welcome to the show. you are watching street signs. >> these are your headlines. >> european stocks bouncing back following a volatile session in asia. the dax steadies after posting the biggest one day loss since august yesterday. >> china's central bank tries to calm the market with the biggest injection since september. this amid reports the regulators may restrict stockholders. >> shares in the german car

maker are sent into reverse. >> and u.k. retailer next gets the christmas blues blaming warm weather for disappointing steals. marks and spencer also lower ahead of earnings results on thursday. good morning and welcome to street signs. well, here we are day two of trading for the new year and european stocks trying to get in a bit of a relief rally here but the overall stoxx europe 600 with well over 2% and we're hardly seeing a recovery of the losses in yesterday's session but key sectors back on the rebound. let's look at the sectors one by one here. no surprise that the hardest hit sectors and the likes of basic resources now on the rebound. up 1.3% for basic resources. also weakness in the financials as well. moving on the upside today but

chemicals still in negative territory off 0.4%. similar story for oil and gas dipping back into the red. we did see oil prices retreat despite a balance on fears over tensions with saw day rab i can't and iran. more later in the show. >> off about 0.2% due to weakness after disappointing trading results out of the u.k. we'll talk about that as well. european markets one by one here. ftse 100 up 0.6%. the xetra dax up 0.3% but the manger man market was lower by more than 4% yesterday. it's worst one day performance since black monday and august. so not an overly inspiring performance there. the french cac 40 up 0.2%. now let's give you a look at how the u.s. markets are called to open after the dramatic sell off on wall street yesterday. the only major market set to open higher as well as the other

indexes still struggling in negative territory but more or less flat at this hour. meanwhile, of course when we look at the sell off yesterday initially triggered by fears over china, today the pboc injected around $20 billion into the chinese market and that's the big he reverse purchase operation since september. this despite a stock selling ban scheduled to expire on the 28th: let's get out to sri in singapore. here rewith again. stocks in mainland china slipping into negative territory at the close. what's going on here? >> there is a lack of confidence in the authorities. let's put it that way in both the regulators and the pboc.

now, they're evolving as well but it doesn't inspire a great deal of confidence as you eluded to. in the here and now we're seeing a degree of calm but it's an uneasy calm after the pboc indetected $20 u.s. equivalent into the markets to help with short liquidity operations so that's helped to restore some confidence but we're still in for a bit of a rough ride this week in the near term because of what you wanted out earlier. friday we get the sale shares expiring. so what they do with the shares they have under their dealt is a big open ended question. are we going to see any selling pressure in the days leading up to january 8th is another big

question and on top of that the macro data. still not out of the woods in terms of the economic sluggishness we're seeing in china externally so another test of the market and the broader economy both on the external front and internally and of course the import picture is a proxy of domestic demand. so here we stand. degree of stability but there's a lack of confidence in the authorities in beijing. let's remind ourselves that the market seems to be wanting more stimulus but can the pboc deliver? they don't want to encourage asset bubbles.

>> back to you. >> thank you for that. squoining us now is the strategist at bank of america merrill lynch. there's a lack of confidence in the pboc and what we have seen is the market selling off and the chinese government coming back in and stepping in with more stimulus and then the market stabilize but do you think that won't really work anymore in 2016? >> well, i think the pboc, a number of the central banks have a question mark over what they can do going forward but we flagged up that china was a big risk. we know they're going through a transition and the pboc are trying to stabilize things and to wake up and see the chinese equity market at 7:00 people are questioning what's going on. what are they trying to do. obviously they were weaker yesterday.

statements out over the weekend. structural reforms other than demand side reforms. are they going to be able to stabilize the economy. >> what are they asking you? are they still wanting to take a risk or do they think i've had enough of that volatility on the first trading day of the year? i'm done with volatility for the year. i'm taking risk off the table. >> i'm not sure they would have taken risks off the table yesterday i. was largely futures lead the immediate reaction is to mark everything down in europe. i don't think what happened yesterday is as serious as this. but the market movements seem to be getting bigger. the reaction to things, markets

seem to be thinner how do i cope and adjust my strategy and people are scratching their heads and saying how do we adjust our strategy for that. >> is this a case of more domestic focused as opposed to the emerging market exposed? >> that's been our strategy for a little while now. we're more focused on the plays and china and commodity plays. the other thing you have to do is buy yield. companies that are going to deliver descent dividend yield, stable dividend yield. dividends that can grow will be the ones i think will be in favor.

that's a strat sqegy that perfod well last year and this year. there's quite a lot of banks and also the large cap pharma. we ran a screen back in september and wouldn't be that dissimilar today where we look for stocks with over 4% dividend yield that was well covered. we found nearly 100 out of the 600 stocks in the stocks 600 to fit that criteria and they had a dividend yield of 4.8%. so there's a lot of stocks you can find if you're an income investor in europe. >> keep it focused on the yield then. >> now just want to bring you the latest from the ecb. the ecb says that capital requirements from euro zone banks will gradually increase from 2015 to 2016 including the effect of the phase in of the

combined buffer requirement. we have seen so much activity over the last couple of months or so. europe and the u.s. caught a cold yesterday but some are down playing the impact of the market move. we spoke to jon williams about the threat a slow down in china poses to u.s. growth. take a listen. >> china is undergoing a pretty significant piano voluvot in te slower growth and manufacturing and more to consumer spending and service sector. to me it's not as surprising maybe that we're seeing weaker data in terms of manufacturing. it's part of a process going on

over the last couple of years. >> he sees no alternative in catalonia. they would not support the catalonian leader with a new collision. it could also ease pressure on the rule party to form a grand coalition with the spanish opposition. standing down as the leading candidate in order to form a pact would not be very democratic. i have to say nancy, this is all really, really confusing and all i know is roughly a month after the elections in spain, we still don't have a government. we saw the elections being inconclusive. no major party saw the main majority and we're trying to figure out who is going to form a coalition with whom. it's becoming a new portugal situation where we had a government only to collapse a few months later. >> we could get fresh elections here and as you can see it's

exactly what he wants to avoid here. and it risks up ending a recovery that's been one of the strong points in europe and that could be concern to investors. however we did see market reaction immediately after the election results. seems to be a huge fear among investors. so this is a recovery taking shape and you have to wonder what happens if we go into new elections. >> but the market already priced in some political uncertainty. it was down 4 or 5% or so. the dax was up 10%. the ftse mib was up more than that. it has been priced into the equity markets and bond markets. i'm not so sure. that's where the ecb effect is coming in. >> we'll have to see what happens when the coalition talks continue. >> well, still to come on the show, more than just another

speed bump. volkswagen could face a massive $90 billion fine as the car maker faces a fresh lawsuit from the doj. how will vw steer around this one? we discuss after the break. we also cut out to saudi arabia and a host of other countries cut ties with iran. >> plus it's the sweet smell of success. how do you know when you truly made it as a world leader? we reveal the most accurate barometer coming up.

>> it's a big week for u.k. retailers releasing sales figures for christmas. did santa bring them what they were hoping for? maybe not. it was a difficult period with discounting the terror threat in europe and unseasonal weather conditions all weighing on trade. now they announced their holiday scorecards later this week. this morning, 4th quarter sales disappointed from next which the british retailer attributes to warmer weather. now the british clothing brand says it is budgeting for sales growth of between 1 and 6% this year. shares trading lower off by 5%. i have to say shares have already fallen 9% in the month of december.

unconcerned about weaker trading so in a way i would have thought some of this would have been priced in. we knew about the heavy discounting. the weather was awful for many of the retailers but it was even worse than people thought. >> the trouble here too was that the guidance was already taking it into account. so the fact that it was below the guidance is concerning investors here. let's bring in an expert on the subject. managing director of global consumer and retail. beth, so much blame is coming on the weather factor here but is there something more sinister here? is it cemented a trend which is competing with online sales and other retailers heavily discounting. >> thank you for having me on the show. this is one of my favorite topics. it gives us scope to cover a couple of different topics within the sector. the first thing that we can look to is the coming days we'll hear a lot about weather. we'll hear a lot about football.

mall traffic and days in the month to sell from and when we hear these things i think they are a group of companies that emerged and lead us for a long time. we must feel that the sector is growing and some of the emerging companies are not being tracked in a traditional manner for investment. so if we think about the businesses that have not driven growth yet i'd like to see them possibly become public themselves and we will then see me tricks that we can think about tracking such as -- not black friday but cyber monday and not mall traffic but fed ex deliveries. >> who are the big winners of the next decade that you're

talking about? >> let's look at the attributes that are going to define those companies. the number one theme is lifestyle. so we switched within the last ten years. two things have happened. one e-commerce but i'd like to make it a deeper conversation than saying traffic is migrating to e-commerce. we shifted from within globally looking at the consumer pie to a need culture to a want culture and we consider that want culture when we make a consumption choice we don't need to buy a shirt to wear a shirt. we buy a shirt to tell us who we think we are and fill that need on the day. that's the concept of lifestyle. so the companies that are going to serve that best are not only omni channel but lifestyle businesses that address a deeper need with us within consumers. it's not just an e-commerce migration. it's a virtual kaleidoscope. we have some kind of a small

show room. >> does this suggest they need to target a niche segment? some might say part of the problem is they don't have a focused clientele. >> i like the term mass niche. it will continue to be a team and even along the lines of personalization and catering to consumer brands that they seek themselves and it's a much flatter industry to enter now. for someone like next or any leading global retailer, the question is how to become more niche to your customer and respond to their needs on an evolving basis. the channel continues to change and the offering is shorter and shorter cycles of innovation and that's the media channel now where we're browsing and clicking and looking for the product to be an evolving carousel responding to our needs and predicting what we should do

next. some of the best companies have predictive software that do their product based on algorithm prediction. so they decide what to source based on what customers are searching for. that's becoming seemless with this idea of a person as a media channel that's predicting what they're going to buy. >> we have to leave it here. >> thank you so much for that. >> new car sales have risen 5.3%. new car sales were up to 7.7% in the month of december to about 247,000 vehicles. also we're getting news from saudi and they have cut oil prices for the month of february. they said the february arab light crude oil osp at minus $4.85 barrel.

i have a lot more commentary but oil plus 15 cents barrel and the official selling price to asia at minus 80 cents so once again they're trying to defend market strategy versus the price. >> this is a continued trend. lowering the prices to china and asia as well but you have to wonder, look at the latest data. the demand problem not going away any time soon. you were just touchings on german car sales increasing. one is volkswagen and the stock is trading lower as it could be fined up to $90 billion as they face a lawsuit filed by the u.s. justice department on behalf of

the environmental protection agency. they violated the clean air act in almost 600,000 vehicles. joining us now on the phone for more on this story is the head of global automotive research. pleasure to have you with us on this story. i know that you pointed out that in some ways this civil filing was expected. we knew it was on the table when the scandal first broke in the united states but i have to ask is the real concern here that it appears that the epa and volkswagen aren't any close tore coming to terms when it comes to a revelation of what the recall process will look like in the united states. >> exactly. this civil complaint was expected following the notice of violation from september and november last year. when will they come to conclusion. how the mess can be fixed.

what they can do to recall these cars or do buy backs or both and move ahead and do more certainty to consumers ordealers. >> had the chance to ask the volkswagen ceo what was holding up the discussion with the epa and he seemed optimistic that they were getting closer to a deal. that something would be reached in the early weeks of the year. the epa itself is saying so call recall discussions with the company have not produced an acceptable way forward. does that sound like two or three parties at a table that are any closer to an agreement here? >> to be frank i was hoping for an agreement early december. then it was moved to late december. now it's early january. this is a very important matter and it's extremely important for shareholders as you can see tod

today. there's the detroit auto show where they're presenting next week on tuesday and i hope by then we'll get more clarity. >> so far the doj filed civil charges. what's the hikelikelihood of th also filing criminal charges. >> there were also criminal charges involved and i wouldn't be surprised if that's next on the agenda. it's just work in process so i would expect criminal charges. >> so far they set aside 6.7 billion euros for that and they also negotiated bridge financing with a number of banks for 20 billion euros. they have roughly 20 billion euros in cash. at what point, at what level of the fine -- are you going to be worried about the financial viability of this firm?

>> well, the 6.7 billions do not cover any potential legal fines. that's just for the recalls, let's call it the technical market effects really. on our numbers over a two year period if this is adding up to something more than 35 or 40 billion it would be more worrying for vw's situation. that's even very conservative. net cost of 25 billion all in for the next two years and that's something that the company can stomach. >> are you maintaining your buy rating on the stock? and what is your buy rating at the moment. >>ly it's is biggest turn around story in global autos.

we have a 200 euro price target. the company replaced 14 board members now these are normally the situation for shareholders to get involved if you can live with the volatility that will be as we continue to see today for the next three to six months. >> thank you for joining us. that's arndt ellinghorst. >> if you have the stomach for it, why not. but there's other car makers out there like bmw that might offer better returns. let's move on. french rivals orange and bouygues trading after confirming they are in preliminary merger talks and

signed a confidentiality agreement but they're not tied to any particular outcome. all the providers are surging. we're seeing even bigger advances. why? it's because people are hoping that this price war that we have seen taking place the last couple of years would finally come to an end but i believe there might still be regulatory hurdl hurdles. >> telecoms up by 2-thirds of 1%. meantime, they received more than one preliminary third party proposal to buy the travel company. it is evaluated all of the strategic options but there's no guaranteed offer at this stage. the statement follows an overnight report that the swedish buyout group is eyeing a bid. they hired morgan stanley to

investigate breaking up the company amid tough competition in the travel space. >> still to come on the show, shares in gun companies are soaring as president obama takes action over gun violence. we'll get a look at what to expect from the president's speech right after this break.

>> european stocks bounce back. the dow steadies after the biggest one day loss in august. >> china's central bank tries to calm the markets with the biggest cash injection since september. this reports they may restrict stock sales on large shareholders. >> united states sues volkswagen over the emissions scandal and billions of dollars in fines sending shares of the german car maker in reverse. >> next gets the christmas blues. and marks and spencer also lower ahead of earnings results on thursday. >> some u.k. data to share with you. construction pmi rising to 57.8 in the month of december. this versus a reuters poll of 56

so easily beating expectations and quite a nice pick up from the november number of 55.3. remember that was a bad number. the second lowest number of the year. there has been a bit of a pick up in the u.k. construction space though this follows fairly poor manufacturing data out of the u.k. yesterday down by 0.1% on the day. let's have a look at the other big pairs. yesterday was all about safe haven flows into the japanese yen and swiss frank and we've seen risk appetite coming back a tad but the u.s. dollar is still lower against the japanese yen at 119 and u.s. futures are looking like this. they were more positive just a few minutes or hours ago and they have turned negative. the s&p 500 taking fair value

into account. seen off by 7.5 points. dow jones could fall by 69 points and nasdaq to fall by 12 points. we were expecting to see a rebound after the worst start in the year for the s&p and nasdaq since 2001. the dow off 1.6%. the s&p losing 1.5%. the markets did close off session lows and the stabilization we have seen across europe that didn't last very long either now falling in yesterday's trading session and the cac 40 despite the out performance is down by 0.4%. now initially we did see the rebound but now volatile trading

leading it lower to the tune of 0.3%. the nikkei off by 0.4. the kospi with a gain of 0.6%. so overall can you call it stabilization? what is this? >> they anervousness in the mar. gold no exception yesterday. a real rally we saw in the session hit the highest levels in almost a month. up 0.4%. this comes as the rebound we saw in the asia session abated by the end of closing. now the european markets come off as well. >> also want to show you what crude prices are doing. they were edging higher this morning. now they're mixed. brent crude is off by a third of 1%. pretty much flat on the day. chinese stocks did try to stabilize following yesterday's heavy sell off gains. they are expected to be capped

after that report found that crude inventories hit an all time high last week. let's talk more about it with the oil and gas analyst. i want to kick off with this report. they're reporting over 480 barrels for the week for january 1st. at what point will it filter through to lower inventories. >> we have seen the production stabilize again in the u.s. i don't think it's going to last but the drop in production we were seeing to just about the end of last year started to stabilize and we started to see it go up slightly. >> but that's counter intuitive. what was the incentive for many u. s. producers? because we saw u.s. oil prices, wti below 40. why would they pick up production again?

>> these are investments made in place. some of these people want them to be flowing in. if you drop production you don't get the revenues you require to even just sustain your company and two, there's a lot of oil companies whose break evens are not that high. still looking at mid 35 to around $40 barrel. so these are the guys that already hedged and are ready to produce and invested. i also believe it's due to tax incentives that try to reduce it and try to store the oil to get tax incentives. >> the rig report, the supply concerns out of the u.s. helping to reverse the initial pop we saw on were risk about tensions between saudi arabia and raeb. the fact that the gains in oil

didn't hold despite the major producers involved in escalations of tensions, does that surprise you and suggest it will take quite a huge factor to get additional upside? >> i believe there's a huge risk premium out of the middle east region. especially if iran and saudi arabia were to go into an all out conflict. so there's a potential but we haven't seen the extent where the supply will be disrupted and because we're not seeing that yet and we're looking in a market of oversupplied crude in excess of 1.5 to 1.7 million barrels a day i'm not surprised that the markets that gave the knee jerk reaction yesterday have come back to reflect the

reality but also the demand out of china. it's not going to offset the decline in the industrial and manufacturing side. >> the demand picture is not looking that great either. 2015 was around 1.7 what we saw on average but we started to see slow down from the main driver which is is china and also u.s. china has given a contraction in demand year on year growth of close to 1.8%. u.s. growing at 4.4% has slowed down year on year. so 16 will also have a pressure because of high base effect so that will also play an impact in

2016. >> will wti trade at a premium against brent in 2016 once the oil exports pick up? yes or no? >> it could but not for a long time. it makes no sense. still expecting wti to move and that cost has to be taken into account. but when the stocks go down, you could see that for awhile. >> shifting focus, u.s. president barrack obama is said to outline executive actions for gun violence later today. it's expected to include details on measures to expand background check which is the president says are within his legal authority. speaking to authorities before the plan was made public the president said while the executive actions will not save every life he hopes the changes will make a difference. >> although we have to be very clear that this is not going to solve every violent crime in

this country, it's not going to prevent every mass shooting. it's not going to keep every gun out of the hands of a criminal, it will potentially save lives in this country and spare families the pain and loss they suffered as a consequence of a firearm being in the hands of the wrong people. i'm also confident that the recommendations being made by my team here are ones that are entirely consistent with the second amendment and the lawful right to bear arms. >> tracie potts is in washington with the latest. we heard president obama make the case of how this executive action falls within the legal mandates but we already heard a strong reaction from republicans in congress. does this suggest we're gearing up for a longer political fight here? >> no question about that. it's one we expected.

it's been coming for sometime. paul ryan, the house speaker here says this is an executive overreach. we're hearing from republicans on the campaign trail like marco rubio and ted cruz that say that the president is running completely over the second amendme amendment. specifically he wants to focus in on gun shows. people that want to see gun restrictions said for a long tihathis is a loophole. federal law says if you're selling a gun for a hobby you don't have to have a federal license. what the president is directing federal agencies to do this week is say if you you are selling guns at gun shows you have to have the license which requires you to do a background check on the people purchasing those guns. so the upshot of this, the effect of this is more people buying guns at gun shows will have to get a background check

and that's where he will see quite a bit of push back on this. >> thank you so much for that. tracie potts there at nbc news. >> also worth mentioning that the gun related stocks was mundane in anticipation of the sales. meanwhile cabela's was trading slightly higher even as the broader market slumped. up almost 6% people are rushing to the stores before these laws change. >> absolutely. >> let's switch focus. the world's largest consumer tech conference kicks off in las vegas tomorrow with 3,200 vendors offering a glimpse into the gadgets of the futures and the world's first smart bra. do we not have the pictures? we don't. >> victoria's secret angels

modeling the smart bras. >> i'll leave it for later and one is facebook owned occulus. last year the company suggested the head set and computer combo could cost $1,500. it comes with two games to get going straight away on the device. head to cnbc for more on that. >> what makes a tech super hero? we spoke to innovators about their journey and what to expect in the year ahead. here's what he had to say. >> i went to school one day and asked a kid, could you make me something that meant that i wouldn't get logged out of my game? and he created a visual basic mod. i just pulled up and it pressed the key every two minutes and i used that and put it on the internet and i got like a

million downloads. this is well before phones. >> for me at that moment i recognized the power of the internet and the reach it got but as a 14-year-old boy it was really cool. but that was probably the moment that i knew that i wanted to be in this industry where you can touch so many people. >> i didn't think i could do my job. i rarely sit at a desk now. augmented reality will be a place of massive growth in the coming years. i'm really interested to see what augmented reality can do. bill gates made this major really amazing strategic move to give away his technology for free to all people so you would have windows working on your machine for nothing and we're watching the likes of google play these games again. like the move on android.

we're watching people repeat historic trends and for me, bill gates, microsoft, they paved the way in that. when i got my first phone at 14, you have a phone, it would last almost all week. you know, it would last forever and now you buy a big phone to get day and a half battery. i don't know -- i feel like we have moved backwards in terms of battery life an it's painfully annoying. >> and for more from our tech transformers special report head to cnbc.com. >> as we head to break we leave you with live pictures from paris where the french president is unveiling a commemorative plaque honoring those killed at the kosher market last january.

>> it's the focus of investigations into the video which shows the execution of five men alleged to be british spies. no official confirmation of the man's identity but david cameron dismissed the video calling it desperate stuff. the taliban claimed responsibility for a suicide car bomb attack near kabul international airport that wounded civilians. thousands gathered to welcome the football team on the return from india but had dispersed by the time the bomb went off.

meanwhile a second car bomb attack earlier on monday did not kill anyone except the attacker according to a police spokesman. and donald trump released his first television campaign ad on monday and they'll start running in iowa and new hampshire today. the 30 second commercial highlights his tough stance on terrorism and immigration. however the trump campaigned acknowledged that video footage showing people streaming across the border was actually a spanish enclave in morocco. >> and a new perfume has gone on sale in russia. the scent is titled the leaders number one in sold in a black bottle featuring putin's profile and retails for about 6,500 rubles. that's $95. quite a steep price there and shame this came out after christmas. >> $95. i don't know if that's too pricey for many of the russians.

that continues after they joined the kingdom in cutting relation with iran. the uae which is home to hundreds of thousands of iranians also down fwraded it's diplomatic relations. let's get out to hadley gamble that joins us live and we're seeing more inflammatory language coming out of iran. the president saying that saudi arabia cannot hide it's crime of executing the cleric. >> so the kingdom striking back again. they're going to halt all trade with iran as well as commercial airline fights. they're taking this to the united nations. take a look at what the saudi ambassador to the u.n. had to say. >> those attacks were

unprovoked. they were very serious violations and of course a serious violation of the protection of diplomatic offices. >> amid the geopolitical fall out from this does anyone stand to benefit from what's happening here? the answer to that is yes. domestically iran will benefit from the fact that they have saudi arabia i don't to bash and here in saudi arabia they'll benefit as well. this is a country been at war now for several months. the war in yemen hasn't seen too much progress so far so the fact that they'll be able to bring out a new enemy or rather an old enemy with new and inflamed rhetoric and that would be teheran is probably a good thing for the administration here and you have to also remember there's a bigger question in terms of the oil price.

oil moving among mideast tensions the last couple of days and this is a country that is now going to be cutting back. this is something that is unprecedented in the history of saudi arabia. at least the modern history. they'll be adding subsidy and talking about cutting back in terms of the things they'll be able to do for citizens. it bases it's economy on oil prices and if you're looking in terms of the huge deficits for this country going forward they'll have to be cutting back and that's something that very haven't seen so something very difficult to digest over the next year at least. so good news in terms of what they're doing in terms of changing the dialogue or change the narrative. carolyn. >> thank you so much for that hadley. >> well, let's get another check on how u.s. markets are called to open because there was a lot of optimism and hope that we could see a rebound in the main tarkts after the sharp sell off on wall street but that's not the case. all three major indices called to open lower.

dow jones off about 50 points at the moment. the nasdaq did start earlier in the day but now the implied open is for negative 8 points. >> european markets because the early rebound in the session has now been retreating. xetra dax off 0.3%. this after it fell more than 4% the first trading day of the year. also slipping into negative territory. the only major markets and positive territory at this hour. meanwhile, the initial sell off overnight was kicked off by weakness in china and today the stock exchange is instructing investors to hold off despite a stock selling ban which is scheduled to expire on january 8th. now meantime the pboc injected around $20 billion into chinese markets. the biggest reverse purchase operation since september. now joining us for the wild market moves is the global head of equity derivative strategy. thank you for joining us.

delighted you're here to help us make sense of what is going on into the new year. such immense volatility and yet some significant moves from the chinese regulators earlier. does this suggest it will continue to dominate it here as well. >> that's exactly right. chapped off what was a trickty 2015 for most investors. we take the first day of the new year yesterday and we get pretty much the same. now people are just waking up from the new year. if the volumes are low. therefore in europe or the u.s. clearly volatility will tend to be higher and what we see in china does not help.

i would rather focus on the chinese economy rather than what is happening in the stock market. i think what is most important is what is happening in the chinese economy. this remains one of the greatest unknowns as we go into 2015 for investors and what we see for the first few days is we still have no clue. manufacturing data remains weak but what we tonight know is what is the underlying trend of growth for the chinese economy, particularly when you focus on the faster growing services sector and the consumer. >> but it's not just the chinese growth that's weak. ism really disappointing. construction disappointing to the down side. do you think investors are concerned about domestic growth in the u.s. and does this picture look like one to you in which the fed can really hike four times next year? >> that is a very good question, nancy. first of all i share the

concerns of investors. i look at car sales and i ask myself is it possible to see car sales annualizing at over 18 million sales vehicle ace year in the u.s. the answer is probably no. we probably had a catch up period from the post 2008 financial crisis until now but it's probably done. so my feeling is we will see some of what of a slow down in the u.s. this year and the suggestion is that a fed may have to pause before the hikes are completed which is what the futures market is already telling us. >> you say don't read too much into the early market moves. but still they're scratching their heads. can you tell us more about whether you want to be in equities or bonds? bonds did well last year. >> they did okay, i wouldn't go too far. the truth is most asset bubbles are fairly poor last year so for

investors it was pretty tough. you really didn't make much money unless you're incredibly lucky or clever. this year was tough. the economic situation wasn't good globally. they present interesting opportunities. more in europe than in the u.s. emerging markets but there's other asset classes that are interesting such as for instance, commodities. this is an area which has been awful since 2011. people hate commodities today and that's why a contrary juan value investors might look and say not all commodities but there maybe some that are now looking finally interesting. >> so contrary juan on that viewpoint but what about emerging markets? i believe on that perspective you're still pretty much consensus because you say steer clear of emerging markets, still. >> i think it's still too early. >> why? >> why? >> that would be the perfect contrary juan trade.

>> it would be if you could have a sense of where the bottom is. the problem is pulling back i still don't see the bottom. remember a lot of emerging markets are driven by commodities. so if for instance coffee does well maybe we can look back at brazil as a contrary juan play. maybe but do i want to take the emerging markets in the equity space? no. you might be able to cherry pick certain countries or regions. i would still favor asia. i still think japan is interesting in the developed market space and i also think that some of the asia x china, x japan areas are interesting. >> we'll have to leave it here. thank you for that. >> we'll bring you euro zone inflation data after this break. euro dollar currently at a one

month low and german ten year bond yields also trading lower. >> and for our viewers in the u.s. we now hand you over to worldwide exchange. thanks for watching.

>> china's central bank injects $20 billion in the market in an attempt to stabilize a turbulent start to 2016. >> u.s. equity futures pointing to a regulnegative open on wall street after the worst start to the year in 2008. >> we're getting the first look at a sleek and sporty new concept car today. think part corvette, part bat mobile. worldwide exchange begins right now. ♪