>> from bloomberg world headquarters, good morning. i am betty liu. we are about into a half hour in the trading session. world are rallying in games. the nikkei surging more than 5% overnight. george soros raising a big red flag saying china's economy is in a hard landing. that will drag down stocks and cause the fed it to cut rates. is it turnaround time for oil? crude is being -- seeing the biggest two-day event jumping more than 16%, hitting a 12 year -- since hitting a 12 year low since thursday. let's head to the markets. breaking news on the housing

market. terminal,across the 5.4 -- 5.4 6 million is higher than the estimate in our survey. 5.2 million coming in percentage wise. was -- it is a major turnaround when the number for november came in a -10.5%. let's take a look at what is happening. the markets are up across the board in strong green territory. .he s&p 500 is up 2% the dow is up 1.5%. with the s&p is important to note that it is the best two-day rally. looking at the dow, look at that triple digit gain, ontrack for its 11 triple digit gain in the past 14 sessions.

pop into my bloomberg terminal and i want to show you what is happening with the ticker. it is green across the board. led again by energy. but i closely behind by materials up by 3%. information technology, up by 2%. the year to look at date. we can see over the start of had been on a downward trend, but then we saw thecorrection come in after ecb's mario draghi says the stimulus may come next month. crude dictating a lot about what is happening with the markets.

it is up near session highs, 6.5%. we closed 6% higher. building on those gains from yesterday. betty: in the meantime, american express is getting hit. >> let's take a look what is happening with american express. losing steam. falling the most in almost seven years. this is after fourth-quarter profit declines. it is driven by a drop in revenue. betty: thank you so much. check-in with the first word news with vonnie quinn. vonnie: good morning. john kerry says the world is a safer place because of the -- james comey says the world is a safer place. >> i can't tell you how many leaders when i travel through

certain area say you have to bomb it. that is the way you will solve the problem. now, because of a joint comprehensive plan of action, iran's plan to building a bomb has been closed off. blames meanwhile, kerry syrian president for the worst humanitarian disaster of our time. american tourist is under arrest in north korea. they said the student is accused of plotting against the government. crisis is made an issue in berlin as top officials -- 1.1rmany and turkey million asylum-seekers arrived plain conflict in syria, iraq, and afghanistan.

they have urged other european union leaders to make good on their pledge to improve conditions for 3 million refugees. the attack in mogadishu started with a car bomb explosion and ended seven hours later. the attackers try to capture the mastermind of the raid. authorities expect a group is responsible. the blizzard menacing the eastern united states could rank near the top 10 to ever hit the region according to the national weather service. more than two feet for washington. a foot for philadelphia. and eight inches in new york. some roads are already seen deteriorating conditions as the storm moves north. global news 24 hours a day powered by our 2400 journalists. i'm vonnie quinn. betty: thank you. let's get to our interview some davos. we have a compelling lineup.

erik schatzker and stephanie ruhle asked him about china's slowing growth and a currency moves will help spark the economy. listened to what chan has told you for the last 10 years, they are doing exactly what they told you. china started out with a plan a few decades ago to build out the infrastructure of their city. enormous amount of capital on building infrastructure. when they were building up the , you saw it, it was very tangible. you saw it in the imports, commodity prices, all those areas. it was going to economy at 14% from a low base. once they built all the infrastructure, they told you, they were going to migrate hundreds of millions of people the those cities and take

chinese and make them consumers. they are taking the chinese people and making them consumers. stephanie: but with what money? think about productivity. the peoplee taken and make them consumers. and you make them consumers, they start spending money. but it is called consumer discretionary spending. up assn't show predictable as government investments. erik: they have one problem in the meantime. their reserves are eroding at $.5 trillion a month. -- $.5 trillion. what are they going to do? >> they have choices. is nothing tog it do. they are clearly evolving their economy to a consumer-driven economy. erik: and the next six month, they are going to have to do something, right? > the chinese have taken

multi-decade views on what they are going to do. they have built up their surplus over many years. they may take some action in the next you must to deal with it. do i believe they are going to devalue the currency? i believe that. betty: evaluation. -- devaluation. from thedifferent take chairman and ceo. i would say it was horrible if they devalued their currency. it would be huge, negative repercussions. with deflationary applications, too? >> i really respect the chinese leadership. so much leadership, it is

pretty audacious to transform in -- to a service economy. for them to try to do it in 10 years, we can't expect perfection, but to transform their economy to a highly oriented domestic economy with domestic consumption, a strong currency is fantastic. -- companiesprices are going to benefit dramatically by lower commodity prices for them in the manufacturing process. -- in my mind,d the repercussions are for worse -- far worse. theirre walking away from -- how do they stop the erosion?

states has had a deficit for a long time. let's not get too carried away about what the deficits are. [laughter] may have to do some kind of capital controls and it becomes unsettled. all that selling of their currencies was a domestic problem. it was people leaving, or companies making sure they had the full dollar rate. it was not speculated from overseas. it was a china-oriented thing. capital controls work in the short run. we have seen that before. brazil have that in the last 10 years. capital controls may work for a short time, but over the long run, they don't work. they just have to fix their economy. you have to give reason for

to haveo be -- to want their savings in the economy. that is part of the reforms. what china struggles with -- and this is what some of my conversations are, they has -- have a capital market heavily leveraged on retail. they don't have a strong penchant fund environment. in our view they need to expand an internationalize their markets and allow more foreign institutional investing. that has not happened. every year, you file a license and award you may be $1 billion. it is very managed. open andthey need to expand that and probably have a more -- a less volatile market. betty: that was blackrock

chairman talking with bloomberg. in davos, as we head to break, we see what is on the agenda. mario draghi speaking in germany. will we see another draghi effect? kick off another round of economic numbers. apple reporting after the bell. decision. a rate every single one expects no changes in rates. thursday and friday, we will get more reads on the economy, gdp numbers. your will get its first estimate of inflation. will this drive the ecb to take further action? all of thoseyou headlines to watch for. stay with us.

♪ good morning and welcome back to "bloomberg markets." economist predicting turmoil before the 2008 crisis is less pessimistic about today's global economy. >> i don't think we are back in of 2008 because the amount leverage is not the same and the financial environment are smaller. china is not going to have a soft landing. meanwhile, this map and our next guest draw a different conclusion. we are in a global, bear market. some markets have some 20% or more.

bearish.s now is john -- brian. that doesn't mean we are not in a bear market now, right? correctis a characterization. that was a category five bear market. horrible credit problem and a lot of leverage in the system. knew what to do about it until it was too late. if you look at world markets today, credit is not the problem. the banks are much more well-capitalized and have been lending using conservative standards for a number of years. they don't have the ridiculousness in the rating. banks are not the epicenter of

the problem. of the problem is the lack of demand from emerging markets that is creating credit problems. there will be losses in various kinds of commodities. that is where we see the biggest problems. betty: does that make it a category what kind of market? >> i will go with category one or category two. already down 20ish in most markets. blue chips are the ones not down 20% yet. i expect they will probably get there. the bear market is a long process, psychologically very hard, it goes on and on. side, this is when you get great bargains. this is when you get people selling good businesses. on the other hand, it takes a while and you don't want to be super aggressive because it will

go on. betty: so, you don't want to be by now? we started buying a couple of -- betty: week betty:like what? completed nor plex summer. the issues are well-known with negative volume trend. this is a about a quarter of the retail capacity and is not going away. couple of ones we are working on and i cannot talk about it on air. we are trying to find companies that are durable. there is no existential question on what they will look like. we can reasonably estimate their earnings. math: they are getting sold along with the rest of the market. you mentioned this was a category one or two.

it is based partly on what we saw in china, which is prompted by the commodities route. government --nese the vice president in davos said yesterday, trying to reassure the markets and said the chinese market is going to look after the interests of most of the most of the investors. that was the chinese president. when you read something like that and hear that, -- >> i have no idea what that means. they are going to support their economy and their markets, brian. brian: they have been trying without a lot of success to manage the markets. there is one thing you should know by now, markets don't get managed very well. they need to do their own thing. suppressing people's desire to sell or what not, it leads to effects in other places.

i am kind of more in the george source camp that china is going through a hard landing. they would like to make it a smooth process. but they have been building a lot of infrastructure and real estate and was not without real demand for not -- demand for it. that,ou try to move from it is difficult. is, when youstion hear something like that, and i am guessing the answer, that does not make thoughts more attractive to buy? brian: not specifically. the commodity train wreck tells you about everything you need to know there. supplyas an awful lot of for chinese that was supposed to go up and up and up.

that is not happening. you have to recalibrate supply in a very painful way. moneyare places to make and other businesses, technology, health care, that really aren't part of that. that in thes me is world of industrial demand, things like planes and power turbines, there is a lot to chinese related demand. betty: thank you so much brian. you are in broncos orange. brian: go broncos! betty: morehead on "bloomberg markets."

♪ toty: welcome back "bloomberg markets." i'm betty liu. the president of argentina hit the ground running.

he is now in davos seeking outside investment for his country. he spoke with our editor in chief. >> this year, we are just starting. i think that we are going to be around $20 billion and progressing. argentina has decided to take their place in the global landscape. we have an important role when you talk about security, we are the second country in the world in terms of production per capital and we are going to increase that in 50% in five years. we need a huge clan of infrastructure. clan ofed a huge

plan of infrastructure. we are a huge country. it is very expensive. when you talk about energy security, we are in a middle of a crisis. it supposedly will come back to a stable price. hugeve wonderful and shares. argentina has the greatest potential in mind energy and solar energy. -- and wind energy and solar energy. it is something we need to curb climate change. the -- that was the president of argentina. bp investing in gas reserves in his country.

motors break for general in the first of lawsuits for the deadly ignition switch. g.m. was prepared to tell the jury that the manlike to the the jury washy to blame. the bank boasting dimon compensation for more than a third. that is tied to future performance. investorsmorgan criticized dimon's practices. the dow is up to 30 points. we will have more from davos.

♪ bloomberg'sfrom world headquarters. you are watching bloomberg television. i am betty liu. funny when has more from our news desk. vonnie: with less than two weeks

to go before the iowa caucuses, donald trump is widening his lead. with cnn poll shows trump an 11 point lead over ted cruz. entireine is devoting an article on why donald trump should not be the republican nominee. ailinging to revive his -- jeb bush has enlisted his mom. voters they can trust him. but it also says his brother, former president george w. bush, will join him on the campaign trail. is leader of the armed group now talking to the fbi. leaveaid the group won't the wildlife rescue.

susan hedman is a minister of the epa region that includes fines. she has been criticized to be flint'spublicize that water supply was contaminated. i'm vonnie quinn. davos let's head back to were a lot is happening, including erik schatzker with the founder and managing partner of gdp growth. erik: bill, good to see you here. >> good to be here. it has a very diversified portfolio. your portfolio companies, what are they telling you about the u.s. economy and global economy? >> we focus very much on the micro instead of macro.

we have been able to develop a portfolio that grows at a very rapid -- 30%. companiest building around the world in areas that we have a real understanding. appealing is more right now -- emerging markets, or the developed world? greathink there are opportunities in both places. in general, we have to inerwrite a better return the developing markets. we have been able to achieve great returns in the developing market, but the risk inherent in markets, occurs in these days, the political challenges, transparency issues, etc., means we have to deliver returns that would be attended

to that kind of profile. erik: look at those risk whether they be currency movements, the pace of economic growth in china and what that means for economies in the region, do you feel confident about the prospects for the companies you are invested in? >> it is really a tale of two cities. ath of the broad sw emerging markets. india, turkey -- then you have australia,e brazil, nigeria that are not only dependent on oil, but are also effected by general commodity pricing. erik: you can't paint everything with one brush. >> those markets have a huge opportunity to benefit from historically low prices. , a have an economy in africa

percentage of the population has no energy. a woman in northern nigeria is going to be 80 times or unit of energy that a woman in new york and he would pay. it is a fundamentally dislocated challenge that needs to be addressed and certainly benefited from lower energy prices. do you think this location produced by low energy prices is going to last is mark -- is going to last? >> the fundamental drivers will last for some time. isare in a world where there real slowdown in certain economies that have been driving pricing. there are alternative sources available and we need to get an economy based on that. view onu have to have a the way the economy take shape overtime to be able to make smarter investment decisions. >> more important for us is the micro.

these are based on a view regarding emerging consumer environment that is dynamic and robust. and the specifics of that opportunity, who is the entrepreneur we are backing? erik erik: growth equity is not exactly private equity, but it is related. the question i have to ask is now a better time to be buying or selling? >> certainly a better time to be buying. you see a dislocation like this it creates opportunity. , soprivate market often lag private firms feel like they are worth what they used to be worth. there can often be a lack -- lack in that dynamic. when you are investing in great companies and are disappointed about it, this tends to be a better time.

how stressed do public markets have to be and how long before those opportunities begin to show up for you? >> it very cold over the world. -- it varies all over the world. in india, it was very difficult to get investments done it made a lot of sense. andkey is to be very picky who valuepreneurs what we are bringing to the table and are willing to embrace us as a true partner in every respect. erik: investment cycles and growth equity are slower than private equity. portfolio doour you expect to turnover in 2016? entertainmentftx and built the company from

scratch. it is now a major movie studio. it takes longer because we are building it. other investments that are later staged, even growth buyouts we do, can happen pretty quickly. in some cases, we will be investors for 10 years. we like to be let's of all -- we like to be flexible. it is all about growing businesses and making sure we focus on those sectors that we have something to offer. if we come in and there is a will discussion about if we are the right partner, we are probably not the right problem -- partner. erik: you said you are an investor in uber. ofi think there was a lot from investors not used to investing in public rounds.

very public investors that have never done a kind of investing before. we are going to see a lot of that value retreat. they will likely regret those investments and you will see a recent back to fundamentals. be based onhave to a multiple of cash flows. the fundamental discipline around value investing -- you see it reentered the equation. erik: how long will that take with a shakeout to happen? it is going to take a longer than people think. this is not the bubble of 2000. a bubble implies a pop. this is more like a will be cushioned. -- whoopi cusion.

they don't have to go public. many of them can on their way into those valuation. by the way, this isn't a public bubble? never dissipated in this. this is private investing at large-scale and companies. of companiesumber that are great companies. i look at our own portfolios and i am in writing about where we said. they are great companies that are built to last. erik: thank you very much. founder and managing partner at tpg growth. schatzker with bill. much more ahead. they will have much more from davos. the prime minister of norway will join bloomberg television at the world economic forum in davos, switzerland. ♪

♪ back. welcome this is "bloomberg markets." this is some of the bloomberg's is no/. the pace of oil drilling has some to a record low. gas rates in the u.k. are being used. the note region sea, only slightly higher. crude cells 75% less than it did of june of 2014. mario draghi says the european central bank has plenty of instruments to revive inflation. he spoke in davos today. he says policymakers are words that ultralow inflation will resist. considered adding economic

stimulus. that is your latest bloomberg business flash. let's head to europe where mark barton is watching stocks rallying on the ecb. and also oil prices are added lockstep. mark: as if we did not get enough of mario draghi, we got draghi part two in davos wanting possible stimulus. stock 600 upoday 1.9% yesterday. 3.4% today. 2011.t two-day rise since today's again is the biggest one-day gain since august. only 20 stocks on the stoxx 600. percent, which is the most since august. you mentioned oil, betty, biggest two-day rally since

2009. these that's a mind blowing, aren't they? no surprises to see the oil and gas industry soaring today. the industry group is up by 5%. if you have gone to sleep on this, you may have been depressed. 24, when the eight hour session we had. 700 pointare up over on the dow since wednesday afternoon. you better not have been sleeping after that. we got a lot coming up in the next hour. mark: speaking to the norwegian prime minister, erna solberg, norway is heavy reliance on oil. what they have been doing to try to transition its economy from that stuff. advisor and isef made money in a falling oil environment. i am looking for to asking him

from that -- all speaking to us on bloomberg today. in davos, you know what i am looking forward to? matt miller and battle of the sharks. could it be more exciting? that is must-see tv. [laughter] i will see you in a little bit. for a look at how u.s. markets bloomberg asked abigail doolittle has more from the nasdaq. abigail: the rally is strong. very few stocks are trading in the red. starbucks is one of them. this after the company posted a mixed fiscal first-quarter and offered a second skills that looked at a disappointing street. the company says sales have

slowed overseas and is blaming the paris attacks. it made a dramatic decline in tourism. 80% of analysts are recommended to buy shares. ofre is merely a 20% outside 68. from coffee to cisco -- shares are up of the networking giant. the company has good fundamental growth drivers while valuation has improved on the recent weakness. discount traded at a to the cost. betty: thank you so much, abigail. speaking of cisco, the cup a chairman is in davos at the world economic foreign. he spoke to stephanie ruhle about the new digital revolution. >> we are at the very first inning of what is going to be this revolution. 2015 was the inflection point.

breast is ahead of us. and it is ahead of us. stephanie: france? how did that happen? our company is changing, but you have a socialistic government. but they get it. they are a startup nation now. the president clearly understands what is needed. the prime minister is the operational guy. they get it. defense, they will generate one million new jobs with business partners over the next three years and be educate the population and do smart cities. stephanie: where is the money coming from? if you look at the people who have lost their country -- their jobs, they did not have the skills. >> two issues -- where is the money coming from to generate a new opportunities?

to develop a new set of skills. in france, we are talking about how you retrain men and women in the new internet of everything. we are looking at how to change the whole education system. can you imagine the french state partnering with an american high-tech company? it speaks to how dramatically changes are. is uniquely positioned, whether it is in france, u.k., india, or even china. stephanie: one fear people are having is when you look at the volatile market, all these big, beautiful ideas in the mountains of switzerland -- could that get wiped out? could that be put on hold while companies are put in survival mode while their shares continue to plummet as mark -- to plummet? >> our partners are small

startups. , they watch every ceo know they have to become a digital company. if they do not change, 40% of them is a pair. jamie dimon understands that. doug understands that at walmart. it is survival. stephanie: if your biggest competition is a startup, does this mean they share will be a big acquisition you for cisco? us be very see active like all changes in the economy. challengesrom any stronger than almost all of our peers. we have no competitors from 15 years ago that even exist today. stephanie: wow! >> they are a shadow where they were at that time. this is what companies have to

do. you either disrupt or you will be disrupted. that is what leadership is about. partner in a to way that no other company has ever done with all the major governments in the world. sevres john chambers, a chairman of cisco systems speaking with stephanie ruhle and david westin. still ahead on "bloomberg 750ets," the dow up over points. and oil today is seen the biggest rally since august. went -- is this the start of a turnaround in crude? we will be talking with former shell president right after the break. ♪

♪ betty: welcome back to bloomberg television. your lowd to a 12

prompting investors to buy back record bearish. it is crawling back towards a comeback rally the most since august. can we really consider this rally a rebound? we will bring in former president john hofmeister, currently the ceo of citizens joining us from london. feel like ahis substantial rally. is this a knee-jerk reaction? probably more of a knee-jerk reaction now. if you watch the daily oil price, it is a good way to get a headache unless you are a traitor. traders know the ups and downs, ins and outs. that is their profession. , i an operating company really don't watch the daily oil price because it is anybody's guess any given day. what i watch in fed are the consumption numbers.

the consumption numbers in china of 18% last year. consumption numbers in the u.s. 4% are multiple years in a row. those are great multiple consumption numbers. when you watch the capital spending numbers. those are horrifically below where they were, which says, this will become a rally at some point in terms of oil price because the push outs and the value destruction, and the inability to respond to increased demand is really disappearing rapidly. it is gone now. the industryay could snap back if it needed to. betty: it is like simple math, right, john? john: yes, it goes in and out. [laughter] betty: exactly. i want to bring up a chart, you can't see it, but i want to bring it up for our audience. people are charting whether we

are seeing a bottom and at what point can we see a state of a rally. ,specially given today's move we are closing this gap that analysts have pointed out. at $34 a barrel, once you hit above that number, you will see a rally, a substantive rally in oil. does that sound right to you? john: yes it does. what i heard out of saudi arabia, when it is in the 20's, they call it you rational. and oilsaudi's to call price a signal of something. we don't know quite what. they don't like it, that is for sure. a lot of the future of oil depends in large measure on saudi arabia's in number. and whether it stays the same, goes up, or goes down. the whole world is watching every day what is going on in saudi arabia. but also russia and the u.s..

the u.s. is the only country cutting back oil production. betty: citigroup calls buying oil the trade of the year. would you agree? john: yes. it is a very challenging, should you wait? did you buy now? what are you doing in terms of protecting your future? this is a tough business to decide -- if you are an airline, buying hedging and buying futures, you are going to get hurt, or help yourself? you just him now. betty: good to talk to john hofmeister. we will have much more from davos. ♪

good morning, i am betty liu, welcome to the european close.

we wrap up a trade in the next hour. marking that -- marking the biggest two day rally since 2011. ecb president mario draghi, the european close starts right now. betty bank we are taking you from new york to london in the next hour -- betty: we are taking you from new york to london. >> he says the ecb has plenty of at theents determination, the willingness, and the capacity to use them as well. european stocks rally right across the region.

we are on track for our first weekly rise. at the top, the biggest two day increase in over four years. addedllion euros has been in the last couple of days. where oiln a year stocks has been decimated. we have seen basic resources up 7%. forget it was last friday when the stoxx 600 entered a their market falling 20% from its april high. the euro is falling for a third day against the dollar. remember the goldman sachs chief currency strategist? back then on december the third, when the ecb disappointed many in the markets, robin rooks said the euro could fall 3%.

goldman sachs said it wasn't so bearish on the euro. brooks has his tail between his legs today. is going to hit $.95 against the u.s. dollar in the next 12 months. they are bullish, they remain oldish, despite this drop we have seen in european equities. european strategists remain bullish. we have surveyed them and they say the stoxx 600 is going to rise 20%.

about 1% of the nasdaq, up by

2%. a some superlatives. we are seeing a big turnaround from this past wednesday. we are just right below that. with the nasdaq we are on track for its best gain since september 8. a lot of this has to do with what is doing -- what is going on with oil. can see over that time frame it is up 11%. about 11.25%. we are parrying some of those gains from earlier. above the $30 barrel mark. take a look at my terminal right now. i want to show you the svs function. volume by sector on the snp. this is energy. it is up against the 20 day

average. is the only sector above the 100% mark, following 80% of financials. talking about how everyone is piling into energy. this is exactly what is happening. let's take a look at what is happening with oil stocks in particular. are the majors with the biggest wave on the s&p. all up on the order of 1%. one stock that is not doing well, it ended on a downer. long, not so the great, down 10.5%. philme in with profits the i want to shave s eating

continue -- it is not what uri are accustomed to. i are operating in -- you or are accustomed to, we're operating in a different reality. betty: we knew that earnings would not be that great from many companies, amex included. courtney donohoe has more from our news desk. at least 42 refugees have died when two ships sank overnight. the greek coast guard is rescuing survivors and bringing them to a nearby island. smugglers have loaded ships in turkey with asylum-seekers. an american has been arrested in north korea. the virginia -- the university of virginia student is accused of plotting against the government.

aim at theorm taking east coast could turn out to be one of the 10 worst ever to hit the region. expecting to feel the brunt of the blizzard. new york may get up to a foot. been canceledave in the next two days. hours per day. more than 150 news bureaus around the world. >> take a look at the japanese yen. he downplayed the recent market. with the next meeting a week or so away. here is some of his interview from dad post. true in the last year wedon't think

will continue. some say it will put them out. i don't think they would be -- that would affect the inflation rate. in u.s., europe, or japan. it is 1%. and once oil prices are up.ilized, then it will go rise, irices do not think oil prices will rise. a >> and other deflationary pressure from yuan devaluation

-- and other deflationary pressure from yuan devaluation. are you satisfied with the current state of inflation expectation? stage, inflation expectation -- >> at this stage, inflation expectations are well-maintained. i don't think inflation expectation in japan has declined. it affects even the future and inflation expectation. not much. >> not much, but a little bit. like inflation expectations in the u.s. and europe, they are slightly affected.

like in the u.s. and europe, not much. >> do you have the tools to combat that? >> we have currently been implementing monetary easing. we expand our cute qe if necessary. >> soaring six to 7%. hopes there will beast -- hopes there will be further stimulus. prime minister of norway joins bloomberg television in devil's in switzerland. stay with us.

this is the european i'm mark barton. betty: let's head back to dabo swinney bloomberg -- head back to dov vos -- head back to dov -- to davos. us onyou for joining bloomberg. we have george soros telling you this is back to 2008. how worried are you about finances in norway? we still have economic growth in norway. mechanisms -- our currency is depreciated. it means other parts are taking up. this is the lower level than last year.

we need to create jobs in other areas, new feet to stand on. we don't call it a crisis. we have had good politicians early on. deciding not to use up all the money in the economy with having therge fund and stabilizing budgets use of money. >> let's assume higher oil prices aren't happening anytime soon. would it help you if the currency was weaker? weekson't think we need a -- a weak currency. for the time being -- the producers are making quite a bit of good earnings. we do also see that there is another part of the economy.

test

there is a debate over whether the sovereign fund should take more risk to increase allocation to equities. what is your view? >> we should have a conservative fund but one of the things that is good with the fund is that it has such a long-term perspective overinvestment, it is not a quarterly run and profits, like most of the changes, takes about 5, 10, maybe 50 years for some investments. that means you have to look at long-term risks which is very different. assessmentbe a new of how the portfolio will be put together and will be put on a committee which we do. of experts to give advice and then we make a decision. we are predictable in our decision-making. this is the value and the fortune. >> thank you for joining us. the norwegian prime minister.

20 more coming up from -- plenty more from davos. we will be back in two minutes. ♪

>> let's get back to highlights from davos. george osborne spoke to us earlier today to discuss one of the hottest topics on his agenda. britain's eu referendum. + many -- >> many people would like to stay in the european union but that is not their decision, it is the decision of the british people. we want to achieve reform and european union to make europe more competitive and a forum to protect countries like written that do not have the euro to make sure this organization works for members like the u.k.. if we get the reforms we will say to the british people, let's stay in this reformed europe.

>> are you not risking the stability of u.k. for the next eight to 12 months for renegotiation which are important but possibly not crucial. >> it is poor and -- it is important to britain's future that we are in a reformed european union and our continent is in price with the world economy. it is important that if we will be in european union we can coexist alongside a eurozone that is integrated migrating a financial union. i do not detect at the moment that it is deterring investment in the u.k. we are one of the bright spots of the global economy. getting the lion share of investment into europe. our jobs are being created in our economy. i do not think that uncertainty is putting off investment. pulling out of investments are they not saying, i have investment decisions to make this year but i will wait?

>> no evidence of that in the moment. there are signs you might see david cameron, prime minister .oping to strike its deal a >> much more a head on the european clothes. share hising to winning strategy, what is next in a few moments.

>> welcome back to bloomberg markets.

we are coming off of our highs of the session. >> just over the highs of the day. that performance of the stoxx 600, an increase of almost 5%. biggest rally since 2011. 400 10 billion euros added in the last couple of hundred days. down to one man, mr. mario draghi. the ecb has plenty of instruments and the determination and willingness and capacity to use them. .6 talks fell volatility falling by 10%. it was all about the oil and gas industry. them, thes among index