but it's 4:30 p.m. in london where the markets closed. let's go to mark barton in london. u.s. manufacturing data throws up concerns about the world's biggest economy. the european close starts right now. betty: so, we are going to take you from new york to london in the next half hour. mark, it looks like we are both, on both sides of the pond, trying to hold onto these gains. ism manufacturing data , betty.things off a bit it started off so well. , the china data, looking on the bright side of life.

expandedvices sector as well. we had factory growth in november. unemployment unexpectedly fell to 10.7% in october. manufacturing growth cool in november, but interestingly, the survey said manufacturing did maintain its positive start for the quarter. so, betty, i'm blaming you. it is it your manufacturing data that caused the flaw in the narrative. betty: [laughter] the traitors did react well to the stress tests of the banks in england. mark: yes, they were. passed theanks stress tests. a couple did not do so well. they fell on a couple of issues, but the likes of standard chartered, rbs, they have announced capital raising plans. there was some concern that they

might need to renounce new measures, betty -- to announce new measures, betty. let's be fair, betty. they were more wide-ranging tests than last year and took into account emerging markets exposure. so, those banks like standard chartered and hsb were really under the magnifying glass. a good day. barclays, rbs, all rows on the back of the bank of england stress tests. there.good to see games let's check in on our bloomberg first word news. courtney donohoe has more from our news desk. courtney? courtney: president obama challenging congressional republicans. that the u.s.says will meet its commitments to help developing nations reduce pollution. president obama: climate change is a massive problem.

it is a generational problem. , by a problem that definition, is just about the hardest thing for any political system to absorb. beenney: it has not decided how much the u.s. will contribute to a global climate deal. attorneys for the boston seeking aombing are new trial. three people were killed and more than 200 were injured. he was sentenced to death for his role in the attack. according to new federal statistics, more people are cutting the cord on laminates. only 8% of households have just land lines. 42% have both. and comedian david letterman is donating memorabilia from his

career in television to his all. and new words, sets, and props will be used to create "the david letterman experience" at ball state in indiana. letterman graduated in 1969. that is a look at our bloomberg first word news. you can get more on these and other stories at the all new bloomberg.com. betty? letterman david experience. thank you, courtney, at the first word news desk. janet yellen is expected to fan the flames for a december rate hike when she addresses congress on thursday. that same day, the ecb is warning it is likely to cut its deposit rate. some economists say it will set the stage. this will be a multiyear divergence between the fed and ecb. mark: betty, i cannot believe we

are talking about the ecb raising rates. check out this chart. morgan stanley judging the ecb will not raise rates for another 36 months. betty: wow. 2018. november betty, that is just a year before mario draghi's term ends. raisingre talking about rates. this is insane. let's go along with it. a really good article by simon kennedy. saying mario draghi will be long gone by the time the ecb actually raises rates? guest: i guess it begs the was the lasthen time the bank of japan raised rates? when will the bank of japan raise rates? the inflation target will be pretty hard to meet. i look at it from my desk and firm isomeone in my

trying to come up with a forecast of the date. i do not know if i will still be around when they raise rates, let alone mr. draghi. be 1994, the last time the bank diverged -- cutting rates. many, on a divergent path many a month? ,ome say the fed could cut rate hiking rates, before the ecb raises rates again. i think we are penciling in next onends that the happens in 2019 -- mark: well before the ecb cuts rates? kit: by the nature of this cycle, if you think that the u.s. economy will start at the point where there is no spare labor, the rate of growth picks up, so inflation tries to pick

up and rates go up, and that is how you create an economic cycle. the clocks do, start at that point. i think mark is making some great points and we have been so focused on the divergence. i do wonder though -- do you think we may be overplaying this divergence in the years to calm? kit: divergence of some things. important in that it moves the dial. one of the important things about this divergence, compared tonight's many for when the fed was raising rates very aggressively before the economy is notin 1995 -- the fed going to put rates up quickly. it will be the most dovish rate raise we have seen, i would imagine. we can have divergence on some showsries, but as the ism

this afternoon, you will get divergence on overall gdp and most of performance all. global manufacturing is weak absolutely everywhere. betty: it is. and you know, on the way down everywhere, pretty much everybody's interest rates, right? it's not even the fed against the ecb. everywhere you look, there is a divergence there, right? kit: that throws the question much much further along. there are bond yields pretty much everywhere. if you think a 10-year treasury lotd today -- it's a a lower than it was in january 2014, and it's probably a little bit lower or unchanged from where it was at the start of

this year. and the question in that sense is, how many times does the fed have to push interest rate up before the yield -- let's say gets the other side two point 5%, 3%? that's when global monetary policy gets titans. bond yields, the the u.s. bond yields headed lower and lower. a third of the market is negative. 400 euro bonds have gone lower than -.3% since the last ecb meeting, meaning the ecb has to catch up with the market. is that going to be the game from now on? the market front runs the ecb, since the yield lower and lower, and the ecb has to bend the rules question mark what is a keep cutting the deposit -- why does it keep cutting the deposit rate? has forced money

out of europe to get the currency down. we have the bond yield falling while 10-year treasury yields a super rare occurrence on any kind of lasting perspective. 1994 was not a year to be looking for treasury yields to rise and bond yields to fall. think the european question is what will the ecb's further quantitative easing do for supply growth lending? possibly not very much. they will get the euro weaker if they can. -- mark: how are they yielding? perhaps by dropping any reference to september 2016.

they will keep buying until they can add, perhaps by dropping some global encouragement. look, if we have to do more, we will do more. it will be difficult to keep pushing on this. it really gets difficult -- does the euro rise against the dollar, or does it fall after the thursday, because this will say a lot? kit: i think the dollar falls after the fed moves or does not move on the 16th. mark: interesting. good to see you. massive, massive day coming up on thursday. live coverage of that news conference two days away, betty. time, 1:30ew york p.m. london time. betty, we are nearly there. betty: i know, i know. you are raring to go, mark.

but we still have more work to do. the u.k. banks past their stress tests. some performed better than others. we will break that down in a moment. ♪

mark: welcome back. this is the european close. i'm mark barton. eddie lewis in new york. let's focus on the business flashes of the day. -- betty liu is in new york. that's right. the omissions scandal has rocked volkswagen sales in the u.s. vw of america sales dropped 20% in november. they are offering large

models.s on and shares were lower in the german trade. -- according to nikkei, nissan wants to weaken the french government's influence over the alliance. nissan is saying its board has taken up a number of issues, including a deal with renault. and sandwich chain jimmie johnson up the going public. the ceo says he spent two years speaking to bankers and they are not ready. you can always get more business news at bloomberg.com. mark, i know that you have big across the u.k., and that is stress test results. big: a big day for banks, a

day for lenders. check out the chart. interestingly, standard dip right at the close. shares were up 8%, finished down. these twopanies -- companies were most at risk. they are off the hook on raising additional cash from investors. stephen morris joins us now. what does that tell us, the fact ast standard was up as much 2.8% and finished slightly lower? the others did rise on the day? guest: obviously it is a big relief rally as they realize the capital rate was sufficient, they will not have to come back again. digest the news and go through the day, you realize all of the same problems still there for standard chartered. they still have investigations around the world and they still have to deliver on the stress fees in the bank of england trade.

yes, and there is a great piece by ed evans, and that says when everyone passes, you should start worrying. worthy tests stressful enough? measuresa lot of the were not as stressful as we have seen in the past, for example during the lehman crisis. the global commodity indexes are not that much higher than the stress scenarios -- oil was up $38. it's hardly stressful, is it? stephen: exactly. these banks roughly know the criteria of before they can plug in the numbers, witches why standard chartered knew how much capital to raise. the objective of the tests is not to fail anyone. mark: and they are more

wide-ranging than last year, stressing emerging markets. credit bubbleing credit bubble. the banks are clearly aware of this. in the stress test, didn't seem the regulator is aware of those risks? a lot of this is moving away from banks now to non-bank lenders. .t was an interesting thing remember, lloyds, the biggest mortgage lender in the u.k. came at came through with shining colors. usk: thanks for joining today. great to hear your view on today's stress tests. interesting to see, betty, the drop in standard chartered shares. platell has a lot on its to cut the balance sheet. i love the stat i read earlier, s&p 500 has risen in six of

the last seven decembers. betty: that's right. december is usually a big hole for the bulls. even though they got rattled by numbers. abigail doolittle has more. abigail? the nasdaq is up about half a percent. tech shares trading higher, one of which is google. mark mahaney says when the company reports its fourth quarter, it will be segment reporting. he says this is the most identifiable pattern in internet land and will show the forecast for profitability for google. this suggests that shares to have room to run, perhaps right .o the price targets another tech name amazon, the

company sold three times as many devices this thanksgiving weekend as last year. ,he top seller, amazon fire tv followed by the fire tv stick. paul vogel says shares are likely to outperform again in 2016. betty? betty: thank you so much. abigail doolittle, live at the nasdaq. you do see that puerto rico has made their payments on their 354 million dollars in bond payments due today. toy are not going to default bondholders. we will keep an eye on the situation in puerto rico. we will be right back. ♪

betty: you are watching"bloomberg markets: the european close." and.our bets

it is that time we look at the charts of the day. joe weisenthal, the anchor of miss?" standing by and mark barton for the battle of the charts. , generally good. i, the highest -- pmi, and quite a few quarters. of course, the euro has been something. when you talk about how euro -- how the euro is going to come back, one way, you weaken the imports. it does appear that they are starting to pick off. have: it seems that they accelerated. oh, we have a news alert here. betty: it's on your chart.

joe: that is the key thing to review want to see exports booming. we talking about the aussie decoupling here? the australian bank keeping rates unchanged today. the aussie has been rising since the middle of october. that is the divergence. look at the movement. they have been moving in tandem for the last couple of. in tandem. much move when iron ore falls, the economy tends to fall with its. but you know what? expectations for rate hikes have been cut for next year. chill out, betty. that's not me. told stephenhey for next year. they said, we've got christmas,

we should chill out, come back in february, and see what the data says. would janet yellen ever use the term "chill out?" it will be fascinating to see what happens to the aussie dollar then. it well, and will be trend be intact? i have to say, even though i was going to lean toward joe because he has not won the last few times, the "chill out" words, mark -- joe: i never win. like, joe is going to be are you slipping me a couple of bucks here? so, anyway, mark is the winner. mark: joe, i don't know what to say. good luck with tomorrow. that's all i can say. betty: [laughter] joe has got to step it up. mark: let's have a look at the numbers. goodbye. will say

mark, what is going up with europe. interesting day today. most of the day we were higher, week number in the u.s. really knocked to the socks off stocks. here is what i am watching tomorrow. busy day tomorrow. inflation forecast to rise in november, just before the ecb moves. increase.a 2% and another thing to watch, u.k. lawmakers vote on extended british airstrikes against the islamic state into syria. joe, don't worry. it might be third time lucky. that's the european close. have a good day. ♪

>> it is noon in new york. welcome to bloomberg markets.

good afternoon. here is what we are watching at this hour. >> in the united states we've 26 million people who do not have enough financial credit history to qualify for a loan. in her interview on bloomberg television. hear what he has to say about the reforming of the banking system. samsung appointing a new mobile boss following two years of poor results. does he face an uphill battle? automakers used early holiday deals to keep sales churning in november and more incentive could break a sales record for the year. for more on today's activity let's head to the markets desk where julie hyman has the latest . julie: interesting that this rally is happening after we got wo