good morning, welcome to countdown. i am guy johnson. nearly over, the worst quarter since 2011 for investors

-- it has been a torrid time in the market. let me give you an update to my sense of where we have been over the last three months. , is goinghe last day to be a good one or are we going to finish on a dismal note? we'll talk about that. let me give you numbers, first of all. the s&p 500s -- let me show you this column. finishedwhere we have the downside on the order. on the currency adjusted basis, is nearly 10%. over here in europe, 11% to the downside. if you're looking at the other market, volkswagen is down. a bit has done very well, of an outperform or someone argue. down only a mere 9% this quarter. how are we going to open today? that is the big question that everybody is from to figure out. let me show you, let me give you a heads up on where we see futures in the fair value

copulation. green on the screen for the dow, we have a fair value copulation there. we will see how the european markets ultimately open. we will give you a clue on that at 7 a.m. london time. when the futures open, just in pictures, let me show you what it looks like. you can see the massive down the draft that we saw mid-august that really damaged the equity market story. we will show you that in a minute. in the meantime, let's go to julia, how is asia performing? good morning, a much brighter day here in asia than what we saw yesterday. this is the picture on the last trading day of the month and the quarter. we are seeing quite a lot of buying, not a great quarter at all to for asian stocks. they are on track to post their worst order in four years. 16% over the last three months. the shanghai composite has had

it's worst quarter since march 2008. ae hang seng index is having worst day, and a worst quarter. in five years, things are looking a lot brighter. a buyer confidence, something and i go away. some say they come back with a vengeance in october, and we are seeing buying on the last day. consumer goods really leading the way through here in asia him and that is because we have seen a big pickup in automobile stocks across the region. china cutting the tax for those purchasing auto vehicles. you can see in japan, leading the way there by 18%. but we have also seen some big buying coming through from a lot of the chinese carmakers, which here hongtric cars kong doing incredible well -- up by almost 6%. and we have also seen a good pickup coming through from toyota, which is up by about 4.5% in japan.

and the motor company, the eighth share listed here, look at that. they are up 33%. certainly, a lot more buying coming through in the region. and also, of course, a pickup in glencore -- the hang seng index of 1.6% in the last afternoon. a big rally on the back of those games we saw, in the u.s. in the late trade yesterday. but certainly, a quarter of investors would like them to close the book on and see the back of the september quarter. guy: i think they probably would. back in the year, they help it will deliver. maybe we get that rally, juliet sally in hong kong. standock that really does out in hong kong trading, and that is glencore. shares are up 14%, tracking the london session yesterday. let us talk about what will happen today, in the future for this business. will kennedy joins me now, investors get face to face

today. there we some sort of meeting on debt. what we know about what the company is saying to investors? this value that ec carried over to hong kong, it will be more of the same -- cutting from investors that everything is on track. money from asset sales going quickly, and hopefully that will be enough of a message to see the rally continue. seeaps more importantly, to the cost of insuring that come back down. guy: that is not normally what you would see, people are more worried about the myths and they are the long-term. some big payments coming up on the debt side. debts coming big is but liquidity as well, it three years out. what people are really worried about the short-term, you mentioned the quarter, it is copper. copper is now set for its fifth monthly decline come and

ultimately, glencore is very leveraged. you know, that is going to be key for investors -- only so much glencore can do. guy: you think this scare will change the nature of glencore in the more medium and long-term? and change the way the company the kind of with -- way it develops strategies from here? well: it is interesting, isn't it? during the financial crisis, we saw a similar scale, to have the safety of public markets, now it is public. it is having a different but equally scary fight. what makes it next, we had this talk that is going very hard to see him in to be honest. i think they wanted to become a more stable company, do a better job of explaining exactly how the operations work. guy: why do you think it is unlikely to see the mass act up in some ways?

,ill: the management owns 22% they are not going to do all the money themselves. it will still have to find a huge amount of money from somewhere else. it is not clear will come from. guy: do investors believe the model works? the idea was that the trading arm added to the mining operation that was critical. will: i think that probably still holds. but i will say two things. one, it was not much of ahead. it is very hard to change. the real thing i said earlier, it has been a very long in copper. smart asader as ivan knows that. guy: he has been the smartest guy in the business, maybe or maybe not? history will judge that. can we assume that the troubles

that delays in berg is burg isncing -- glazen experiencing, is it indicative of other things that are happening? will: both of those are true. it is unique because it has more debt than anyone else. it is suffering from that. and it is unique because it combines the trading house with this mining company. across are saying wrists the commodities space, you saw the story earlier this week. forced to spill itself into. and we are seeing a lot of stress and the oil anglo-american has had a shocking week. which is been largely hidden. two days ago, it was down 10% in one day. guy: thank you for getting up early and coming to see us. we are back as we continue to talk about the global commodity impact, has had such an as he was mentioning in the last quarter. we are not quite done with a quarter yet, but he still

happening in the resume. what are we watching at 7:30 a.m.? the french budget, the french budget is out of that time. are we going to get below 3%? that would make brussels and berlin happy on the budget deficit side of things. we understand that that could be the case 2017. later on, at 8:55 u.k. time, we get cpi time. havet 9:30 u.k. time, we -- technically not the blue book. it comes out later, some confusion surrounding this. but we are going to get some revision data for previous years, and terms of gdp which could upgrade the story. at 10:00.d cpi data willew york fed president speak, and janet will speak this evening.

bullard will james be addressing the policy conference at 8 p.m. u.k. time. the market will be paying attention to that, as ever. let us shift gears and talk cars again, this time not volkswagen. but suvs and tesla. they have not gone together. telsla has finally delivered six of them. a big unveiling in california overnight. let's get more on the model x. caroline hyde is here. middle of the night california time, we have six delivered? caroline: suddenly, we start to see the first one delivered. they were unveiled in california, were they have a big factory outlet there. interestingly, this new model is aimed at people like you -- the family. and people like me, a female. women by more than half of small suvs. you have the kids in the background, and if you happen to

have $132,000, which is the base price, you can go 250 miles in this week with one single charge. passengers, you can put your surfboard and skis. all of your children, if you do not have that many, meanwhile, 155 miles per hour -- you can get to 60 miles per hour in three seconds. thing, how safe this thing is in accident. i like this, they are coming out on diesel-gate. this is a great time to sell 80 cars.issions you will not be breathing in. air by thel grade vehicle. caroline: phenomenal, and it is

beautiful to look at. a have these doors you will hear just the reason behind them. >> the reason they created these doors originally come up with her to solve the problem -- which is how you access the third row if you have child seats in the second row? button.press this the seats go forward. and i can step directly in. you can actually just stand right here, you can step into the card you want. you can put your child down in the child seat, it makes a huge difference in terms of back strain and comfort. it also looks cool. so, yeah. caroline: it looks cool. what is so interesting, you can -- the doors respond to the it if you are tightly squeezed in a parking spot, they still managed to uncover a themselves. guy: they need to deliver a few

more. caroline: these are the founders series friends and family of elon musk -- anyone who is close to the company. he is inspected them. the next series is a signature series, you have to pay up $40,000 deposit to reserve them. 55,000 of to sell those models across the board. they are putting in production 55,000 this year, that was a slightly missed target. ws to fit youro family. how many they can get off the ground this year -- guy: it sounds a bit like elon musk. caroline: this car has this biggest single piece of glass on any card known to man. this is why they made it so complex. interestingly, i understand that there are already 25,000 models

on order. you have to wait 12-18 months, but they need to start turning these cars out. needlesthey need to do it swiftly and smoothly. guy: caroline hyde on tesla. surly making headlines, what else? coming up, why the bank of england governor thinks the markets should be worried about climate change. mark: climate change become the defining issue for financial stability, it may are to be too late. mark speaking at lloyds yesterday, we will analyze his speech delivered last night only come back. also coming up as well, the double-digit recession that may have never happened. what could today's major decision tell us about a rate carney.m dr.

we will talk gdp after the break, as well. ♪

guy: 7:17 in frankfurt. let me tell you the stories we do know this morning. the stock markets are on track for their worst quarter since 2011. the old country world index is concernssince june 30, over china away on investor sentiment. the shanghai composite slumped 29%, the worst performance of any major index this quarter. output industrial ultimately fell for the second straight month, the slump rate is concerning because it might have dropped back to a recession. boj confirms that the web and marguerite we will happen tomorrow. we'll talk about the event. and elon musk has handed over so suv in california, he did

in the early hours. depending on your point of view, tesla now has two all electric vehicles in production, it features double hinged doors and energy breaking and audio speakers. it also provides medical grade care in the cabin. facingsurance is existing climate change policy. that was delivered by governor mark carney last night. at a speech at lloyd's of london, he urged g-20 nations do more to combat the financial risks of climate change. mark: there are three channels which, change can affect financial stability. physical risks, the impact familiar to everyone in this room. the impacts today on insurance viability, and the valuable financial assets from climate and weather related events that damage property or disrupt trade.

thesecond liability risk, impacts that could arise tomorrow, parties who have suffered loss or damage from the ages fromek dam those they hold responsible. and finally, transition risks. the financial risks that could result from this very process of adjustment to a lower carbon economy. guy: speaking last night around the corner at lloyd's of london. jeremy corbyn used his first conference beach to call for more government spending and the end of austerity. he also denounced former labor minister tony blair's invasion of iraq. programs.r weapons face veryy, we different threats from the cold war ended. i have asked our defense secretary to lead a debate and review about how we deliver that strong modern protection for the

people of britain. but there's one thing i want to make my own position on absolute there, and i believe i have a mandate from a election on it. i do not believe that 100 billion pounds spent on the new generation of nuclear weapons to him about a quarter of our defense budget is the right way forward. [applause] britain -- it believe that our country, i believe that our country should honor our obligations under the nuclear nonproliferation treaty and take the lead in making progress towards international disarmament. guy: continuing the conversation, you're up to speed. in the next what you for hours, a slew of data, let us hope the business investment -- you will see smith and upgrades to previous years gdp numbers. job rates ahead of the rate strategy, good morning.

let us start off with the upgrades to gdp. jeremy corbyn talking about the end of austerity, they have evidence? >> party had some revisions that take us to do thousand 13, some fairly meaningful one. today, we hear what's happened since then, like the to the other revisions as you say. from the chancellor's point of view, that points to the recovery being somewhat stronger than with priestly thought. and also suggests probably that the ability of the government to raise tax receipts going forward is enhanced, so it might will mean a public finance expectation for the years to come. a marked down a bit and subsequent forecast, so it is good news for the chancellor. guy: one of the things that has been central over the last few years is negative monetary policy remains loose while we see fiscal policy remaining

relatively tight. if the economy is getting back on track, of course, you may not need to be so tight. does that mean the monetary policy can be moving? david: i think the implications are harder to assess, not least because they have long had their doubts th. \ if you look at inflation reports looking backwards, you see their view that gdp has been stronger than they were previously thing. this will come as a surprise to them, effectively, it is also reflecting an increase in supply capacity, the amount of slack that should not be seen a different light of the bank of england, all his people. and given the slightly more relevant forward-looking things on the radar at the moment, this probably does not mean much for policy, i don't think. guy: what does it mean for policy at the moment? you have data out of the eurozone later on, inflation flat on his back. see janet yellen saying

she is delaying rate rises. where the market is in terms of pricing u.k. interest rates, over the coming years, you can see they are a lot more worried than the mpc has thus far indicated in the rhetoric. there's a lot of talk about the labor markets improving, some members voting. and yet the market is not pricing the first move until the end of next year, more than 12 months from now. a big divide that tells you some of these external worries and some signs as well in the domestic -- a slight loss of momentum on making the market very -- guy: you look at that spread. is the market going to come up? or is the banquet to come down/ david: that is the question. they do not move them around every five minutes as the markets do. it is not unusual to have a discrepancy between economic consensus and market indications.

it is unusually wide at the moment. we'll have to wait and see. the data, if we just restricted to the u.k. at the moment, there has to be an endorsement of the expectation. e inflation,the which is likely because the oil price. infected in the wage price, and is yet to be seen. if there are bigger problems in the global economy, companies are much less likely to sponsor to higher inflation by pushing weight is up. so there are a lot of concerns at the moment, but the market has made its my death. any sisi soccer data to justify where it is. if we see on going strength, we will have to see a bit earlier move. guy: the fed has made it very clear that they are watching asset prices, what is happening in markets. today's the last in the quarter, which is seen the worst for equity markets since 2011. how is the potential?

how does the relationship work? what it think of tells them, the individual quirky reasons of why that happened. it has to do with the wider commodity moves and everything else, the bottom line is that they have been heavy since april and may. their off 25%, that is a huge drop in wealth and a huge drop in the value of obviously corporate, and there havefore it means they should inject more quantitative easing's. but it will hit confidence, and will hit sentiment from it might hit investments because of evaluations of those companies. it is part of the whole matrix the bank has to look at. guy: thank you very much for getting up early. at ubs.ith had don't mess with texas.

in the lone star state, a county is suing volkswagen for raising pollution levels. this is setting another deadline. we would talk about the stateside struggles we come back. --we will talk about the stateside struggles, when we come back. ♪

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guy: it is 6:30 in london, here are the stories you need to know this morning. the stock markets are on track for the worst quarters in 2011. the all country world infects is index all country world is down 11%. sunkhe shanghai composite 29%, the worst performance of any major index this quarter. glencore has rallied as much as 80% in hong kong trading this morning, getting back to a 7% jump in london yesterday. the company said they cannot withstand current conditions, and they will meet with that investors today. output industrial

ultimately fell for the second straight month. this is concerning, the couyntry might have dropped into recession since the premise or took office. his view was up tomorrow. let get back to the top headlines, last day of the third quarter. and it is not been a good one. the worst since 2011. let's get some facts and figures with airline hide. a phenomenally volatile and somewhat market value eradicating quarter it has been. the third quarter, checking out the old country world index, down 11% in the third quarter. as you are sinking the worst we have seen since 2011, the global stocks -- you know the reason behind it. china, what we saw over there, the fact that the government was clamping down on margin trading, in particular. leveraged trading in equity markets, not to mention the slowdown in the economy.

and the u.s. slowdown in the world economy by holding down the rate rise, but the worst hit were the asian stocks. worst outomposite the of the developed benchmark global gauges, it's sunk phenomenal amounts in the last quarter. near one third of its entire value wiped out in the third quarter. clearly, we see the likes of the record money saw a being pulled out of the philippines, thailand, this sort of scenario is seemingly still continuing. what is so interesting is the valuations on asian stocks, they are still very high. when you dig into it, equity on the mainland industries in asia traded a median of 49 times. that is triple what the s&p 500 trades at a valuation of 18

times. so still seemingly overvalued compared to the rest of the world. let us have a look at how european stocks fair, we are seeing it down some 11% overall. we're also seeing volatility spikes across the board. we see the most volatility in the european stocks in three years. this is the fear index, the focus on u.s. stocks as well. -- but today, up 39% really did show how much volatility came into the system in the third quarter. in thele, u.s. stocks s&p 500 had the worst quarters in 2011. it sank almost 9%. if you spread it out over a wider gauge of equities, longest losing streak since 2006. we are seeing year upon year these records being blown out of the water, analysts are currently downgrading their view on where profits will be for global stocks, for european

stocks in particular. we saw them downgraded to less than 5% in terms of profit growth down 6.5% at the end of the second quarter. fairly, a risk aversion -- the worried about probability. and we are seeing what is a massive hit in the third quarter. a slight rally for u.s. stocks yesterday, but still, we can see -- guy: thank you very much. the big picture, we would rather forget it. but it does not seem like their problems are over anytime soon. let me give you one example, a texas county which includes the city of houston is suing volkswagen for $100 million for cheating on emissions controls. it is the first government suit from the scandal. we are not done by any stretch of the scandal. us, are we ofoins any idea of what the litigation

is? hans: can you get a size of the iceberg from the tip? harris county includes houston, here is their map. here is how they arrived at $100 million. they said $25,000 a day sold in $100s county for the time, million for 6000 vehicles. cases,ith ago for some we get a sense of the kind of litigation that volkswagen is going to be up against. the german press is reporting there is a big board meeting today, trying to figure out whether next up will be. have a conference of plan, quickly, therex are reports that will flag and a technical fix shortly. the backup to all of this is of course litigations that congressional committees in the states are demanding answers. a want document produced by october 13. when you take a look at where

the cars are being sold, i will give you a list here. spain, netherlands, italy, belgium -- that is where cars have been pulled from the market. we also have potential criminal litigation in sweden. here is one develop it in the volkswagen group, yes to the restructuring debts they had the board meeting today. we have potential new head for the porsche manufacturing, that is of course where the ceo came from. he is all over. according to people from their with the matter, he will be taking over the porsche. as a profit center for the automaker. guy? guy: news cycles coming up quickly, give us a sense of is the still front-page news in germany? hans: yes, absolutely. you cannot look anywhere without seeing the latest on it. is it top of the full still? no, this has been leading coverage of all the broadcast. just to give you a sense of how much the country cares about it,

the public broadcaster was reporting in its main news bulletin that the city of w olfsburg, they had some 70,000 employees, reporting that the city is imposing basically a spending freeze. they're concerned about what will happen with revenue coming in from the vw group. us: hans nichols joining from berlin on the vw story. a big day economically, lots of news to digest. let's get thoughts of our guest hosts. david owen, i want to start with cpi. we will have that out later from the eurozone. it will be flat. david: on the headline, yes. guy: we are coming out of a quarter that is negative. oil prices, commodity prices are down. and when the ecb looks at the

number, how much would they look through the commodity price story rearview mirror? the base effect? david: the first thing is core inflation. if it means flat at that point, that is fine. there is a separate measure which takes out text changes, as well. that has been converging in most countries towards, in fact we saw inflation on that measure in countries picking up. a will be looking at that, too. they do not want negative inflation rate. they will be hoping inflation actually turns up. guy: what happens if it does not? david: if the economy is doing really well, they will look through it. at the end of the day, they're looking out over 2-3 years. some way in the future, if the economy continues to pick up, we have european sentiment indicating that the consistent

gdp for the quarter, even germany still growing. despite all of the vw issues. still showing momentum, and if that continues, they can again look through the inflation risk to some degree. but i was in the risk in this environment, the ecb have to speed up bond buying. we'll get more guidance on that in december when heather meeting. guy: when you look at france at the moment, you mentioned germany and it struggles with vw, we will have a french budget later. indications are that we see a 7.3% gdp story. it is going to be interesting, and as much as it will take the pressure off. david: france is at least generating growth. are we underestimating what is happening? a reallyries interest, italian gdp is 9%

below. and the four indicators have actually turned up quite positive. the indicator i missed earlier, the bounce of really being strong, also spain is doing it. and spanish gdp has been around 4.5% for quarter for a long time now. on this measure, italy is now outperforming germany and france. it has had the most consistent policies, if you look at what happened to lending rates since qe kicked off. at the end of the day, countries like italy which are fairly large could certainly outperform expectations. and france is tendency to do recently well. guy: is altogether for me. there is this sense that we will get more from the japanese, more from the eurozone. is that assumption correct? david: i think japan, certainly yes. for the eurozone, they have to do more. they will do more and that will be announced centrally in

december or the latest in march of 2016. at the end of the day, growth in the euro is picking up. it is on the upside, things are moving the right direction. think there's a sense in the central bank that they have to lean against the reserve story that is coming out of the paper for saudi arabia and china, a selling of assets -- which has created a tightening in some ways. and global liquidity is beginning to contract him isn't something that features high on the radar screen? david: more so in the u.s.. the numbers are currently low. selling treasury yields would back up, but they have not. guy: the curve moved? david: not as much. but there will be a recycling of cash, and i think the eurozone will be a fairly big driver of

trends locally in capital flows. guy: david owen stays with us. he is here for next hour. coming up, could the u.s. government shutdown yet again? congress is getting down to the wire on this issue. we will tell you what has to happen to keep the lights on. stay tuned for that story, up next. ♪

guy: 6:45 in london, if you're just waking up, these are the stories need to know. stock markets are on track for the worst quarter since 2011. the all country world index -- investment sentiment, the shanghai composite dumped 29%. the worst performance of any

major index this quarter. glencore rallies as much as 80% in hong kong trading overnight. it track a 70% jump in london yesterday. this is after the country said he can withstand current conditions, but it will have debt index, according to people familiar with the matter. a offer the suv in california. created thee fittiest suv ever. it is five stars every category. [applause] guy: weirdest wondering here on set whether that actually looks like an suv? let us know your thoughts, send us your thoughts on twitter. the united states government votes on whether to fund the american government today, leading to the federal shutdown. former white house correspondent hans nichols is standing by. here we go again, will congress let the government shutdown one more time? hans: not this week, guy.

i have done the story so many times, i could do it in my sleep -- even though i may actually be awake this morning. here is what we have come of the senate passed a procedural motion a couple days ago that will likely be passed today. the house will pass it, but here is the hiccup. it is a continuing resolution which means it only goes through december. we will have the same fight in december, on whether or not and how the government will be funded. the big difference since december, house speaker john boehner, who announced his resignation last week, will no longer be speaker. you have a bigger internal fight within the republican party, and will be closer to the little contest, so that will be a little more infused in the politics. it may spell into capitol hill. you have interesting dynamic in the senate, that is reason to be pessimistic. the reason to be optimistic, looks like mitch mcconnell and speaker boehner as well as present obama are at the beginning stages of a last-ditch plan before boehner leaves to

have a two-year budget process. they're just at the beginning of the negotiation. here is what mitch mcconnell said yesterday. he said we would like to settle a top line for both years so we have a regular appropriations process. the president, speaker boehner, and i talked about discussions, and i expect them to start very soon. to theuld be a capstone john boehner era. it would be one last chance for john boehner to have some sort of established order to actually fund the government. this would only be for two years. but at that point, both sides like their chances where they would be with who is occupying the house and you is occupying congress. guy: very much wide-awake, hans nichols in berlin. i guess the shutdown for the american government could begin news for volkswagen. it would give it more time to get its act together stateside. many those in volkswagen are looking at the story things we

good thing. i joke, of course. is talk about what is on bloomberg.com. david owen is still with us. volkswagen still front and center. a lot of reader appetite for obvious reasons, it is not going away. towill not go away, much their chagrin for many years. the stories today are looking at the upcoming sales data for september in the u.s. analysts are divided on whether the w will be the only manufacturer to actually report a monthly decline in sales. sales in the u.s. are pre-strong, rising 13% this year. so, you know, vw has struggled in the u.s. -- the world's biggest auto market. have been declining for two years. and the story points out that hybrids and electric's cell three times is more units in the u.s. than diesel. so it is a small piece of the pie to start with. guy: we were talking about

tesla, and the new suv. it doesn't even look like one. what kind of opportunity, these are going to be two stories that fit recently well at the site. you have elon musk coming out, i'm surprised he did not make es last vw's woe woes last night. tim: i mean, you have to wonder the extent to which this is going to be an opportunity for electric vehicles and hybrid vehicles. you have to think that it is. honestly, volkswagen is talking about clean diesel -- which is much worse and we thought about. and clearly, if you want something that is when to be clean, will probably have to be electric. you can debate is it coal that is generating electricity? that is a separate debate.

clearly, the market is moving towards electric. huge handhas a fan base. any story we do has a huge traffic. denmark will remove tax subsidies on electric vehicles, going actually the other way. which is actually going to be a big cost increase for tesla and every other manufacturer there. guy: david, you have volkswagen and the diesel scandal -- europe investing hugely in diesel. you have elon musk launching this new model x. and mark carney talking about climate change. the central bank is getting rth into thence wo story come as well. when you look at the economic picture in front of you, thinking about how things change and how economies shift, you get the industrial revolution moments. is this one of them?

could this actually be one of those processes that significantly changes? carney'sthink mark speech was very interesting. andng off of the w issue everything else, at the end of the day, he was speaking at lloyds of london. there is more momentum behind that. honestly, all of these risks are out there. he was making a point, if we do not act now, these problems will be much needed to resolve in the future. we need more momentum behind issues. guy: we talk about tipping points, moments in time when you could realize that actually we are moving in an accelerated fashion. a completely different kind of economic paradigm, it looks like yesr, it feels like a car, it has wheels that come up and doors that come up in a complete -- arerent fashion, how

we underestimating actually what we are seeing? tim: absolutely. i was the, this is my opinion. but think about it, the smartphone is less and 10 years old. public information. these things happen far faster than anybody expects. it was not that long ago that the german utilities were saying look, renewables are not a threat. and behold, we now see german utilities saying they're going to spin off coal and we're not interested anymore. will become a renewables company. guy: when you look at [no audio] if you are to look at the economic model that says we need

to think about how we invest, we have an economy that is on his back in the u.k. k and the eurozone. you make big investments into areas that you hope the future will sort of reward. are we -- is this the way that mario draghi should be thinking? let's invest a ton of money into a lot of things. let's buy all of the stuff and maybe start to generate an investment story. david: it is interesting you say this. you have a plan that was there to shore and get private investment, the eu more generally. the numbers he was talking about, all the recently large, were not big enough. and something that does not really discussed that often, we should be out there -- europe does invest more. you can argue each need to do more in the u.k. with interest rates so low, you can argue it is very easy for government to fund this going forward. yet, i think there we more demand.

from the stock market point of view, there is much to do with investors and clients of institutional investors to be ethical. that is a huge structural change that is happening. tim:, investments, you saw the interview we had with angela merkel's chief of staff. she said to the german automakers, look, the scene what tesla is doing. guy: elon musk said the germans should be doing it better than him. they have better engineers. tim: you remember the frankfurt auto show that they unveiled that porsche that charge in 15 minutes. guy: i'm assuming they will. and if you're sitting in a showroom, you want done. tim: under german law, i think they have to roll out some kind of plan about how they will resolve this in the next 24-48 hours. i cannot remember the deadline. we're expecting relatively soon

what their plan is to resolve this. guy: thank you very much indeed. great stuff on the site. bloomberg.com. david owen stays with us. a big day for mario draghi, could the inflation debate come front and center? we will tell you what you need to go on the eurozone's cpo. i. we will tell you about that and much much more. see you in a moment. ♪

guy: taking stock. global equity markets deal with their worst quarter since 2011. face-to-face. glencore is said to be meeting with investors today to soothe concerns over its debt. and the x factor. tesla inuv from california. welcome to "countdown." i'm guy johnson. let's talk about what the final day looks like you're in europe, what kind of session can we expect? agers on the front foot. let me give you an early read on

how european markets will open. we think it will be fairly positive. this is a fair value calculation that we think the euro stocks are. 1.4%, the cac by up by 1.6, the dax in germany nearly 1.8%. nice numbers, very much on the front foot. but let me get the camera cut up a little bit and we will talk about the quarter. ftse 100 down 9%. very dismal. period. it has been even worse for asian equities. let's find out with the last day of the quarter looks like with juliette saly. juliette: good morning, guy. don't let this picture of green full you, because -- green fool you, because it has been a weekday. -- a weak day.

index isnal benchmark on track for its worst quarter is the years, as australian share market in the market in hong kong. the shanghai market is down 29% on the quarter, the worst performance of any major index globally. it posted's worst quarter since 2008. although we are seeing some good games coming through today, particularly from the stocks that were high yesterday. in japan, we saw nothing on the nikkei 225, and a glut today. the benchmark indexes up by 2.7%. still, the biggest quarterly loss in five years. let's have a look at some of the other performers over the quarter. we have been talking a lot about the malaysian ringgit. it is having its worst quarter since 1997.

you can see over the past three months it is down 17.5% against the greenback, although there has been a bit of an upside during today's trade. this is the picture of the japanese yen in comparison, certainly having a much better quarter over the last three months. it has been a flight to save haven assets, and we have seen the yen perform quite well. it is up 2% against the greenback over the last three months, holding it 119.94. some analysts say could hit 120 by years end. day'snly an interesting and a lot more coming through in the region, but the last three months, investors would really rather forget. guy: it has been a week glencore would rather forget. thank you. let's talk about that stock story now. it has been up in asia, doing well in hong kong.

we saw a very strong session in london yesterday. out as the company comes and tries to soothe a few freighted nerves -- what happens next? will kennedy is here to tell us. that hass is a company tried to get out on the front foot in the last 24 hours and it seems to be working. will: yes, people are communicating better. they came out with a statement that said there is no problem, solvency is good, the company is good, there's nothing to worry about. it seems to have done the trick for a bit. guy: and that's it? are we done? will: they have got to keep talking to investors. the other thing to keep an eye on is debt. off after thate statement but it is still at levels which suggest the company is junk, and the all important thing for glencore's credit

rating. it needs to maintain a great credit rating to make it trading as high as possible. guy: do you think there's anything that will convince the agencies that it's correct, that they should maintain? will: ultimately, glencore has its plan, but they can't control the supply of metals. the future of glencore will be decided by what happened in commodities. metal has fallen for five straight months. if that keeps happening, i think they will have more problems. guy: is the model being called into question? the model of putting a trading our next to a physical arm in helping that one act as a counterweight to the other? will: given what's happened with the share price since it listed, you have to say yes. [laughter] will: you know, it was meant to

provide a hedge in week times, for what seems to be happening is that they create huge longer is. longuers. no matter how good your traders are, if you are long in a bear market, it is hard to trade. guy: david is still with us. commodity stale long for lower glencore has a problem. what is your base case? what numbers do you predict? david: we just take the futures rate, the oil prices and commodity prices don't move that much of the moment. no one issly, forecasting a big move in commodity prices. at the end of the day -- lower for longer. which is good for some countries. good for the u.k., good for europe, good for the u.s. not good for certain companies. guy: ftse is lower for longer -- give us a sense of the timeline.

will: that is a very, very difficult question. belowk if copper stays $5,000 for more than a couple quarters, things are quite dicey. guy: on that note we will leave it. will kennedy, joining us on the commodity slowdown. we will be talking much more about that as the work our way through the next hour. let me run you through some of the data we are expecting and how we are anticipating that they will shape up. we have the glencore meeting, the french budget happening at 8:30 in paris. then we have got the german unemployment data coming through at 9:55 berlin time. 9:30, we get second quarter gdp out of the u.k. we are also getting the deflation debate continuing.

10:00 a.m., eurozone inflation will be up. we will break that for you later on. we also have some big revisions expected to come out from the lns debate, providing us with a better picture of what the last couple years have looked like. chancellor,r the george osborne. we are also on fed watch today. bill dudley is scheduled to speak this evening. janet yellen and president james bullard will address a conference. that is at 8:00 p.m. u.k. time. let's talk to our guest host, the chief european economist david allen's. let's come back. we had this data out later on, which is likely to once again provide us with a very negative

stories surrounding inflation in the eurozone. jean-claude trichet used to talk about the compass being inflation, and the inflation at the moment is very flat. is there anything that drug you will have to take sorts from? david: jean-claude trichet so --ways around target, now the focus is much more to core inflation. it is stripping out energy through to back out and that has been running in the eurozone quite close to 1%. if you strip away taxes, in germany is flatlining, at picking up another countries. the u.k. had fallen from over 2% to 1%. of the bank of england will be looking at measures like that, stripping away all the volatile things which are currently pushing down the inflation. guy: nevertheless, are we anticipating that today will be

one of those milestones that takes us toward the idea that we will see a further extension of qe from the ecb? david: i think that is certainly how the markets will read it. the understanding is that inflation is going into the fourth quarter. some measures will probably speed up on buying, -- speed up bond buying. one thing i would also highlight is the currency. that matters hugely, and it is a euro -- and if the euro doesn't weaken further the markets will be focused on doing more in december. guy: on that thought, i want to bring you some stuff from glencore. we are getting immediate statement. release isory talking about the fact that the firm is delivering measures to cut debt by up to 10.2 billion.

as we get details i will bring them to you. the company will be meeting debtholders a little bit later on. interesting. we have the boss of legal and general on the show yesterday, a top 10 shareholder, saying that tell us what is going on, give us an idea of what's happening. i think they were watching yesterday, because we certainly had a statement. we will see whether today's statement will do anything similar. let's get back in talk about the economic story of the day. the you care about the french project? we have artie had some releases being generated, but we understand now that we could be sub 3% in 2017. david: it's an interesting dynamic. more problems with the budgetary problem per se, but when you look at the imbalances it is more about large current accounts.

but yeah, going below 3% gdp is a good thing. guy: how worried should we be about europe? i have this weird thing that goes on. i talked to an equity person who comes on, by europe, europe looks great, it is due for an upswing. i think economists are like, still very much flatlining, getting some growth but not major. how do we square that? how strong is european growth, and are we underestimating its potential? david: we are optimistic on the eurozone. in 2015 we said that europe was upside and that the eurozone next year could grow 2.5%. number,nds like a large but if you are comparing it with the u.s. and u.k. it is still not huge, ais it? some countries will have the element of surprise.

some of these other, smaller countries may also do surprisingly well. we are constructed from the eurozone at think it will do well. guy: think you very much. coming up, don't mess with texas. accounting in the lone star state is suing vw for raising pollution levels. they set another deadline. we will talk about the stateside struggles when we come back. ♪

guy: it is 7:15 in london. let me tell you about the stories you need to know this morning. european equities are expected to open strongly this morning. we are looking for a very solid start to the day, up nearly 2% higher on some of the markets here in europe. we will look at those numbers as the open comes through in 45 minutes. a shocking quarter for global equities, the worst since 2011.

all country world index is down 11%. slumpedghai composite 29%, the worst performer of any major index this quarter. arenese industrial outputs expected to be unveiled for the second straight month. they could drop back into a second recession. the prime minister turns now to the boj for a measure of business confidence due tomorrow. model x relieving its suv in california in the early hours of the morning. it has to production vehicles at the same time. >> we have created the safest suv ever. it is the first suv that is five stars of every category. [cheering]

guy: sport-utility vehicle. does that look like a sport-utility vehicle you, or just a slightly tall car? let's have that conversation and get more with caroline hyde, joining us to talk about this new model, the x. but is it an suv? i don't know. it doesn't look like an suv. caroline: it doesn't, but it is out there to compete against the x5, luxury xe these from audi, the porsche cayenne, dieselgate is upon us and they are offering us and omissions free electric version. it is targeted to people like you, toward families, because it can fit up to seven passengers. it is also aimed at people like myself. women by more than half the small suvs in the u.s. that is, if you have $132,000 to cough up.

before that you get 250 miles on a single charge. you get 17 speaker sound systems, and digital front console, an the norm is front windshield, the largest piece of glass in a car. they can also go to 155 miles per hour, 60 miles per hour in three seconds. meanwhile, they are exploring the virtues of the safety of the car. the filtering of the air in particular. they say they can actually compete versus a bio weapon attack. ever anere is apocalyptic scenario -- [laughter] >> hypothetically -- [cheering] >> you press the bio weapon defense mode button. this is a real button. [laughter]

>> we are trying to be a leader in apocalyptic defense. guy: i have to say, i'm stunned he didn't just go after diesel. caroline: he did make the auto odd joke. he was saying we didn't make this up just because of the current headline. but they are certainly speaking out against dieselgate. but yes, filtering air from bacteria and viruses, but also the vulcan wing door, the fact that they can swing upward. but we have to remember, this car is late. three years ago it was meant to come onto the market, but already they are managing to get all those in, 25,000 model x's are already on order. guy: caroline, thank you. -- the electric vehicle

let's talk about the vw story. as caroline said, dieselgate has been a feature over the last thater, the quarter volkswagen would rather forget. is well known for its links to the oil industry and they are suing volkswagen for $100 million for cheating on omissions tests, making pollution levels worse. hans nichols is here in berlin. talk us through this lawsuit. hans: what harris county is doing is saying that for every vehicle sold in harris county, which is only 6000, they were will say that deserve $25,000 in damages per day, $100 million. harris county has an old expression -- any attorney worth his salt can indict a ham sandwich in harris county.

it is pretty easy to get an indictment and we will see whether this takes that direction. obviously it is a civil case, but this is just the first stage of what will be many lawsuits for volkswagen across the u.s.. it is pretty clear that congress is interested -- they want to see documents produced by mid-october. we have a lot of movement on that side. over here, the supervisory board is meeting again today, trying to figure out if there is a technical fix. it is said to be close on hand. i need to figure out what they will do for the vehicles sold and out there. there is a list of countries where you can no longer buy volkswagen deisels. spain, switzerland, italy, the netherlands, and belgium. in sweden they are talking about prosecution. there are others who are saying we should be taking a look at volkswagen holdings, something

is similar in california. this is across the board, and we are only at the beginning. guy: we are reshuffling a few things as well. we have porsche going up. hans: yeah. all her bloom, -- all of her bloom will not be ceo. there is a giant reorganization going on and the most important one is to get hebrbert to be a get it separate standalone brand, but have you introduce more autonomy when you need more supervision? that can be a challenge. guy: let's talk about that. thank you very much. let's stay on this. we are joined by a shareholder who says that it raises real doubts. the executive director.

david owens is still with us. good morning. we have a reshuffle. hans is talking about the reshuffle taking place. too little, too late? is this a reshuffle you're happy with? will it take volkswagen in the right direction? >> we are looking for a group of 14 pension funds, around 200 billion in assets and equities. these are interested in getting involved in corporate governance of companies. i think it is a mixed message from the supervisory board, making to insiders into key positions. they are also moving up to the supervisory board and that is something we are concerned about because it creates a huge conflict of interest. guy: this is effectively a

family fiefdom. we saw the massive battle between the chairman and the ceo earlier. rant alarm bells ringing already at this point about how the company is governed? hans-christoph: alarm bells have been ringing for some time. now it is time to make the system better to address some of the underlying problems. i think the important issue we haven't talked about, the supervisory board, including representatives of the state of lower saxony, including family members, also including trade union representatives. guy: you wonder where shareholders that in? hans-christoph: one person on the board, and i think if you want to think about a culture change, corporate governance reform, you need to take a look at the supervisory board and that hasn't happened. guy: we talk about alarm bells -- why didn't shareholders try to impose themselves more into this question?

where they just happy that volkswagen was carrying on as the number one carmaker in the world, as a result of which everyone is happy? for the right questions asked? hans-christoph: we had engaged for a long time. we went to agm, for example, in 2006-2007. egm sent a public letter to the chair, mr. winterkor printing pointing out these problem. corporate governance is so special that it is also very difficult to send these messages. now we see the opportunity to make volkswagen a more normal company. guy: there are plenty of other similar structures in germany. how comparable is this? is this a german problem or a vw problem? hans-christoph: german boards have moved on very considerably over the last 10 years. volkswagen is one of the examples where a number of very

incial factors came together a two-tier system, which hasn't worked particularly well. guy: a kind of structure would you like to see? how would it work in your mind? if you could use the best practice. hans-christoph: some very simple things to do. you have 10 shareholder representatives, do we really need five people? do they have the experience? boardo politicians on the -- is that the right choice, the prime minister lower saxony on an industrial conglomerate? than the two representatives of qatar holdings -- what do they contribute? qataris ourt the shareholders. at least they have representation. find the right balance between ownership and

representation? because you have a family that has a big stake, may be under or overrepresented. lower saxony overrepresented, 8%? how do you make that change and convince them that they should have a lesser stake despite holding a significant part of the business? hans-christoph: you have to look at what volkswagen in the supervisory board, and it is such an international company. theirmembers, look at background -- is there anyone who understands software digitalization? then there's also the question on the employee side, the 10 employee representatives, they all represent german employees. there needs to be something done about this. we really hope that the supervisory board, may be at the meeting today, starts to think about what could be done to

change the supervisory board and make it a better and more professional -- guy: should we bring it outside, into the management structure in terms of ceo? is a necessary? do you have to have outsiders come in? vw, yourew up inside are full of the culture, which some could say caused the problems. hans-christoph: absolutely. there is no question. in a german system the supervisory board brings it toward the management board and companyroposal of the -- a new chair, that would be recognizing -- we hope that the supervisory can reverse this decision

on friday. . guyguy: thank you very much. the director at the hermes equity ownerships. we will talk to david after the break. 7:30 in london. -- stockns it is a: 3 markets are on track for their worst quarter since 2011. msci is down 11% since june 30. slumpedghai composite 29%. glencore says it is delivering measures up to $10.2 billion. that is according to people with knowledge of the matter. a stock rallied in hong kong trading this morning, up 17% in london.

japanese industrial outputs are expected to drop off the second straight month. the economy may have dru dropped back into its second recession. a measure of business confidence is due tomorrow. high,equities are trading european equities will open higher. kong.te saly is in hong juliette: good morning. we are watching glencore quite closely here in hong kong after that big slump that we saw in shares globally. that rebound in london helped in hong kong, the hang seng index of 1.6%, glencore shares rallying back from that record low they saw yesterday, down by 29%. less to go in china, and we are seeing the shanghai composite higher. new zealand and australia all closed with a nice pickup coming

through from the other three due to thee in asia fact that we have seen investors stepping up stocks on the last day of the trading month after what has been a terrible quarter for investors here in asia. this is that the shanghai composite has done over the last three months, down 29%. it has been the worst performing index in the world over the last a quarter that investors would really like to close the book on. we have a look at how the nikkei has performed over the last three months. it, too, has been hit by the global equity rout over the last three months. we have also been watching currencies, and we have seen a lot of emerging-market currencies come under increasing selling pressure in this quarter. the malaysian ringgit is one of the worst performing, coming back a little today and tearing some of those three-month losses. that is down against the greenback by 18%. asian stocks are on track to

price their worst quarter of four years, and that is the fifth monthly decline we have seen on the regional benchmark index here in asia. that is the longest losing streak for asian stocks the harsh of the global financial crisis. guy: we lost juliet there are got a very nice early morning shot of what is happening in london. whichn is just coming up, is a good point to mention that we are half an hour away from the european equity market open. let me show you what we can expect in terms of the opening prices. stocks,her for the euro that see up 1.5 -- ftse up 1.5%, a strong open. that is the fair value calculation we have on the terminal, to give you an idea of whether european equities are likely to open high. minister willance be presenting his 2016 budget a

little bit later on. let's get david opens on what we can expect from the french economy, of first we get an update from caroline connan in just a moment. when you look at what is happening with the french economy, politically with france, is the ball rolling? david: it is rolling. france normally performs in line with the rest of the eurozone. it tracks the eurozone pretty clearly. it is probably growing. that had a reasonably strong first quarter, q2 notwithstanding. they will probably grow around 1.5%, it is slow but it is recovering. guy: politically we are going to get very much in terms of structural reform. we are in a difficult political situation heading toward 2017. ? how problematic is that

reformd for structural is in many cases glaring, the politics will get in the way. david: that is absolutely right. you could be bearish about france for a very long time. it always surprises me. it is always running a current account deficit, its corporate sector is running a large deficit, but that doesn't stop a doing reasonably well. other countries will do better, but france carries on. guy: amazing, how the french economy works. [laughter] guy: it is a long essay. thank you. let's get to more detailed on what we can expect from him a little later. caroline connan is standing by. caroline: there is a lot of stake, because this is going to be the last normal budget for 2016, because 2017 is not going

to be a full year. you have the presidential elections taking place in may. the target of president hollande is to reduce the deficit to 3.3% in 2016 after 3.8% expected for this year. and of course he is going to be torn between regaining popularity ahead of the presidential election and of course finding growth, finding public money to support growth. now what we know to expect in this budget is that there should be 9 billion euros extra of tax cuts for companies that will start in april, 2016. in addition, there should be an extra 2 billion euros of tax cuts for families and individuals, also starting in the middle of next year, and in addition to the 3 billion euros of tax cut for families we have seen last year.

but of course, a lot of it is going to be also on public spending in order to achieve the reduction of these deficit targets. president hollande plans to finance as much as 50 billion euros of spending cuts that he will have to find from the social security of france, the local governments, that will have to contribute to this reduction of public spending. but overall, president hollande and his government are crunching a lot on growth and the rebound of growth that we are expecting, even though the second quarter showed zero growth. we should still have, according to him, the french finance minister, 1% growth in france this year. of course, the difficulty is that france has to stand a lot of unexpected money, unexpected public spending the summer between the refugee crisis and the farmers crisis, these big

farmer protests we saw last month. we will also have to find the next republican money for the 8000 extra security forces that for be needed for france syria, for the airstrikes, for the marine reinforcement in france since the "charlie hebdo" attacks. guy: a lot to think about. thank you very much indeed. details are coming through -- numbers are starting to hit the tape vis-a-vis the french budget. as we start to roll those through, we will bring them to you. the french government is seeing a debt blow of 3% of gdp. let's turn our attention to the u.k. with the final reading for second-quarter gdp eating red. -- being red. don hansen joins us now for a closer look, and with us is stephen isaacs.

what are we going to learn today that we didn't know yesterday? don: today we are going to get a third reading of gdp. we are also going to get a back series all the way back to 1987. isely have learned already between then and 2013 13 the revision has been relatively small. the biggest news is in the post 2009-2013.od, not a huge amount, but slightly. cumulative growth is about 1.2 percentage points higher. guy: and the implications of policy? carney about is the rearview mirror and in front of the car? dan: a similar thing happened last year. a revised data quite significantly. the mpc took a look and decided that it didn't have any bearing on their judgments.

that is because revisions have very little impact on what inflation or pressures in the economy, what the pressure will be in two years. so we think they will have little bearing. guy: interesting. we will watch for the numbers. i suspect the chancellor is more excited than the governor. dan, nice to see you. stephen, let's stay with the rearview mirror kind of stuff. the rearview mirror is a quarter that looks absolutely horrendous. numbers coming out of the market, ftse down 10%, dax down 13%, asian markets getting hammered. what is the rearview mirror telling us about what is in front of us? stephen: well, if you look at the technicals, which a lot of people do, in the momentum is pretty horrendous. there is all sorts of death

crosses, daily averages, these sorts of things, which doesn't happen that frequently. the rearview mirror in that sense is telling a rather nasty story by going forward. guy: do you believe the death cross technical picture of the world? stephen: well, i am not a technician. i do think you have to understand how it plays a part in investors minds. they do tend to see on themselves. there was confidence in money being made, money coming into the market which tended to reinforce the move. when you start to go down, you get a negative feedback loop. in that sense i do. guy: when you be putting fresh money toward this? stephen: we are very concerned. we unfortunately feel that we are in the early stages of a major bear market. where do i -- the bonds

look pretty overvalued. do i just sit on a big pile of money under my mattress? stephen: well, to some extent you have to reappraise what you consider is a reasonable return. that is one of the big problems, investors who think they can make a percent-10% -- make 8%-10%. guy: they have to make decent returns. stephen: we are in a low return world. bill gross made an interesting commentary, that central banks by bringing interest rates down to zero moved the whole dial down to zero, the ability to money issk free not possible for any asset class. you first have to understand is realistic and achievable. you can get that in certain corporate bonds, in certain alternative strategies, and that is our focus at the moment. guy: but even if you look at the

alternatives, there is a lot of fresh, unused money that hasn't even been invested in that space. they are running out of deals to do. yes, they are going to make the money, and qe will probably extend because they look a little better, but nevertheless, it is coming down. stephen: there is a lot of was a correlation. that is why one has to be concerned. perhaps a few words on why i am bearish. let's look at the politics for a second.. let's turn to north america. a couple things pricked my attention. under pressure from bernie sanders, he comes out with some fairly aggressive comments about doubting prices. guess what happens? biotech against the hammering. john boehner resigns, he can't deal with the republican caucus

any longer. why is that? i think it is a spillover from the trump effect. the republican field, how do you make yourself visible amongst the candidates? the answer is by creating trouble. that is what trump has done successfully. that doesn't bode well for negotiations. sense thateft with a we need to be -- stephen: strecker celfin. -- strap yourself in. guy: stephen isaacs will come back in a moment. let's talk a little bit about what's coming out of the french finance ministry. we will get headlines on the budget. the french finance minister foresees a gdp growth of 1.5%. inflation rate will drop a little bit as well. european equities looking fairly

favorable as we head into the open. we will take a break. ♪

guy: 7:47 in london. these are the stories you need to know this morning. stock markets are on track for the worst quarter since 2011. msci is down 11% since june 30. during that period, the shanghai composite dropped 29%, the worst performance of any major market. glencore says it is delivering measures to cut debt levels by $10.2 billion. the company will meet with investors today. the stock had a decent rally in hong kong, following the 30% jump in london yesterday. industrial outputs are expected to fall for the second straight month amid concerns that the economy may have dropped back into a recession since abe took office.

attention now turns to the boj on a measure of business confidence, due out tomorrow. let's look at the data you will get later on. draghi is getting a test in the inflation debate. eurozone data is out this morning, lower oil prices could have caused inflation. meanwhile germany is posting its unemployment rate later on. we are looking ahead with hans nichols. what kind of the day is druggy going to have? hans: i going to call this tumultuous. we had the meeting later in malta. if we get bad data on the cpi, the expectation is for 0 for eurozone inflation. if it goes downward like we had in germany yesterday, the estimate was for 0 and came in -.2%, that will put

pressure on druggy to expand the size and scope of qe. that makes the meeting in malta that much more important. to you and i can fight off there on who gets to go cover it. guy: i think probably jon ferro. what can we expect out of germany? this unemployment level is obviously a factor. story that we haven't priced into the german daily at? but that will be several months down. a lot of it has been mostly positive, a lot of numbers coming out. pmi has been a lot better. what we will get is unemployment, 6.4% is where they were at last year. but i can't quite figure out is if german unemployment is so low, why do we have inflation dropping month on month?

that could mean that there is no upward pressure on wages. the energy picture hasn't changed that much since august. that is why the downturn there in germany yesterday could face something a little more troubling for the eurozone later today. guy: wage growth slacking the economy, all the things central bankers love to think about. hans, thank you. let's take you from berlin to paris. financech ministers run to the budget as we speak. he says this is the first year of real french recovery, and that the 2016 deficit will be the lowest since 2008. france, but it has been a horrible period for equities we are coming off, but that is one thing we haven't talked yet -- the corporate bond market.

the volkswagen scandal and glencore are sending shockwaves through that market. stephen isaacs is still with us. when you look at what is happening to the debt story right now and you look at the corporate bond markets, how grim is it? how much change have we seen? how big a shock is glencore, is volkswagen? stephen: this is the nightmare scenario. some of the shale producers are now slumping. guy: the heaviest month. stephen: exactly. did it takes time for money to run out. you get certain stays of execution. that is one shoe that has dropped. secondly, we have had a couple curveballs at volkswagen and glencore, both of whom are huge borrowers. you are getting an unexpected span of deterioration in credit quality. the biggest story is earnings faltering in the u.s., and when you run a leveraged stock market

where you have been borrowing money in a high-yield space in order to do share buybacks and dividends, that is one of the biggest planks in the equity bull market story. all of that leads to increasing leverage. i just don't think it is sustainable. guy: when does that happen? when does it become clear that you can no longer finance equity buybacks by the debt market? stephen: the debt market has been showing that since earlier this year. if you look at most of the spreads, they have been widening more aggressively, but even in the corporate bond space, that has been widening. the debt market has been showing it, the light has an flashing. the equity market, here we are -- we are back to momentum. i am afraid it looks pretty ugly. finally investors are not complete, they are starting to redeem. you have outflows from high-yield. guy: this to see you.

-- nice to see you. stephen isaacs. few minutes away from the start of the final day of european equity trading this quarter. jon ferro is here. that has not been pretty. jonathan: it hasn't. there used to be a saying, when the shoeshine boy recommends a stock, you sell. i wonder if the opposite applies, because everywhere you look over the last three-month there has been negative headline, and as we had for the worst quarter since 2011 in european equities, you wonder what q4 has in store. i will be putting that question to stuart richardson. later in the show, we will talk about eurozone inflation. economists are forecasting that it will drop back to zero, and that they will pull the trigger on more qe. you would expect the euro to fall, wouldn't you? hsbc is expecting it to rally.

and before we start arguing about that trip to malta, a lot of people are expecting the big meeting to be december, when the ecb updates are forecast. so standing outside the ecb in frankfurt in december is something neither you or i want to do. jonathan: i will put hans nichols name and e-mail. guy: thank you very much. the french finance minister is still talking about the budget, the fact that china is pressed into his cut relations. european equities are looking rosy, 1.7% is what we can expect from these european equities. that is the euro stocks, those are the numbers, we will take a break. ♪

jonathan: good morning and welcome to "on the move" we are moments away from the start of european trading as he with goodbye to a messy third quarter. let's get straight to the morning briefing. global markets are poised to deliver. they live away from the third quarter. japan's industrial production and explicitly slumped for a second month. every session looms. the inflation is going back to zero in september. the numbers will be released in just two hours time. we will break them down right

here on bloomberg throughout the morning. we are 15 seconds away. we are pushing high. we are up by 180 points. we are going to wrap up another quarter with a big fair gain in the market open. caroline: what a way to end the quarter. after $11 trillion was wiped out of market evaluations across the world. that is according to the massive market capitalization. onenomenal move set in to moti by china. we worried about the deeply shaken -- the devaluation of the yua. the yuan -- the u.s. kept waiting to raise rates. the tax is currently up by 2%.