hi, everybody. good morning. welcome. you're now watching "street signs." i'm louisa bojesen. your headlines today, a bleak message from christine lagarde. the imf chief calling for stronger action from policymakers to turn around fortunes. >> we are actually growing, and that is good news indeed. the not so good news is that recovery is too weak, too fragile, and its durability is at risk. the dax leading european stocks lower after german factory orders fall unexpectedly

in february and the nikkei hits a seven-week low. shares in peugeot in reverse. ubs calling the margin guidance conservative. and more than $20 billion wiped off the value of allergan on fears that new tax inversion rules could scuffle the tie-up with pfizer. hi, everybody. welcome to the show. we've got some data hitting our wires here at the top of the hour. eurozone business growth barely seeing any acceleration for the month of march. we're just looking at the time services pmi, 53.1 for the eurozone according to market. the flash estimate was for 54. so that's coming through a bit lower than that. the final reading in february, 53.3. again, the reading we're getting now, 53.1.

so we're at a 14-month low in essence. final services new business pmi for march, 52.7. also at a 14-month low. so contraction seen there, which is also a little bit weaker than what had been seen previously. so that's data just hitting our wires right now. important to mention as well, as we head into this next hour, christine lagarde still is speaking in frankfurt. the head of the imf essentially saying it's nonsense that the imf wants a greek default. there was speculation that was one of the strategies they were pushing towards. lagarde also talking about how the global economy is not in a crisis, but that it the recovery

is too slow and fragile and downside risks are increasing. she's saying global policymakers have to take strong action to counteract the loss of growth momentum. these are just some of the lines lagarde has been giving us from this live conference that's taking place in frankfurt at the moment. now, just recapping our european markets. you saw the main trend a second ago. we are seeing a little bit of selling taking place on equities. our main european equity markets indicating a similar story. all of these -- in fact, all of europe trading in negative territory at the moment. the asian markets overnight, we saw pressure continuing on the nebraska cay, off by 2.5% or so. seven-week lows on the close

with the yen rally ing. we had comments from the bank of japan governor. kuroda suggesting he's ready to expand monetary policy further. he stressed it wasn't a fix-all solution. so they're saying they're ready to expand monetary policy. at the same time, looking at what central bankers are saying elsewhere, the chicago fed president, charles evans, repeated his dovish call for u.s. rates to follow a very shallow path this year. he's calling for just two rate hikes in 2016. then moving from the u.s. to australia, the central bank there keeping rates on hold for the tenth consecutive meeting. the rba citing continued economic growth prospects despite the rise seen in the currency. and in india, the central bank there having cut rates by 25 basis points to 6.5%.

that's the lowest level since january of 2011. the rbi said monetary policy will remain, quote, accommodative, sending the rupee lower. so quite a bit of central bank activity. glancing at what the fx markets are doing at the moment, the euro-dollar sitting around 1.1360. a little bit of selling taking place in the euro. but let's not forget where it's come from. 1.05 and a bit from december. central bankers giving all kinds of commentary at the moment, starting with the u.s. and what's going on there. yellen seems to be speaking from a different hymn book than some of the other policy members. >> marginally. i think they're trying to manage. i think the underlying story at the fed is the economy is trunding along, job growth of 2% year over year.

enough to keep the economy growing at 2-point-something. enough to keep incomes rising faster than consumer prices but not accelerating anything. and the fed is watching the markets and the markets are watching the fed. i don't think they'll raise rates twice this year. i think they'll only get it done once. they're still incredibly timid. i think timid because of markets. >> so we've gone from 1.05-something in december to 1.13-something where we are now in the euro-dollar, mirroring what happened last year. we went from 1.06 in april to around 1.16 in august. we have seen kind of recovery phases in the euro against the dollar. my question, though, being why aren't we seeing more dollar strength in general given the fed's pretty hawkish stance compared to elsewhere? >> well, because we've got less priced in for the fed now than we had six months ago.

essentially, the big move down in euro-dollar, the move down to 1.05 last year was driven by the move to negative interest rates by the ecb more than anything else. that was compounded by us all -- i mean, we've been talking about the fed raising rates for so long, i can barely remember a time we weren't. but that story has gone on in the background. the ecb gave us a one-off fall for the euro. going further negative doesn't make anything much different. so we've bobbled around getting excited about whether we're going to get one, two, three rate rises here in the united states. to get euro-dollar significantly lower, back towards 1.05, the market needs to then say, all right, we'll get one or two this year, but we'll get three or four next year or whatever the number is. to do that, you need to get a change in tone.

perhaps right now you need equity markets, the u.s. equity markets to move higher to unlock that. >> we also have the bank of japan governor as saying that they're ready to expand monetary policy further if need be. yes, we have seen the yen a little stronger in 2016, but by and large, it's been very weak despite the fact all of this stimulus has been happening. >> well, the yen's been weak over the course of the last five years, but what we're doing is slowly unwinding some of the weakness that was engineered in the early days of abenomics program. that must alarm the japanese authorities. this is an economy that's in danger of sliding back into serious disinflationary situation. they're losing control over monetary policy, whether they do more now or not is almost a moot point. goodness knows what the impact of another consumption tax increase will be. i don't really understand why

the yen's as strong as it is this morning. it's following -- the yen's following the equity market, where i thought the equity market was supposed to follow the kurcurrency. it's all back to front, but i think it's a problem for the authorities. >> those of you have been watching the show for quite a while, i'm a big fan of 13d research. they're arguing that the traditional mechanisms of we hike rates, the dollar goes up, that it doesn't exist any longer and you're seeing big unwinding trends, especially with regards to holding u.s. dollars. >> yes. i mean, interest rate relationships with currencies have come and gone all of my life. there have been lots of periods. when the fed raised rates in 1994, dollar-yen went straight down to 95 and beyond. >> '94 was a little before my time. >> you don't want me to talk

about ages. >> i'm happy to listen and learn as always. >> that's not in itself new. the challenge to get a weaker yen, here's a country with a huge net stock of savings and foreign assets. to get the yen to weaken, you have to persuade japanese investors to buy even more foreign assets. at the beginning of this year, when you were offered minuscule yields on european bonds, not much on treasuries, and you had falling asset valuations around the emerging markets, japanese investors were staying at home and cutting interest rates. today, again, what'll make the yen weaken will be calmer markets. then they'll start seeing money flow back out. i think that'll be a story. >> okay. >> but yeah, interest rate differentials on their own don't do it. >> okay. you're staying with us, kit, for the time being. get your e-mails through. get involved in the discussion here in the studio.

we are on good old-fashioned e-mail still luckily. streetsignseurope@cnbc.com. you can also find us directly on twitter. follow the show @streetsignscnbc or you can tweet me directly @louisa bojesen. coming up here on "street signs," could a fin tech tie-up be in the pipeline between mastercard? we'll also be talking about more about how to position yourselves in terms of strategy in the markets. and we'll get the latest on the u.s. elections as well. you're watching "street signs" this morning. you can't predict... the market. but at t. rowe price, we can help guide your investments through good times and bad. for over 75 years, our clients have relied on us to bring our best thinking to their investments so in a variety of market conditions... you can feel confident...

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hi, everybody. welcome back. you're still watching "street

signs." i'm louisa bojesen. getting up to speed with corporate stories this morning. shares in peugeot unveiled their midterm plan. they're targeting 10% revenue growth by 2018 and a further 15% by 2021. the french carmaker has pledged to introduce a new vehicle every year for each of its brands. credit suisse is facing pressure from analysts and investors who are asking questions about the bank's $1 billion worth of write downs. according to reuters, the ceo contacted the bank's traders after fourth quarter earnings to inquire about the weak performance. separately, credit suisse said it's aiming to focus on china having been underweight the world's second largest economy. the bank plans to grow the wealth management business there despite slowdown concerns.

accorhotels has agreed to buy one fine stay for 148 million euros. one fine stay is aiming to extend its reach from 4 to 14 cities over the course of the next five years. siemens is reported to be eyeing a $4 billion acquisition of equipment maker emerson electric networks power business. that's according to reuters sources that are familiar with this matter. and let's talk sugar. tate and lyle revised down its forecast for the fourth quarter and earnings in february. that's thanks to weakening currencies in brazil and mexico. off by around 2%.

and a u.s. judge has approved bp's settlement over the 2010 gulf of mexico oil spill. the british oil giant will be paying $18.7 billion in penalties to five states and the u.s. government in a deal that was agreed originally back in july of 2015. the u.s. attorney general loretta lynch said that today's action holds bp accountable with the largest environmental penalty of all time. jason is with us from jeffries. is this the end, then, of this oil spill, of this environmental disaster for bp? >> it's primarily the end, yes. the settlement with the government was by far the biggest component that was still remaining. there is still lingering claims of business interruption from private individuals that will keep coming through, but it's very small relative to the $20 billion settlement that's finalized today. >> bp initially said they were

setting aside around $54 billion to deal with penalties and the cleanup in general. should we be looking at this and thinking that it's a good thing in terms of the amount that bp has ended up having to settle with? >> i think that getting certainly around the government set almost is a good thing. it's obviously a large amount of money. it doesn't benefit the shareholder, but it does bring certainty. recall the clean water act fine that came through in the settlement is less than $5 billion. that had the potential to be $17 billion. so there is some positives within that amount. >> how do you view bp now as a company, especially after over the last couple years? there's been a lot of speculation as to whether or not it could be a takeover target and whether there would be more value to be found if assets were broken off or even if it was broken up completely. >> well, bp is still a very big company. despite the $55 billion in settlement, it still is one of the five largest oil companies publicly traded in the world. i think it's too big to actually

be a legitimate takeover candidate. i'd also say that the company has divested a lot of assets to be able to deal with the settlements that have been made. so they've already done a lot of the portfolio cleanup activities that i think you were referring to when you talk about spinning out assets. i think bp is about right sized rights now. the company can't get too much smaller and accomplish what it wants to strategically, especially when it comes to dealing with very large national oil companies. >> the price of oil, we've gone from around $60 a year ago to $30 per barrel now on both contracts. do you think we're going to see a turnaround at any point in the near term? are we heading higher once again? >> well, the market is currently oversupplied. i think it will remain oversupplied until late in the third quarter.

i think that's when you set the stage for a fundamental price recovery. i do expect that to happen. we could see further tests to the downside in the near term because of the oversupply situation. but i think we've seen the lows in terms of oil price for this cycle. >> what do you make of oil and commodity currencies as well? i'm thinking in particular of the ruble, the canadian dollar seeing weakness on the back of the price of oil. >> you know, i think the question for the foreign exchange market more than the oil price itself is how far forward do we want to look? unlike other commodities, demand for oil has been steadily rising. it's just still below supply. so the oil analyst is looking at that saying, you know, i think we'll get a recovery in prices when demand is above supply, when we stop having an excess. when i look at currency markets, i was brought up to say we look forward. so if the ruble is very cheap and if we take out the other

things affecting russia, i'd be really bullish some months in advance. i'd like to be more optimistic. it's a big contrast to the other commodities. steel, clearly we're not taking excess capacity out of the steel market. indeed, in this country, we don't particularly want to right now. we want to find a way of protecting it. but there's excess supply coming in here because the biggest demand went away. so i'm more optimistic on the petro currencies at this point in time, but i scratch my head every day trying to figure out when we get a bit of decoupling. >> you and a lot of other people as well. jason, should we be scratching our heads more heading into the meeting on the 17th of april snl do we think there's going to be a wider agreement on a potential production freeze? >> well, certainly the comments

from the saudi prince have led to further doubt. this is quite a bit of political maneuvering going on right now. russia has been fairly accommodative. iran said it's just getting back into the world export markets, it's not going to do anything. what it boils down to is which direction the saudis want to take. i think the mere fact these parties are all talking right now is a positive, but it really doesn't have much affect on the physical market. it's purely a psychological element that has downside on the 17th. >> jason, thank you very much. kit, thank you to you as well. the fallout from the panama papers continues. in iceland, protesters gathered outside parliament to call on the prime minister to resign in the wake of the leak. the demonstrators echoed a call

from iceland's opposition, which filed a motion of no confidence over the revelation that the prime minister's wife owned the tax-haven based company with large claims on the country's collapsed banks. now, on top of that, two key wealth managers deny allegations a day after the panama papers leak that they used offshore arrangements to help clients pay less tax. in a statement, the ceo said, we as a company and as a bank only encourage the use of structures when there's a legitimate economic purpose. meanwhile, a spokesman in hong kong said the allegations are historical, in some cases dating back 20 years, predating our significant well-publicized reforms implemented over the last few years. the family of the football champion lionel messi has denied

media reports that he was involved in the tax scandal leaked by newspapers. he was accused of creating a company designed to evade tax. by all means, get in touch on this. i find it interesting. also, the legalities of whether or not it's legal to pub lliciz and name people in allegations at this stage as well. also, is it illegal to find loopholes? there's a difference between acting in an illegal manner versus acting in maybe an unethical manner. let us know what you think. find us on e-mail, streetsignseurope@cnbc.com. or on twitter. all the addresses will be floated on screen for you. more to come here after the break on "street signs." we'll be getting some u.s. election updates and strategy tips as well. because, healthier doesn't happen all by itself. it needs to be earned every day. using wellness to keep away illness.

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hi. welcome back. you're still watching "street signs." i'm louisa bojesen. your headlines this morning. a bleak message from christine lagarde, the imf chief calling for stronger action from policymakers to turn around fortunes. >> the not-so-good news is that recovery is too weak, too fragile, and its durability is at risk. the dax leading european stocks lower after german factory orders fall unexpectedly in february. the nikkei hitting a seven-week low in their session. and shares in peugeot shift into reverse after the company reveals its strategic plan. analysts at ubs calling the margins conservative.

welcome back. glad you're with us here on "street signs" this morning. our european equity markets seeing a little bit of selling here this morning. relatively stable session in yesterday's trade, but today all of our european ek i canquity m are trading in negative territory. the xetra dax just accelerating, selling over the last half an hour or so, to lead the pack. when looking at our asian markets and what took place overnight, notably the nikkei off by some 2.5%, closing at seven-week lows as the yen rallied. you had the bank of japan governor kuroda talking about how they're ready to expand monetary policy further if need be. he also said market factors would be among the key factors when looking at when to expand. the australian market lower by 1.5%. shanghai just bucking the trend a bit.

u.s. futures, yesterday we were setting ourselves up for a slightly positive start at this point. today, not so. we're looking at markets being called in negative territory. the implied open there on the right-hand side of your screen, with the dow being called off some 113 points right now. now, christine lagarde has been painting a pessimistic picture on the outlook for global growth, speaking at a lecture in frankfurt. the imf chief seemed disappointed with the economic recovery. >> we are not in the middle of the an acute crisis. we are actually growing, and that is good news indeed. the not-so-good news is that recovery is too weak, too fragile, and its durability is at risk. now, of course we have made progress since the great financial crisis. but because that grow has been

too slow, too fragile, a lot of people are just not feeling it. and this persistent low growth can be self-reinforcing through negative impact on potential output. that can be actually hard to reverse. the risk of becoming trapped in what i have called now a year ago this new mediocre has increased. >> now, speaking ahead of christine lagarde, the ecb governing councilmember highlighted the importance of the imf. he described the fund as a, quote, indispensable part of bailout programs for indebted eurozone nations. now, we've been looking at our data hitting the wires this morning. a lot of it pretty weak. we're just waiting for the march services pmi data to hit. you're looking at sterling being sold back a little bit, on the back of -- well, among other

things, continued worries about whether or not we're going to be looking at a potential brexit. you had the french business activities stagnating in march. services weakening there. the german private sector growth hitting an eight-month low in march as well. the pmi data weaker in germany too. the eurozone business growth barely accelerating in march, and indeed the u.k. just hitting the wires right now. services pmi edging up in the u.k. first quarter gdp growth likely to slow, according to mark. they're estimating u.k. first quarter gdp up by 0.4% quarter on quarter versus a fourth quarter rise of 0.6%. they're saying march, all sector pmi rising to 53.7. that's also higher than what was seen in february, 52.9. services pmi new business component, 52.9. that's opposed to 54.1 in

february, so the lowest level seen there since january of 2013. march services pmi, 53.7 versus february, 52.7. it's right in line with the reuters poll. let's talk to chris williamson. so u.k. services pmi data edging up a little bit. first quarter gdp growth likely to slow is what they're saying, chris. >> yeah, so first glance, this is good news. the number has risen, but we have to bear in mind in february it had fallen sharply. so what we're seeing is their sort of correction in the rate of which the u.k. economy is decelerating. it looks like we're now on course to 0.4. so we're coming down. some people might say the headline index has risen.

that's good news, surely. when you dig down into the other indices, you see, for example, inflows of new business. when you amass all the three surveys together, covering construction and manufacturing as well, weakest for three years. so it does look like companies are bracing themselves. >> weaker than what we're seeing so far? the current conditions? >> weaker than the 0.4 we're pencilling in for q-1. >> how does the u.k. stack up to its neighbors? just mentioning the german growth slowing, you're looking at french business activities stagnating for march as well. how much better or worse are we faring? >> this is by no means a disaster. there's no recession being signaled whatsoever here.

it's just disappointing growth, a bit like the imf is saying at the moment. there's nothing really outrageously disastrous here, just disappointing. so germany, the u.k. is in line with germany. sign signal 0.4% growth. france is the disappointment, stagnating. you have some real pockets of growth as we've seen in the data this morning. spain, 0.6% q-1 growth maybe. really, pockets of growth. the big disappointment in the world in the recent months has been the u.s. we've got the good nonfarm payroll numbers, but certainly the pmi surveys, the flash numbers we published last week, they've come down sharply in february and march, suggesting a cooling in u.s. growth. it's coming down more in line with what we're seeing in the

emerging markets. >> how much of this in the u.k. has to do with this referendum on the policy coming up? if i'm a u.k. business right now and i'm asked, what do you think about the future, i might be a little more cautious at the moment and wait and see what happens with this vote. >> absolutely. if you're thinking about expansion plans or investment, let's just hold on. it's only another couple months. let's just defer things until the picture is a little brighter and let's see where the dust settles. this is typically what you see with things like general elections as well. there's a brief lull sometimes in decision making. that's exactly what we've got at the moment. you saw it a little bit in construction data that came out yesterday. here as well. the big downturn in the services economy is in financial services. looks like that may be being impacted more than anywhere else. >> is there a sector that's

somewhat left out of the uncertainty or better cushioned? >> the more resilient sectors are the consumer oriented ones. they're still doing well. you've still got low inflation, some decent real wage growth, very low mortgage repayments at the moment. so consumers are still doing very well. that's where the real impetus is at the moment. >> excellent. chris, thank you very much. chris williamson, chief economist at market. now, a potential collaboration could be in the works between mastercard and social media heavy weights facebook and twitter. speaking to cnbc earlier this week, a top mastercard executive said the company informs continuous talks with the silicon valley giants. nancy is in copenhagen, my stomping grounds. i'm expecting you're coming back fluent in danish, by the way. >> reporter: well, i can't

promise that, but it's sad you're not here with me. next year we'll have to do a "street signs" on the road. i have been reviewing all your tips. we'll be hitting the city in a little while. here in the exhibit hall, the focus is really on fintech. as you just pointed out there, it's not just how the financial firms are being disrupted by the smaller innovators, there's also a big focus on the big tech names that are here. we've been talking to amazon, to samsung, paypal later. i think it was you that famously coined the phrase techfin. we often talk about the financial firms taking a lead in tech, but some are tech firms that are trying to appeal to banks as a customer. that's a similar story to my next guest. thank you so much for joining us. it's a real pleasure to hear more about your company. i want to get a view on the strategy, the growth going forward. walk us through exactly who your clients are and how you service

them with your technology for security purposes. >> well, thank you for having me here. mainly what we're seeing here in scandinavia, because this is our home market, we are a swedish company, and we've been very successful in the nordic region. obviously we're seeing a lot of growth in europe, western europe mainly with banks adopting our technology to protect against fraud and to make sure that money is safe by adding behavioral biometrics on top of existing security to protect accounts. of course, the big next thing is to go to the u.s. and conquer that as well. >> reporter: conquer vegas so you really catch the attention of the u.s. customers as well. getting back to your actual technology. biometrics, a hot area the a the moment. it takes a lot of investment as you try to stay on the leading edge of that technology. what are you doing in terms of fundraising? is this an ongoing project? >> so think in general. we've been a start-up since

2008. you always have to be fundraising to be on top of things. that's number one. i'm not going to hide that from you. i think in general what we're seeing, our type of biometric is a software biometrics. >> so what is the value proposition for the banks? for instance, why do they come to you rather than develop on their own? >> what we're seeing that's really been top of mind recently that really spurred the growth is user experience. if you look at security technology from five years ago, it wasn't the same as it is today. today you want to have a very streamlined log-in and transactional experience. that's why our technology is totally transparent. it just sits in the background

making sure no fraudster can get in there. that's why we're doing very successful and having huge growth. >> that of course requires you to presumably change the technology quite frequently because the fraudsters, as you call them r also changing their methods. what is the next big thing? >> what we're doing is a little bit different. we're really trying to identify the end user. that means we're tying the digital fingerprints based on the way they're typing, their user name, their password. so even if they can get their hands on those credentials, they still can't mimic that behavior. basically tying it directly to you as an end user. >> and here at money 2020, the first year it's been in europe, still debate over whether or not

these companies such as yours have the potential to scale. do you feel you need more partnerships with other companies, especially when it comes to moving beyond borders and into the united states? >> definitely. we are a small swedish start-up trying to conquer the financial services market. we're trying to sell security, which is a really hard thing to do. so we're partnering with all the top-tier authentication providers and access management companies. so you can find we're part of a lot of technologies out there already today. in the coming few month, you're going to see many more. we probably partner with most of the top-tier authentication providers in the city. >> you mentioned selling security is a hard thing to do. is that because banks are still trying to assess what is the winning strategy when it comes to security? >> i think it's mainly inertia. they're still trying to figure out what is the next big thing.

a lot of them are now coming to us to see that kind of revamp. like, okay, maybe we didn't buy the wrong stuff before, but we want to add this to make it even easier. >> okay. well, thank you very much. there you have it, louisa. security, biometrics. just one of the thing themes on display here in copenhagen. coming up, we'll be talking to the ceo of overstock retailers to look at ways in which they can improve customer service. overstock also looking to get into the block chain game. we'll tell you more about that to rm. >> nancy, great stuff. we misyou here in the studio. a little tip as well. to speak danish, pretend like you have a really hot potato in your mouth. >> reporter: that's a good one. see if i can find any potatoes

around here. >> nancy, thank you very much. have fun in copenhagen. we'll see you soon again. now f the polls are right stateside, donald trump is on course to lose the wisconsin primary to ted cruz, making it harder to win enough delegates to secure the no, ma'mination outright. here's trump complaining about the system. >> i want to be treated fairly. in louisiana, i win the state, and i find out i have less delegates than a guy i beat quite easily. what's going on? now, in all fairness, we're way ahead in delegates, but why would somebody that loses have more delegates? they'd say, well, it's this way and -- wait a minute, i don't care about ways. i won the state. i'm not supposed to have less delegates than a guy i beat. it doesn't work that way. >> well, nbc's ed lawrence is in washington, d.c. the wisconsin primary showing pressure on mr. trump, ed. >> reporter: a lot of pressure,

louisa. this is not make or break for the republican or democratic front runners, but wisconsin could turn the tide of momentum. both donald trump and hillary clinton on the democratic side are playing defense today at events. donald trump is very upset, lashing out at governor john kasich for staying in the race. john kasich not having a clear way to win the nomination at this point. senator ted cruz is also angry with the governor of ohio for staying in the race, taking valuable delegates and valuable votes away from him. governor kasich says that he's glad he's got the other two competitors upset. now, kasich has moved on to new york. he's not campaigning in wisconsin. both cruz and trump are campaigning in wisconsin today. they're going to the democratic side. a loss for hillary clinton in wisconsin could give bernie sanders the boost that he needs. hillary clinton is not campaigning in wisconsin today.

she has moved on to new york also and attacking republicans now at her events in new york. still, sanders is saying in wisconsin, campaigning there very hard. the latest polls show that sanders actually has an eight-point lead now in wisconsin. he will have won, or has won already, six of the last seven caucuses or primaries. he's really gaining in momentum, not allowing hillary clinton to turn and focus on the republicans. loui louisa? >> but we're correct in thinking that wisconsin could be the determining factor on whether or not trump is pushed to a contested convention, is that correct? >> reporter: it is one step of a contested. there is only 42 delegates on the republican side at this point. if trump does fairly well, as the polls are showing him about five points behind senator ted cruz, trump will get some delegates. so this is not make or break for him. but the momentum is there. we're talking about a shift in momentum. everything has been going trump's way up to now.

wisconsining tu incould turn th and make it a contested convention. trump only needs 500 more, and there's plenty of states left to do that. new york is another big one coming up in two weeks. >> ed, thank you very much for being with us. ed lawrence from nbc news. now p something else gripping washington, tax inversion deals. we'll be explaining the impact on allergen and pfizer. also, more thoughts on how you should be positioning yourselves in the market. thanks for all your questions and comments. keep them coming through.

hi, everybody. welcome back. you're still watching "street signs." i'm louisa bojesen. shares in allergen dropping

after trade and the u.s. secretary treasury announced new measures aimed at curbing tax inversions. t the changes have thrown the merger with pfizer into doubt. the groups released a joint statement saying they would not comment before completing a review of the actions. walt disney's chief operating officer will be stepping down on may 6th. he was widely expected to be the company's next ceo following bob iger's retirement. he'll remain a special adviser through disney's fiscal year. he's reportedly leaving the company, as he didn't receive board assurance that he would be succeeding the current ceo. tesla has reported lower than expected first quarter sales, citing shortages from its suppliers. the electric automaker delivered close to 15,000 cars, falling short of expectations for 16,000

vehicles. tesla blamed manufacturing troubles on hubris over the model x. however, the company reaffirmed its full-year delivery guidance of up to 90,000 cars. looking at the u.s. futures and how we're setting ourselves up for trade, we are 4 1/2 hours away from the u.s. market open, and we're being called quite a bit lower. the implied open on the right-hand side of your screen turning a bit more negative within the laths half hour or so. dow jones now off 124 points as opposed to the positive start we saw yesterday. and the best strategy in the stock market this year has been to act like a cockroach. this is the unusual note that was sent out to clients from morgan stanley's chief u.s. equity strategist. adam parker admits he hasn't been acting enough like the insect. he's calling for further downside despite recent gains on wall street, where cockroaches,

they travel in the wind's direction. they can survive with their heads chopped off. some female cockroaches only mate once, stay pregnant for life as well. imagine that, for those of you who have been pregnant. a cockroach can live about two weeks without water, for almost a month without food. they can hold their breath for us to 40 minutes. guess how fast they can run. have you ever tried to catch a cockroach, or tried to run away from one? my director says no. they can run up to three miles an hour. get your skates on. christopher mann, markets like a cockroach? >> i don't know about that. that's quite an analogy. clearly, markets are very fragile right now. you saw in september last year, big falls in the markets. people are still quite worried. my view is actually what you've seen in positioning is most people have already changed their portfolios, already gone to cash, already cut their

equity exposures. >> why do you think we're fragile? with all this money and help, stimulus thrown at us, shouldn't we still be riding on a real recovery or at least a fake real recovery? >> i think you actually are going to see an upside surprise in the data. it's already started to come through in the united states. also in china, which people were so worried about last year. this time around, things like the pmi, the ism, the payrolls are showing actually the world isn't too bad. despite everyone being quite nervous right now, despite the markets testing everyone's nerves, actually i think we've probably seen the worst. >> because we just had an economist on who was arguing kind of the opposite, saying that the u.s. has been the one that's been surprising to the downside. yes, the payrolls have been

stronger, but a lot of the figures have been weaker than anticipated. when you look at europe this morning, weakness across the board for the month of march when looking at the pmis. >> sure, one month is always -- you can always choose bits and bobs within there to make your case. when you look at the broad sweep of the data, when you look at how resilient jobs have been, how things like orders are not falling off anymore, the drag from oil has passed. actually, things are looking not too bad. remember, you've got to get things to keep getting worse to make sure that the markets continue to fall. part of the reason for that is positioning is already quite negative. positioning is already a lot less bullish than it was this time last year. many people have already built up cash reserves, et cetera. >> so as director of asset allocation, what should i be

allocating at the moment? >> well, there's a whole range of assets out there. number one, one of our preferred assets is actually property. we think property is one of the best areas to invest in. i think with rates being low, europe and the u.k. primarily for us. if you look at some of the u.k. markets, you're still getting 5% inflation yield. in europe as well. some of the rates in europe look quite attractive. those sort of areas we think can do pretty well, especially if you think that the ecb is not going to hike rates any time soon. >> but it's become a lot harder to buy property in the u.k. the extra stamp duty just slapped on recently for people who own second homes, it's become more difficult to get a

mortgage as well. they're testing you for 5% more. >> my comments are more related to the commercial property side, where unfortunately it's a bit more tricky for individuals to buy. >> so apart from property, what else should i be looking at? >> i also think that things like high yield are actually quite attractive. again, it's the valuation argument. it's the fact that market has fallen so fast for the last 18 months. actually, right now it's looking pretty reasonable, has about an 8% yield on it in the u.s. that's actually pretty good when you consider that the federal reserve is not going to hike rates that fast for the next year or so. so if you believe that the data is okay like i do, areas like that are going to be quite attractive. >> joe complains that we're not talking enough about oil and gold. watch your language, by the way, joe. i won't have bad language on this show. gold having rallied, what, 16% or something over the course of the first quarter. do we think there's going to be

further wild cards lined up throughout the year? >> i speak as a supporter of gold. what i think you've seen for this year is probably most of the gains. that's because i think we're heading back into textbook economics in the united states. in other words, we're not in the extreme disinflation or the extreme inflation scenario. when you're in that middle range, the textbook range, gold tends to perform not too well. clearly, in periods like we had in january where the credibility of central banks was being openly challenged, you know, that is a great environment for gold. >> do you think that we're going to be led by each other still in terms of -- back a couple years, china was leading with the rest of the markets. then it switched to the u.s. leading us. then we had europe leading us and potentially leading us downhill with the potential exit of greece, which might or might

not happen. are we still geared towards these relationships, or are we looking at other relationships at the moment? >> i think it's very unlikely to get all parts of the world firing on all cylinders. that was the case back in 2005, '06, and '07. it's very difficult to engineer this time around because we have so much excess of capacity. nevertheless, i think you're going to get enough growth coming out of both the u.s., europe, and for the next little while out of china. china is the one difficult to predict. right now they're doing a huge amount of stimulus. it's incredible the amount of stimulus, the amount of money printing they're carrying out. the question is going to be in, say, six or nine months' time, when you look at how much they've printed and how little the economy will have grown, then some people will start saying, is that enough? at that point, we'll have a few more upsets for the markets ahead of us. >> but you'd still be a buyer of

equities? >> right now, yes. >> okay, good. chris, thank you very much for being with us. still looking a the some of these cockroach facts. have you ever held a cockroach? >> ever held one? >> yeah. >> maybe with a tissue as i squeezed it. >> you wouldn't dare take one up with your bare hands? >> not something i particularly want to do. >> if you see a little spider and want to put it out, it's fine to take it in your hands. >> not a cockroach. >> i think many would agree. chris, thank you very much. that is it for today's show. cockroaches and all. i'm louisa bojesen. up next is "worldwide exchange." we'll be back tomorrow, same time.

(music plays from one way or another )♪♪ ♪ i'm gonna find y♪ i'm gonna getcha ♪ ♪ getcha getcha getcha ♪ one way or another ♪ ♪ i'm gonna win ya ♪ i'm gonna getcha ♪ ♪ getcha getcha getcha ♪ one way or another ♪ ♪ i'm gonna see ya ♪ (inhales cigarette)

good morning and hold on to your hats. global markets selling off. the nikkei drops to a seven-week low overnight. oil extends its losses. u.s. futures pointing to a triple-digit downside open. a new rule from the treasury department calls into question the drug maker's mega deal with pfizer. and the once heir apparent to ceo bob iger is leaving the company. it's tuesday, april 5th, 2016, and this is "worldwide exchange".