>> china intervenes with state stocks being bought on market slides. threat of billions in penalties from the justice department lawsuit. isannouncing how far the ecb permitting the targets. >> welcome to countdown. >> welcome to the program. let's talk about china again. it seems that the chinese government is intervening in the

market. it is a knock off of the major industry right now. the chinese session is falling off a little bit and shanghai is down 1%. the thing i was reminded about economy and the second-largest stock market. >> this is a point that everybody made and we are looking at the growth with the drop and the volatility in the stock market is horrendous. you see the move and you talk thet everybody saying that stocks and selling bands will billionsn end with the of dollars not doing anything and we see drops like this with

the china index in the first quarter and the chance the csi will be in the red. >> it is a bad omen. ?ill this come to an end this has been in formal messages. maybe this will not come to an end until the other regulations are in place and we will get a read on all things china. let's look at the program with caroline. >> the state-controlled funds haltedtervened and they training. sectors withking those familiar with the measures. since biggest reverse september. $20 billion in the financial suspended the pboc

they run with the cash injections. the regional federal reserve actors have dismissed the concerns with the stocks and they said that the u.s. economy is on solid ground. >> we have seen the economy growing and there have been ups and downs and i think the economy came back significantly and the expansion is on solid ground here. show this upt to 2%.it would leave things at the obama administration is

warning -- widening who qualifies as a drug dealer to of firearms are the hands criminals. >> although it is a strong getef that way need to complete arms around the problem and congress needs to act. i asked my team to see what more we could do to strengthen the enforcement and prevent the guns from falling in the wrong hands and make sure that the criminals and the people who are mentally unstable and those who could cause harm to themselves or others, they are less likely to get a gun. story, you on this can go there. >> let's check the rest of the asian markets. no reprieve from the

intervention so far. nothing prophetic. this is, by no means, as bad as yesterday and it has been all over the place in trading today. back those to giving games and we have seen some games in southeast asia with a and the nikkeiry has been volatile today was some fairly good games. there are automakers and export-sensitive stocks in the they are reacting to the oil price, despite the iron they ares jumping,

sitting a little bit lower and we have been talking about china. what else have we been talking it is the chinese is a $4 billion stake in legendary entertainment. horizons and the this is a major chinese this isr down and steelmaker is up. so, these are companies where executives have been removed,

and somenvestigations of those are underway. i want to take a look at the terms of how they are looking today, compared to yesterday. is down andechanism there is not much in the way of gains. having said that, arguably, it could be looking worse and, before i go, take a look at these yesterday and the huge theseto the downside with sitting at multi-year lows. >> thank you for joining us from hong kong. we are looking at the big news out of china. the steelrop up

sector. in equities, more than $20 billion are the biggest. we're joined live from hong kong. it is great to have you with us. does this tell us something broader, in terms of the response mechanisms for 2016? is a significant move and there is a liquidity shortage in the system right now with the chinese central bank responding on a scale. the holiday and them making technical changes to

the reserve ratios. encourageimes could lending in the economy to get things going. prudentialthe macro side of things and this brings us back to a liquidity injection with a view that this is about putting money in a system and the rate cut that may not be there. shiftnals something of a to the approach. >> interesting. let's talk about what we are the indices with the authorities intervening today. what do we know about the deadline where the companies listed the ability to shelve --

sell the stakes in the company's. perhaps the limit will not go away in the date will move. >> this is how china intervenes in the market and it has been with or behind the scenes. this is six months after the last began and towards year. they are having to intervene to prop things up and it shows a degree of nervousness and a disconnect in the economy. by all accounts, things remain fragile. and at the capital outflow there is a look at the stock market.

is theltogether, it authorities choosing carefully to left the van on shareholders. >> thank you, our chief asia economics correspondent. >> 11 minutes past six. yesterday, the cleveland fed president was not too concerned about the impact of the chinese slowdown on the economy. >> we have built in a weakening path for china and i do not see that as significant. there is a direct trade channel and this is not that large. again, will it have a direct effect on the economy? i do not believe it is significant. >> happy new year's.

welcome to the show. the chinese are intervening. how worried are you about china? go more with one of the best-performing stock markets last year and the difference between the economy and the stock market is not strong. putting that to the side, you christmasmmented on and nike looking for the bottom-up view on china to perform well and this is all about a move to services and consumption that seems to be working. that this is a volatile and casino-like market with a good chance that they

will bring up the premium and it is a 35% premium. when we got involved in asia, ande was a small this batch we are out of those shares right now. the global investors get we fell into that too early. >> you like the reorientation of the chinese economy towards the services side and a new china. if you're looking to get exposure, where are you going to get that, if you think the asian market may be to casino-like? >> it is difficult with the consumers. the mediansive and is in the 30's.

so, yes, we would typically by and individuals shares invest in the funds. having a quality buyer and in thea quality by management would be a way to direct the volkswagen sales to china. you will look for the companies and spend relatively small amounts of money. the cheaper ones, rather than the luxury goods. >> going to hong kong, rather than mainland china, that is fine. there is a story about a size of

outflows and this is a balancing act they have to try to enact to stop the capital outflow and the demolition derby that could go on with the currency. as an investment manager, what are you looking at with the currency? how will they continue to rebalance the story? >> the rebalance happens naturally and we see that. >> do you worry about the outflows? >> yes, should it get out of control. there is a more important stock market, japan, in the 1980's, that was 50% of the world and it absolutely collapse and it was expensive. the spillover to the rest of the world was little and you needed

to be a stock market investor in u.s. equities. it was concerning and yesterday was a jolt in global equities. for us, we look for that to break. >> this reminds you of what theened in the market with chinese market finding it hard to make a direction and being supported by various buyers to pump up the stock market. now, we see the markets coming on and the shenzhen composite is down. caused so much trouble yesterday. >> this is where it comes down to. whether itntion and kills or chairs or quells

concerns. can it chair? >> more of a chill, i think. the chair is when there is good value. but equities at good value. >> you are with us for the next hour. thank you very much. andt is a busy day for data we have spanish unemployment numbers. the german jobless figures are due. >> this is one that mario draghi will watch intensely. next, volkswagen is sued by the night states over the device scandal and we will get the latest.

>> welcome back. you are watching countdown. >> thank you. the justice department is suing volkswagen. vehicles and this is the first case against the company brought by the justice department. is the reason -- ted has been named the chief investment officer. he will start this month. blackrock, the world's largest aset manager will struggle the federal reserve raises interest rates.

they lost 2.5%, according to the indexes. you can get more from those stories. >> thank you very much. let's get more on the stories. back in berlin. is this just the beginning. the number is colossal. $80 billion is the potential upper limit. >> the challenge is how they argued the case in court. to get to that number, that is almost four times the 18 billion the government initially said and you are talking about more it is very clear

they want to send a message to manufacturers tonight. here is what they said tonight, they said the emissions control sessions disadvantage the competitors here in frankfurt and germany before the action was announced and the announcement ended at 2.8%. here is the other big challenge. they said they did not have a resolution on a solution to the via goals that are being worked that are vehicles being worked on. andomes down to the engines volkswagen is not quite on the same page there.

out what youigure are going to do about the polluting portions. >> i will pass the intelligence on. what does this tell us about other civil suits and criminal charges? >> the department of justice is clear they will not forgo the opportunity to go criminal and these will be moved to san francisco. it is not all bad news for volkswagen. 10% on theill be up year with the mexican market and, in the u.s., we will get the final numbers and we expect them in the 17.5 million annual sales.

>> i have had many cars disappear of their own volition and one of those, i lost by my own carelessness. thank you very much. >> very nice. a literary reference. we will talk about volkswagen. >> it is default insurance. >> that is interesting and it shows a panic and a spike in default. the way of looking at it is a conversion and i would have to give credit to the bond team and they did buy into this and the many companies become running

for bondholders and they buy is key.se when it company feels it is in trouble and runs itself into trouble. extreme and they are buying bonds in the market. that china is an important market. storyis a good anecdotal survey was in china. u.s.did not know about the survivor andt is a it will be worth watching because it does not sound like a big number.

>> thank you very much. stay with us. >> some of the richest people in the world impacted by the stock market slide.

>> let's get the news with caroline. caroline: intervening with theks and they called it shares of companies and steel sectors. the shanghai composite is trading off by 1.5%. they injected $20 billion into the financial system. and it is a six-month run of

cash injections. semester in cleveland and they say the u.s. expansion has run aground. and there seen this have been ups and downs for times and sectors and the economy has come back significantly. >> the eurozone data is off and the rise would still meet the ecb target rate. it is likely to hit. -- t is aimed at

until we get the complete arms around the problem and congress acts, what i have asked my team to do see what we can do to strengthen the arm enforcement and prevent the guns from falling into the wrong hands to make sure that the criminals and the people were are able totable get a gun. thank you for that. stay with that. the amount of money is seeing

injected to stabilize the situation in china is really acting in the market right now. we are seeing a stock chart off 500.it comes to the cfi , to put that in perspective, that is the gdp of sweden and this continues, despite the pboc promising with regulators being familiar and senate will not lift the ban on selling these assets with the prevention and the halting of trade yesterday. what used and disturbed markets more.

it raised more than a quarter and keep an eye on volatility, they have jumped 22%, the most since august. this nottalk about impacting me and the richest onple in the world fell monday. >> we are joined from singapore. good to see you. tell us how much was lost and who was hit. >> hello. it was a tough day in the markets with the factory data and the tensions. worldchest people in the

buffett,gates, warren lost a $.7e of those billion in a day. the worst of all was jeff bezos, losing 3.7 yesterday and it is a lot. i do not think you will fret and he will gain about $30 billion. i think he is pretty good. >> alike the net effect. -- i liked the mets effect. is there an increase? his wealthwn and

is a relatively small some. and people lost on monday. pretty brutal. >> thank you for joining us there from singapore. the stumbling stocks as the u.s. economy in good shape with the future rate rising. >> the path to rate increases is consistent with my view of the outlook of the economy and my forecast is for this to be between 2.5 and three quarters in the next year. >> higgins is with us. let's look at the rates again and we heard the officials

early. how many rate hikes do you factor into the end of the cycle? >> not many. not many. it is a little bit of a holiday malaise. we have much in the way of rate hikes and specific economic forecasts on the high side. a lownk that we are in we have the euro land. >> what does that mean with the globally andgame

this is a forecasting function on the bloomberg terminal. is there going to be enough inflation and hikes to get it out there? >> we have seen where these trade and it is remarkable how low the yields can be. 32%efinition, you'll own and only make short-term capital gains with the yields. say they are good investments with equities. we are saying the yields remain low and give you low return. we go against the bond market trend and you have seen this kind of trend with the yields

going much higher every single bias andthe bearish communities. we need to look at japan. it is incredible. they are saying that, by the end of next year, you would not go against that. , i do notanese bonds have great knowledge and it is perfectly reasonable that you would have a low yield and the debt to gdp is 250%. withis is the big issue whether he goes for the election or the stimulus. stimulusid a miniature with the bond buying and the equities to become significant and there is more of that.

buying.et exactly. this cannot do much with commodity prices. comes similar question with the inflation data and we will talk about that. you are a bond guy. 12% increase and the 7% increase in global equities this year at the start of the year. how does 2016 look to you push and mark >> there are reasons to be cheerful and, sitting here, it does not look good. look and it fell 5% and it was a

rocky start with the first few days sometimes misleading. we are positive about the stronger economic data and the values in european equities. >> you hate the comparisons and you say the u.s. is overvalued with russia. >> that is good for the long-term investment and it does not tell you so much about the year, affecting the groundwork and the longer-term. booker it is a priced to dividend yield, europe will stand out. the consensus is heard for a lot of people and, sometimes, the consensus is right. based on this being supportive and the continuation in europe, you have the bank of america and merrill lynch

outperforming. how long will that last? earningsis superior and it has been all about earnings. we think that will continue this year. >> coming up, tensions are off thend markets shrug round between the middle east nations.

paris are watching in over the last two days. let's focus in on the futures markets. >> the worst days since 1952 and

the equity was indicated to be openr with london trading and you can transfer that true through. >> ignore that. >> the u.s. justice department and thisions testing's is the first case against the company brought by the justice department. they have received offers and they said there was no certainty and the restructuring plan remain -- remains unchanged. managers rock asset say that bonds will struggle and

they raise interest rates would andsury returning in 2015 the sovereign debt lost 2.5%. for more, customers can head to the top. >> let's talk about the conflictg diplomatic and the ambassador saying that they were less than supportive. >> they have not been supportive and positive in these efforts and they have been taking the productive -- provocative positions. london, it is great to see you in the studio for a change.

we know the specifics around the weekend and there are other reasons the things flared up right now. >> the execution was a massive and i do not think that anyone expected that to prisoners ande that was provocative. there have been underlying tensions for many decades and the tensions increased and escalated because of the conflict in syria and the crisis where other countries have been on opposing sides. >> with the different voices in iran and rouhani trying to

thest quell or pulled iranian response back, what should we take from that. this is a critical global deal being done with a run. >> they are trying to draw a distance between the people attacking the embassy and the ordinary iranian government and states. he found that to be an important distinction to make. at the same time, it is very important that they show a thisg position against with the position being delicate se right now and there are broader questions to think about in addressing the issue and the nuclear agreement implementation may start at some

point in january and will be crucial. iran has to maneuver carefully. >> does this have a bearing on ?he welcoming by the west >> too many, it may look like saudi arabia has been provocative and they knew this would elicit a strong reaction. in the attacked on the embassy. we knew that it would be provocative for the region aoadly and they created massive backlash and there have been protests. there may be an argument when we are barely a month away from the nuclear agreement.

>> thank you very much. out in thehis play market reactions yesterday with a small move upward and oil prices. does this put forward a tension in the middle east or is the have it.ory doesn't make an opec deal a future less likely? say that it is good that the demand is strong, as you mentioned. it is all about when that turned off and i saw the chief executive towards the end of say year and it is hard to

that it is difficult to forecast. >> you are not the negative on china and it is refreshing. the commodity cycles are based at these levels. are you uncomfortable with the and the basing it of the commodity. there is the commodities and europe that is less and i think it will be taken as a positive. >> there is an oil route.

news and the big picture that can go wrong with the low bond yields and wrong on inflation with higher inflation's and a gradual 2% rate. is a very bearish scenario and the inflation state would be more of the worry. and -- sentiment dragon >> are you interested in bond companies and volkswagen facing tough times? a lot of oil companies talk about paying out shareholders

the oil is your take on at the moment? the dividendss is over 30 years and there is a bond perspective that we are talking about. certain companies have run for , to a certaind extent, the bond holders are in charge. aggressive. to be >> thank you for being with us to kickoff the year. are going to release the

major european christmas performance. has what we can expect from the statement. next have been a victim of the success and keep outperforming the market phenomenally. in the past 10 years, they were beating the analyst estimates and we are looking at the price up with thet are growth on the fourth quarter. up 10% over driving year and we expected it with the full year profits. the fourth quarter for the next outlets and they

were meant to be good at weathering a recent storm. >> what are the biggest challenges for the retailers question mark is it the boxing day non-to the shops? and you see the people group getting hadng coats and we unbelievably pleasant seen atures and we have launch of price cuts. what did that due to the road profitability? a cuts prices and we will see this. >> thank you. we will look for the numbers. london indicates up 78 points

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china intervenes with state-controlled funds and they said they will be buying stocks after the slide. >> a threat of billions of dollars of penalties from a justice department lawsuit. showingnese dilemma and how far the ecb is from meeting the targets. welcome to countdown. >> we're talking a little bit about where the markets may open up in an hour.

we took all of the global equity markets down and we have seen the chinese authority intervening. >> yesterday was the worst start ever to the markets and you saw a little bit of a late day rally and it is the worst opening session. it was down over 4% and you had them up 8.1%. so, some reprieve for the european markets. you have a little breaking news? thehe u.k. retailer says sales in the fourth quarter were att 0.4% with the estimate 8%.

the estimate was part of the business and we are getting a number of gloomy numbers coming the bestthe start are start of the christmas reporting season and it is amazing to see these numbers. we will see caroline digging throughdetails and december 24 with the estimates. that does notness discount and it is a saving grace during christmas and new year's. we will get more and a little while. haveate-controlled funds intervened. circuit breaker to hold trading. someoneaccording to

more familiar with the matter. they are trading down a quarter of a percent. has injectedank $20 billion into the financial system. they added a six-month run of cash injections. john whims of san francisco said that the expansion puts them on solid ground. grow have seen the economy over time with sectors and i think the economy came back significantly from the recession and the expansion is on solid ground here. showe cpi data will inflation up from the previous

month with a rise being the ecb target rate and it is a different goal that economists say is unlikely to hit in 2016. is obama administration broadening who they call a gun dealer to get guns of the hands of the criminals and mentally ill. >> it is my strong belief that we have to get the complete arms around the problem and congress needs to act. i asked my team to see what more we can do to prevent the guns from falling in the wrong hands. criminals, people he mentally unstable, those who can pose

themselves to them's -- pose a danger to themselves and others, they are likely to get a gun. >> let's go out to heidi, who is blaming the weather and this is the most significant thing, saying the online competitive environment is getting tougher through the christmas reporting season. >> let's get with the asian markets are doing. it is good to see you again. >> it is remarkable and something has definitely been happening in the chinese markets with the reports of the state-funded buying happening and we spoke of the shanghai fraction being down a of a quarter of a percent in the the shin jen close was

steeper losses. have beenes would more severe. we had a lot of flipping and flopping with james and losses and we had some pretty good once that we have been talking to with a decline being extended andy in the export rates below theextended it is not aes and and some gainsl came through southeast asia. we have seen things move today. we had tuna and automakers reacting to currencies and we

did see a nice balance and a withff on the cost be electronics recovering 4.5% and we are seeing a of a rebound from the electronics giant and we are watching out for that. we have seen the gyrations in the chinese markets and this is the charts. games, we sawhe the rally and we gave all of the gains over the last year and we are in danger of breaching 3200. 2015 didn't happen. but, it did and we all lived through it. >> they are using

state-controlled funds to prop up stock market in the trade. the banking and steel sectors are among those who are supported. costs are in a reverse repo operation and we're with theom beijing injection of cash telling us something about policy, as opposed to the adjustment and the rate cut. the chinese policy makers are looking at implementing the capital measures and the new and linking hong kong and linking exchanges this year.

derail the efforts and the chinese pollard desk chinese policymakers want to make sure the stock market crash would not develop into something bigger and systemic. nextat should we expect with the details on the limits of selling the large stakes in the company's? aboute more to learn work. expect regulators to step in to prevent this from developing into something that threatens the stability of the financial system and we expect policymakers to do that and

preventing that from happening. we also should expect regulators and thee the situation wason they learned in july that they were blamed for taking action to late. >> we will see what comes next for the markets. >> yesterday, the market meltdown may have spooked some investors and the cleveland president is not too concerned. china and a path for i do not see it as significant. it is an earlier risk. thatrade channels seem not large. it is significant. >> let's bring in our next guest. happy new year.

a good day to you. we are not worried about china. give me a sense of the way the market recovered to being down and the circuit breakers kicking and. pay toh focus should we chinese market volatility? we were told to not get too worried. >> it is a thing to work -- to look at. on the second day of a new year and we get good signals of what it will be like. it is watching all of the details and seeing all the things in the ordered way. the market is moving on quickly thate expect a good open

reflects where the markets should have been without a shock that we got in china yesterday. with thesecond shock iranian and saudi arabia shenanigans that remain a growing threat. we will look day-to-day at the moves like this. >> we have seen global strategist talking about global equities at 12% this year and -- do you see a positive environment for global equities? is theing i expect upside shock that we see stronger growth that justifies the market valuations we have already had and the stock market prices are pretty distorted by the effects of qe and we are

looking at economic numbers that are not supported of that in the manufacturing data was poor. the economy is going to take off and that is only one aspect. rateshe u.s. justify the and the stock market valuations? the best-performing stock market is japan and it is distorted by domestic government buying and there is nothing in europe that suggests the valuations we are seeing are properly justified by the distortions and the inflation is not going anywhere. i hear someone say 12% hikes in equities and i want some of whatever they are smoking.

>> we will get back to what they are smoking. we have the global sovereign bonds and you put those altogether and it is an all-time low that manages to rally. year and are of a you a bond full or bear? >> you cannot characterize the markets, unless you expect big moves and we are not seeing them. i think we will see the rates rise in the u.s. gradually and it will result in a flattening with the interest rates moving in the short-term and less in the long. it is interesting to look at the and thiset sectors

will be minor. areas, like a financial institution, i am concerned about the shenanigans going on seems toal, which break rules of finance with investors seemingly almost wiped out. many people predict a recovery for the emerging market bonds. strength anddollar it spells further problems. >> a busy day ahead. let's give you the rundown of spanish unemployment numbers. >> jobless figures are due out. looking andghi

eurozone inflation. next, monetary policy and the eurozone inflation the years telling us about the divergent path of the fed in the ecb. -- and the ecb.

>> welcome back to countdown in london. it is 19 minutes past 8:00 in frankfurt. department justice accuses volkswagen of installing illegal devices on 600,000 vehicles with a complaint filed on the company. they received from an area of -- approaches and an offer was made.

a $30 billion man has been named a chief investment officer. the world's largest asset manager says they could struggle and the federal reserve raises interest rates and sovereign debt lost 2.5%, according to bloomberg. for more on those stories, customers can head to bloomberg. we are talking about challenges in the directory and the weather. >> let's not put too fine a part -- a point on it. these numbers are terrible and will send a shiver down the spines of global competitors.

they numbers are down with the sales of the estimates and the directory online presence is up in a fifth of what the market and the estimate was at 5.8% and i cannot tell you the outlier and the silver lining midst to outperform the market with most of the sales coming from furniture and the .ess affected by the weather there is a mix of children's apparel to be a comfort throughout christmas and they weather pain from warm with the fact that nobody is going to buy warm weather and

they say that we are to blame and they had a poor stock ability. these are brutal numbers and we will see the sector. margins in thee forecast and there is not much verywith the year-end soon. they declare dividends. thank you very much for the latest. : that is how you keep the shareholders with the times ahead. shareholders dismissed concerns of stumbling stocks with the federal reserve saying the economy is in good shape and spoke about rate rises. >> the path of rate increases are consistent with my view for

the outlook on the economy and i 2.75% over the next year. >> we talked a little bit about differentwe have a rate pattern. in the eurozone, they will fall short of the targets. >> it does not look to be a surprise to anybody. >> less than 2%. >> undershooting a target. >> that is the investment strategy. >> you made the point earlier that the european bonds returned and over the last years they will do whatever it takes

with the buyer of last resort and we are not at a stage where the european countries are going to see their bonds react and the european rates are not going higher anytime soon. we will see the bonds come off a little bit. we are probably more likely to see some lessons with european ands selling off slightly thee will not be disappointing speech that mario draghi give -- gave last time. is limited buying. >> the limited ongoing extension for the months and the shift.

what does that mean for the outperforming parts of the european bond markets last year for this year. if you look at the volatility, does the yield move back a quarter of 1%? >> these are moves we are noting about and we are going to see spectacular trendfs or gains and the will slightly be upwards and that is a trend that we will see in the markets. dominante that as more in the market? >> i do not expect the ecb to be pushed into doing anything dramatic and that is the message we are getting with them doing enough and standing ready to do more and that is mario draghi's

trademark trick, saying ready to do more, and not doing it. politically, he cannot do much more. in theas consequences currency markets. >> there are many in the market. in the marketr -- that believe the dollar has played that game and that is a thing that does more than we expect. >> thanks.

>> we're 30 minutes away from the start of the european inding with the indications london and france. >> see you tomorrow. the only way to get better is to challenge yourself,

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it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. in london. counting down to the european open china with state-controlled funds after the billion-dollar market route. vw sued. carmaker faces penalties after a u.s. justice department lawsuit. data setone inflation to show how