let's get back to deutsche bank as she said. banks credit rating has been from --just slashed slashed from a minus to chip will be plus. phil to record lows after u.s. regulators added it to a group of troubled lenders that they monitor. for more, we're joined by jeffrey smith. walk us through what is going on with this bank. there has been trouble for so long but now the shares are coming down to a level that we haven't seen since we first started keeping track in 1992. alone,he last 24 hours there's been a quite vicious trigger in the selloff. all this news about the fed putting it on its troubled list. really sort of expected, the downgrade from standard & poor's which is the last a great rating that it had. it could have the effect of locking in higher funding costs and costing a lot of clients. it is already shrinking itself, retreating out of this is this continually cutting headcount and is not to believe there is a brain drain going on here. does the deutsche bank of the future look like. what is this global bond trading

francine: deutsche bank downgraded. the new chief executive tells staff there are no reasons to be discouraged. governments come together as spain is set to fall apart. and brussels bites back. as trump metal tariffs come into force. ♪ welcome to bloomberg surveillance. markets, relative calm compared to what we saw in asia overnight. i would suggest there are four may stories you need to be watching out for. first of all, the u.s. job reports a little later on, so watch out for that u.s. 10 year yield. and euro-dollar stabilizing on the back of it. 1.16 will be moving on the back of trade tensions, whether those escalate or is there more retaliation. they will also move on the back of the u.s. job numbers. the stoxx 600 will move on the back of what happens in italy. on the corporate story, it's all about deutsche bank, and the stock was at its lowest yesterday. today it also got downgraded by s&p. the chief executive, first of all, saying there is no worry about the underlying fundamentals for the bank. will be freake

it looks like we could have a positive open even for shares of deutsche bank. gate has indicated that that bank will rise after falling to an all-time low in yesterday's trade. just as the market opens up, let us look at some of the indexes out of the gauge. we are looking at the ftse. climb thisch it morning. the ftse is always the first out of the gate. take a and the dax little longer to open up. especially on a volatile morning. in ibex is up almost 1% spain. about to getjoy is voted out of office and the socialist are about to take over with what one guest called a frankenstein coalition in madrid. the cac having a strong open as well. it will be interesting to see the ftse may have opened in rome here at the bottom. we expect a positive opening for the ftse as well. even though the investors may be the ftse- even though -- investors purchasing not only bonds but also the stocks as well in italy. positive moves across the board. we will wait for the germanic indexes to open the way expect though we expect them to be positive as well. losers with the excepti

let's talk about deutsche bank the u.s. arm has failed part two of the fed stress test this after the central bank noted widespread andciencies in capital spending controls. in a statement deutsche bank said it is engaged with regulators and it working to improve that part of the business the bank passed the first hurdle which tests capital levels during a severe recession. shares in deutsche bank fell to a record low earlier this week cnbc speaks exclusively to deutsche bank's new ceo, christian sewing later today. >>> european leaders in brussels brokered an agreement on the migration crisis after nine hours of talks despite initial reservations from italy. speaking after the marathon talks, the italian prime minister said that from today italy is no longer alone the text of the european coun l counsel's conclusions urged to prevent uncontrolled migrant flows. they are looking for third party migrant centers outside the eu and countries will also share responsibility for migrants rescued at sea while clamping down on smugg

fantastic erroring generated on the deutsche bank and commerce bank story.tephen joining us out of frankfurt. a bit of pressure going through on the south african rand. we have had a series of emerging market central banks coming through and raising rates. doesn't look like they will deliver a similar story. the team has gone through that. we have trading against the u.s. dollar against the rand at 13.1423 right now. we did see some very weak g.d.p. data over the last few sessions. that is a story we are watching carefully. we are minutes away from the start of the market open. 11 minutes away. up next we are going to take a look at stocks to watch. bp looks like it is on move. gary panera looks like he is departing. the recent strategy reset hasn't gone that well with investors, and he has decided to go. the stock has gone anywhere from 1% to 5%. market open is 11 minutes away. stocks to watch next. this is bloomberg. >> eight minutes from the start of european cash trading this morning. european futures pointing negative. which stocks are going to be watch

business as troubled that's now led the united states deposit insurer f.d.i.c to add deutsche bank to its list of problem banks the list specifies those institutions with weaknesses that endangered their financial viability. the new bloke comes in the middle of restructuring efforts deutsche bank's new c.e.o. christiane's evening wants to bring it safely back into the black again after three consecutive years with losses and that's no small undertaking deutsche bank shares have tumbled by more than forty percent since the start of this year. and that brings you up to date on all the latest business here on d w you can always find out more if you follow us on twitter or check out our website i see you soon. we were out all fired. take football personally. or you know whether. i'm not the addition of all you smoke our preview this week a group. will jimmy have reason and the way to get a. new team is eager to win the title for germany once again but first they have to get past these guys. more intriguing. the international talk show for journalists to discuss the topic of the week twent

leitner became president of deutsche bank he's been through four c.e.o.'s and now he's looking at a different solution to the bank problems and why he talked to deutsche bank share shoulders with a rival commerzbank. there's currently no talks going on. news 24 hours a day powered by more than 2,700 journalists and analysts in more than 120 countries. i'm taylor rigs. this is bloomberg. francine and tom? tom: thank so you much. equities, bonds, currencies, commodities, a little negative. s&p negative and dow futures negative 167 and euro 118 comes back to 116. if you would, two more cups of coffee than president will have in quebec. dollar canada with weakness there as well. we're watching brazil and south africa as well. francine? francine: i need a cup of coffee, the end of the week is more difficult than the beginning. european stocks falling. we did have disappointing data out of germany that added a little bit of a risk. let's get the board up for you so i can talk you through it. look at emerging markets, we saw a rise in south africa's and which rem

there is another giant deutsche bank tower right down the street to my right. ey are just packed in this small country, with these two big banks now. nejra: good morning to you matt. the biggest price obstacle here? matt: that is one of the biggest obstacles, certainly. i would not say it is the biggest one, because the one thing that the german government doesn't really like to do, and the german people are opposed to, is to set the company up for massive layoffs. if you put these two banks together come with a synergies would be fantastic for investors. but they would need to fire far more people than they are willing to now. one of the reasons deutsche bank has the problems it has now, is because they haven't fired people fast enough already. there are just too many bankers. if you was the together, it would be a situation where this country will not add banking jobs for years to come. that is probably one of the biggest obstacles. going into it with a share price at an all-time low is also not attractive to any potential partners in a merger. nejra: what hav

. >>> and deutsche bank says the bank's financial strength is beyond a doubt after the s&p cut its rating for deutsche's stock. if you look at our share price yesterday we are vulnerable for speculation. this is tough. sometimes this gets bumpy. by we have already quite a lot behind us, we know what we have in front of us we have a plan >>> some numbers out of italy. final gdp figures for the first quarter, it is as expected, 0.3. italy expecting a gdp of 1.4 for the year those new final q1 numbers at 0.3% this morning. also going to bring you more data on the eurozone manufacturing pmi data coming out at some point in the next few moments. eurozone final manufacturing data for may output is 54.8, that is against preliminary number of 55.5, that's down from 56.2 from april. in italy the five star movement and lega party agreed on a new cabinet lineup president mattarella a retarelld the new list the break through came after both parties agreed to reject savona as finance minister, he has been replaced. as woe look at some of the reaction to this, another example of them clawing back the f

first step, a deutsche bank solution? they should --ge with commerce see bank commerzbank. in iphone component orders. and the guide to philanthropy. we hear from the ceo with his way of giving back. joining us now is jason kelly. michael.o his first wall street beat. this will be crazy. [laughter] jason: it will be crazy. thisis amazing to watch saga play out. almost every day there is some deutsche bank think that we are talking about in this segment. and what is interesting about thisew speculation is that started a number of months ago -- bought substantial stakes in both. that kicked off speculation initially. by most accounts, it just probably makes sense. at least to some people. we will see. both of these things are clearly in some level of trouble. they are very important and you probably have insight to the german economy. michael: deutsche bank has been . german champion is it raising value for shareholders or the german economy? jason: that is the key point. theeels like a case where government will have a lot

thank you very much for joining us, john augustine and sandy villary. >>> what the president of deutsche bank and whether the bank is eyeing a potential acquisition. >>> as we mentioned, stocks closing higher today, but data shows us the second largest ever weekly outflow from equity funds. coming up, "fast money" says whether it's a bearish sign for investors. >>> we want to hear from you, itr,acoo oto the show on itr,acoo oto the show on twte febk,r e-mail hawaii is the first state in the u.s. to have 100% renewable energy goal. we're a very small electric utility. but, if we don't make this move we're going to have changes in our environment, and have a negative impact to hawaii's economy. ♪ we're back after the short break. using smart sensors on their network that lets us collect near real time data on our power grid. (colton) this technology is helping us integrate rooftop solar, which is a very important element of getting us to our renewable energy goals. ♪ (shelee) if we can create our own energy, we can take care of this beautiful place that i grew up in. ♪ we're experts in connecti

business troubled the news had deutsche bank shares plummeting to on historic low on thursday with the wall street journal reporting that u.s. institutions had lost trust in the bank about a year ago the federal reserve labeled the bank's u.s. business as troubled that's now let the united states deposit insure a f.d.i.c to add deutsche bank to its list of problem banks the list specifies those institutions with weaknesses that endangered their financial viability. the new blow comes in the middle of restructuring efforts deutsche bank's new c.e.o. christiane's evening wants to bring it safely back into the black again after three consecutive years with losses and that's no small undertaking deutsche bank shares have tumbled by more than forty percent since the start of this year. and that's why we have business news here on the w i'll have an update for you in the next hour before you go here's a quick look awesome world markets by my. colleagues lawyer. culture. car hair. super mario. super food stylish style icon to lead a. lifestyle you're a. good. time for an upgrade. grows on buy

deutsche bank was the only foreign bank -- domestic or foreign bank to receive an objection.ts business made investments to improve planning capabilities as well as control and infrastructure. novartis is to spin off its eye care business alcon as the company's new chief executive refocuses on prescription pharmaceuticals. the drugmaker will buy back up to $5 billion of shares using proceeds from the sale of its stake in a joint venture with another company. the spinoff is subject to final approval by the board and shareholders at the 2019 annual meeting. australia has awarded a 26 billion u.s. dollar contract for nine anti-submarine rickets -- to the u.k.'s bae systems. bae shares climbed in london while those of the unsuccessful italian better slumped -- bidder slumped. matt: juliette saly in hong kong. she flies back and forth, the jet set life. let's talk about equities in that region. ending the week on a high, but the region's benchmark is heading for the worst first half since 2010. at head of equity investment stater partner joins me now. partner joins me now. the ove

kevin, welcome listen, we don't want to make too much of it however, if deutsche bank were a u.s.mean, if they were based here -- they obviously have a stock that is here -- and it was down 40%, it would be on the cover of every newspaper, not just business, every newspaper in the united states are we underplaying or overplaying the deutsche bank story? >> i think we're actually overplaying its demise and one of the reasons why is we can look back at 2016, where all we could hear in our own vernacular was the coco bonds, and we were really worried about the systemic risk of deutsche bank and the knock-on effects in continental europe with their banking partners now, we've come to a situation today where they've done over $9 billion of share sales, ramping up their coffers they've also divested r asset management business. the biggest issue that you're seeing right now is that their bonds got downgraded by s&p. and one of the reasons why was because of their restructuring efforts. it hasn't taken hold if we look at their q-1 earnings, trading revenues were down 9% while everyone el

business as troubled that's now let the united states deposit insurer f.d.i.c to add deutsche bank to its list of problem banks the list specifies those institutions with weaknesses that endangered their financial viability. the new blow comes in the middle of restructuring efforts deutsche bank's new c.e.o. christiane's evening wants to bring it safely back into the black again after three consecutive years with losses and that's no small undertaking deutsche bank shares have tumbled by more than forty percent since the start of this year. certainly also unnerving for everybody at the frankfurt stock exchange frankfurt of course the home of daughter bank and our correspondent is standing by for us there . at how how bad is it for deutsche now. it's really bad monica let me maybe first say that all this is a coming in an environment of very shaky markets trade policies have caused a lot of new uncertainty among investors so that now reaction to news like this from investors is even more of outspoken more crass than it used to be that might also explain why yesterday where the first ru

deutsche bank dilemma.t considers a merger with commerzbank, but is it enough to get the bank out of the doldrums? we will get insight from the head of financials are goldman sachs. 30 minutes into the trading day in the u.s. and we have abigail doolittle with what is moving today. overall not a big movement. abigail: not a big movement for the major averages. and onng just slightly the week, we have each of these major averages higher. the dow leading the way of more than 2% with s&p up 1%. the nasdaq yesterday haven't met pullback with a little bit of rotation out of technology. it gained the least on the week less than 1%. nonetheless a rally, but a small pause right now as we head into the g7 meeting. will the rotation out of technology, if you can call it, after one day continue? let's look at the chart that dan chargehowed us on smart this past wednesday, suggesting that the breakout in tech israel. this is a one-year chart of the s&p 500 information-technology sector. just recently hitting an all-tim

we are now hearing that the deutsche bank chair is set to talk to holders on the deal.e know the two german firms have discussed merger two years ago. that was aborted, but this could generate cost savings and produce a lender that poses less systemic risks to the financial system. we are getting news right now that the chairman of deutsche bank has floated the idea of a merger with commerzbank to the board. let us bring in bloomberg's stephen arons in frankfurt. we know that they had this conversation before. why do we think commerzbank would want to do this again? >> well, i think both banks know they need scale in the notoriously over-banked german market. a merger would benefit both. they are looking for a way to cut costs, so synergies would be a good way. it is also clear that both banks think they are not ready for any such merger just yet. they are both in turnaround plans. they will have to go through most of those before it becomes an option. this shows it is an idea on people's minds and that people like to talk about, so the thought is there. ♪ erik: welcome

one failure is deutsche bank. stock look at the performance you can see this is a bank that has been under failure or at least under pressure. what we have here is yet another blackeye for the bank. if they'll be part -- it failed. the federal reserve faulted his return oh -- this will be a stock to watch friday. let's go to the other after-hours activity. banks, most of them moving higher after results came out. this is even know these banks in goldmanar, jpmorgan, sachs and others had to scale back their proposals to dole out more cash. they got a green light. bank,an express come m&t they also had to temper their initial request. pretty much announced of those after-hours. found they still had enough capital. that is the issue do they have capital reserves. let's go into the bloomberg. a record defined 13 straight days in the banks. financial index for record-breaking streets for the banks. 13 days, we have never seen that before. up here in the regular session we did have banks higher. in those 13 days there ha

how should the market be focus on on deutsche bank? is it about counterparty risks?unterparty risk is taken away, that is the beginning of crises. >> i don't think there is any counterparty risk per se. i think it is difficult for me to make judgment about another bank at this stage, but i don't believe there is any counterparty risk in the system at this stage that is meaningful. erik: coming up right here on "bloomberg best," more of the compelling conversations from the bloomberg conference in new york. >> we have a lot of good data we are able to feed into a model where we think the world is going. for example, we have been able to back test that and test when we expect to have a recession in the united states. >> and that is? erik: this is bloomberg. ♪ erik: this is "bloomberg best." i am erik schatzker. key investors and asset management and corporate america in our new york headquarters at the bloomberg invest summit. blackstone'som head of global equity. >> how expensive is the world right now? >> it is historically expensive. we are subject to that. we have

business as troubled that's now let the united states deposit insurance f.d.i.c to add deutsche bank to its list of problem banks the list specifies those institutions with weaknesses that endangered their financial viability. the new blow comes in the middle of restructuring efforts deutsche bank's new c.e.o. christiane's evening wants to bring it safely back into the black again after three consecutive years with losses and that's no small undertaking deutsche bank shares have tumbled by more than forty percent since the start of this year. and that brings us right to our market correspondent who's not the front stock exchange how bad is it for doing. well first of all i think it's important to say that this is coming at a time of very shaky markets trump trade policies have caused a lot of new uncertainty among investors so that any news is likely to have a much more crass impact than usual and for deutsche bank of course this is coming at a very bad moment given that the bank is in this restructuring process especially in its investment banking divisions in the united states where

the ecb though is kind of happy with the progress that deutsche bank has made in correcting these problemsbut these negative headlines do whichn image of this bank is still nowhere near completing the overhaul and putting himself up for scratch. alix: if your share price is that low, you have to be a takeover target. are you hearing any rumbles on the street? and if not, why? nick: that is the big question. will it be taken over or merged? regulators care deeply about it being too big to fail. these innatekled problems before. now, in germany, the evergreen topic about will they or will they not merge with comber's bank here in germany. -- commerzbank here in germany. aat is more likely than takeover by another company but as a regulator, you really want to make sure that before anything like that happens, that the company is on a sounder footing. alix: nick comfort, thank you for joining us. new governments. how the political developments in spain and italy are impacting the markets or not. this is bloomberg. ♪ what's a gig of data? well, it's a whole day's worth of love songs. 300 minute

having deutsche bank operations in the country with a list of problem banks. shares have fallen by 40% this year, the worst year in a decade with the record intraday low on september 30 of 2016, 8.83. above that level as of now with deutsche bank's trouble worsening, investors rushing to catch as the stock split any record close on thursday, trading a bearish options on the german shares, highest level since 2008. the volume of puts 10 times greater than the 20 day average on thursday. versus bullish contracts climbing to the highest level since october of 2016. data out of the u.k. with manufacturing growth unexpectedly beginning in may. working through backlogs and building up inventories. a rebound masks areas of concern. 90 minutes into the session in the u.s. back ofhe rally on the the jobs report with the low unemployment rate of 3.8 are sent and better than estimate weight growth -- 3.8% and better than estimated wage growth. all three averages with good rallies. earlier in the week with the selloff, we thought we were dropping below the recent trading

deutsche bank projecting another quarter of falling revenue. n a transition period, scaling down american operations and cutting 7000 jobs. the bank's forecast is correct, this would be sixth consecutive quarter of revenue declines. we have a german banking reporter -- shares are rising. this isn't a big surprise, is it? >> no, people were expecting this. the bank has made it clear they are going through a difficult period now, they are cutting and they will lose revenue. it was expected. it isn't good, obviously. this is the sixth consecutive quarter of revenue decline. shares already at record lows. mark: the words that stood out from the cfo were vicious circle and virtuous circle. how does he move or how does deutsche bank move from the to the virtuous circle? >> that is the question everyone at deutsche bank is trying to answer. they were hoping for some kind of positive momentum to break out of the vicious cycle they see. each time they think they got a bit of tailwind, something bad happens like the s&p downgrade last week. it is really h

deutsche bank is like this, right?ng about the uselessness of the measure, there are different measures of value at risk. is one we are talking about regulatory value at risk, which is more stringent men with the banks themselves calculate. if they weren't aware of anything unusual, does it mean it is weaker in europe? know, the loss happened in the u.s. operations, so we don't know how it was offset somewhere else. is that its indicate makes it difficult for regulators to understand what kind of risks are being taken here and there. tom: the first quarter there was some upset in february. do you have a clue what they enjoyed losing these dollars on? was it a trade? how did they enjoyed losing these many millions? >> i would like to know. tom: get to work. seriously. how come we don't know t how come deutsche bank shareholders don't know this? >> it is not something they are required to disclose. tom: how much did they lose? >> if you do the math, it implies $400 million. tom: your math is they lost $400 million in one

deutsche bank's u.s. it was the only one out of 18 domestic and foreign banks received an objection. hascompany responded it made significant investments to improve its planning capabilities, as well as controls and infrastructure. in the u.s., police in maryland man is int -- white custody after a rampage at a newspaper office. for journalists and a member of staff were killed after a man armed entered the offices of the capital gazette in annapolis. targeted attack in which the gunmen look for his victim. bank has's central raised their benchmark interest rates by 50 basis points in a bid to halt a deepening slide in the currency. they reverse repurchase rates and have raised 50 basis points to 5.25%, more than the amount expected by economists. u.k. confidence took a turn for the worst, and businesses and consumers became more pessimistic. according to a report, business optimism dropped to the lowest level this year. the decline is driven by concerns of the strength of the economy, brexit, and increasi

deutsche bank says it will report another decline of revenue through june as it scales back investmentking operations and cuts jobs. the german lender is accelerating its focus on europe and the retreat from wall street by having announced plans to cut 7000 positions. multiple turnaround plans have failed to deliver the desired results. that is your bloomberg business flash. guy: thank you. let's talk emerging markets. will get a policy decision from the turkish central bank. last months rate rise offered temporary relief for the lira but failed to draw a line under the market rout. let's get more on what we can expect today. justin carrigan joins us now to give us his assessment. rates aresh policy adjusted for inflation, it has got one of the best yields. is why, going into investors notare optimistic? just in: a do with the bankbility of the central and the independence of the central bank on whether the lack of independence or interference from outside will impact on policy. see investors want to largely today is a serious policy response from the turks to put a line under this wea

>> i think deutsche bank is in the process of redefining their business model right? d business model they're looking where they should concentrate the key issue is not deutsche. remains the holding of government bonds and part of the performance has been because the notion of -- italy has reintroduced a notion of sovereign risk in europe. that's the key issue for european banks it's about sovereign risk. >> that's a nice way of putting it is deutsche bank in crisis or not? >> i don't think so. i think deutsche bank is in the midst of redefining its business model. and it's doing so while having to live with the legacy of many years of over-expansion. >> it's shrinking dramatically though >> it is and it's going to have to figure out what its core business is. and it's not as simple as for banks here because that domestic base is not large enough to be the core business it can be a core business, but it cannot be the core business >> separately, our fed, the ecb, ecb is probably going to raise rates in a couple years. there's trillions of dollars of corporate debt out

to save its troubled business it seems there's some rumor around some interesting rumors terry deutsche bank chairman powell. has reportedly been speaking with shareholders about a merger with competitor could mel spog according to bloomberg talks have not yet reached a formal stage the two banks were said to have broken off negotiations back in the summer of twenty sixteen speculation has grown about a possible merger between deutsche and commenced banks since private equity company severus capital took a share in both banks that's something i would like to discuss with our man in frankfurt only bad really you're standing somewhere in the streets of frankfurt probably not far away from deutsche bank which is germany's number one and now there's rumors that number one will want to merge with the germany's number to lend if true is that a good move. yeah it would not be a good move at the moment monica this is the deutsche bank's main branch here in frankfurt it was the first branch in frankfurt that was erected and right behind at pace they were right across the street from it basically as t

deutsche bank's u.s. it was the only one of 18 banks to receive an objection. the company responded, saying they made significant improvements towards their capital capabilities. we're talking about these u.s. banking sector, including the u.s. units of various european banks. our guest joins us now in london. how is this going to impact deutsche bank? they did not fail across the board. 35 banks all caps. this is about internal risk model control. you can imagine, if you are looking at deutsche bank, it has been in flux. shrinkinglinking -- u.s. rates and focusing on europe. the legacy unit has failed twice as well. youou are sitting there, are thinking, should we become more aggressive and get out of this problem? it's not like they can reinvent themselves. we know that turkey is reasonably tough anyway. it is a multi-year low. well below 10 now. the 81 traded bad. this is not about solvency. this is about visibility. anna: what does it mean for dividends? this is about bringing money back into europe to

you have specific issues for deutsche bank as well. reminder of what happened in 2016 went viability was called into question. bank stocks were getting hammered. right now they are trading at their lowest price to estimated earnings ratio since august 2016 . it is not looking good but look at the wider sector voices -- versus deutsche bank. it is down. not everyone is pessimistic. theiroup has upgraded rating on the sector. the sector may actually be a value trap, but the downside from current levels looks limited as earnings expectations stabilize. keep an eye on deutsche bank and the european stocks index, gtv . vonnie: i like it, but i will go with the industrial theme today and award the winning ticket to mike regan. this is bloomberg. ♪ $1.1 trillion of the world's wealth is controlled by the 25 richest families. it may come as a bit of a surprise the walton family is running two floors of unmarked suites in bentonville, arkansas. joining us now- how did you get on this list besides having a lot of money? >> it helps to have s

alison: for deutsche bank, i think the bigger news is last week.oncern with deutsche bank is there a sense of concerns around regulatory scrutiny. that came with the story a few weeks ago that the bank had been added to this confidential list and sends the list is confidential, there is no way to know the specifics around that. i think we saw that capital at the u.s. subsidiary is in a good position. they did very well in the test last week, along with the subsidiaries of other peers that are going to have their results made public. there is generally some concern around investors with foreign banks because they are newer to the process and there could be a --her risk of qualitative even though they had shown very strong capital last week. for deutsche bank, i think that they are -- they're trust subsidiary which was part of the couple prior years, they did get a qualitative objection, and i think it wants surprise investors if there are issues with the process, just given what we have seen in prior years and given some of the stories we have heard

but deutsch bank is bigger than some emerging markets. >> if deutsch bank was to fail this would be asive global focus. i don't think they're going to i think this is a regional issue. i think deutsch bank also, in terms of the business model they set out to run, one where they have been a lender of last resort, is challenging i don't think deutsch bank is going to improve immediately overnight. it doesn't keep me up overnight. i know it's an easy thing to look to right now. the whole german dynamic, my bigger concern is to the ecb they'll be front and center next week i'm more concerned about the ecb, not because i think there is tremendous dysfunction or they don't have focus where it belongs. i think they have a very difficult xajchallenge ahead of them they need to start talking about tapering and winding down their buying bond program. it's kept yields down. in a week and half, italy has taken all of that out. those are my concerns. those are where i think people should be focused. it's a trading range, i think, we're at the top of the range. i don't see why markets need to rally

we know what we have in front of us, we have a plan >> the problem with the bank, with deutsche bank they had a plan for so many years, investors are losing a bit of their nerves here. implementation was the weakness of the bank for so many years. the last ceo didn't get the bank on profitable footing for three years in a row the new ceo has a lot of pressure on him to actually deliver. >> a lot of pressure on him certainly, that stock down 40% over the past 12 months. thank you very much for that report >> still ahead on "worldwide exchange," it's mystery chart time again can you guess this particular stock? today is a big anniversary for the company. tweet us your guesses. we'll have that answer coming up. >>> and hawaii on high alert mandatory evacuations ordered as lava threatens more neighborhoods. an update on this developing story when "worldwide exchange" comes back overwhelming air fresheners can send you running... so try febreze one. with no aerosols and no heavy perfumes. so you can spray and stay. febreze one. ♪ tired of wrestling with seemingly impossible cleaning tasks

it is opposite deutsche bank. e hear that if you could change the geopolitical structure, because part of the problem is so many different countries and so many different banking authorities. it's not like the united states where you have one federal authority. when you talk about cross-border mergers and consolidations, it is much more cumbersome over there. you have the ecb and individual authorities. alix: i think andrew is good. let's go there and talk about banks. wondered if you're overweight european stocks is overweight european banks. >> yes. the sector faces challenges, but his trading at one of the largest discounts in history. it has been a large performer. wrong point to reduce exposure to the banking sector. there are certain banks with fundamental issues, but you have a eurozone bed is growing, rates moving higher, and we think that provides good, positive profit growth and additional optionality for the sector. alix: can you make a distinction between what region? is it u.s. versus europe, also regi

. >> deutsche bank said it will probably report another quarter of declining revenue as it scales backestment banking operations and cuts jobs. the german lender is accelerating its focus on europe, having announced plans to slash 7000 positions. >> we are learning through exclusive reporting that the chairman of deutsche bank has floated the idea of a merger with commerzbank. we are now hearing that the deutsche bank chair is set to talk to holders on the deal. we know the two german firms have discussed merger two years ago. ♪ ♪ erik: welcome back to "bloomberg best." i am erik schatzker. the head of switzerland's largest bank says, hang in there. the ubs ceo told manus cranny that investors should stay in the market despite the volatility. he sat down with an exclusive interview in zurich, switzerland. >> volatility has spiked on bonds, but if you go back into the levels of the vix in general, fx movements, yes, some movement, but not a lot of volatility compared to the standas we are used. i would say overall investors are very cautious. they are out there observing the situation.

business as troubled that's now led the united states deposit insurer f.d.i.c to add deutsche bank to its list of problem banks the list specifies those institutions with weaknesses that endangered their financial viability. the new blow comes in the middle of restructuring efforts deutsche bank's new c.e.o. christians evening wants to bring it safely back into the black again after three consecutive years with losses and that's no small undertaking deutsche bank shares have tumbled by more than forty percent since the start of this year. was enough about the u.s. and europe there are other countries in the world worth mentioning umbrage to right other stories and we're going to go to india now monika the government of the indian state of tamil nadu has ordered the permanent closure of a copper smelting plant that had been the target of protests for twenty years local living near the plant in the port city of kut the critics say it is polluting water sources and it's a serious health hazard now the owner of the copper smelter plans to appeal against the state government's decision in

there was the barclays story, commerce bank, deutsche bank, which was -- which is old, clearly something going on. can any of these big e's work when you say relatively -- banks should be leaner, smaller, more safe. bigger isn't necessarily bigger? you have to maybe -- better? you have to maybe put aside more capital? in this era of wanting more mergers, what size are we looking at? work,: i think they could but i think the reason we are floated isse ideas because regulators and politicians need to accept them. there is a resistance to big mergers because of a few good reasons, if you create a bank the size of hsbc, you are going to have to watch after it. it needs progress in practice. mark: thank you very much, lionel. julie: we continue to monitor the g7, where president trump has arrived. quebec.ed in he is at the hotel where the meeting will be happening. very pretty picture. it might not be so pretty inside where there might be strife over trade. this is bloomberg. ♪ -- despite claims from putin and the bank of russia, russian state-controlled banks control 70% of all banking asset

to say the least certainly bad news for deutsche bank the bank the i.m.f. termed wald's most dangerous lend brings us to vision has failed the second round of the us federal reserve annual stress test the fed cited widespread and critical deficiencies in its appraisal of the linda deutsch a bag was also criticized for having weaknesses in its data capabilities revenue and law school costs as well as internal controls of the thirty five banks tested the test were goldman sachs and morgan stanley were only granted conditional passes shareholders continued to question the overall health of germany's top lender shares have recently tumbled. so let's go straight over to frankfurt the home of deutsche bank no less and speak to our financial correspondent daniel quote then a daniel this is the second stress test deutsche bank has now failed the bank maintains its undergoing reforms why haven't they had any impact yet essentially what is going wrong. yes you're right the bank has struggled to get many reforms through that was the main reason why we also saw former

markets were up 144 points on the dow futures, and yet if you just read the headlines, italy, deutsch bank is sinking you know, the biggest banks in italy are on the edge. saber-rattling with china. european tariffs you would think the market would be down fairly big we're not up down flat maybe slightly higher. what is ultimately going to rattle these stock markets if anything>> well, look, actual ec downturn, right? a de facto referendum on the year was very different from a real one in italy. again, i think we've seen that we have a strong economy, that we are growing quite solidly into the second quarter. there will not be any immediate decline in earnings in the second quarter we have not reached an economic peak which people have talked about. >> have we reached an earnings peak >> so main point is, we are going to see earnings in the united states rise close to 20% this year. we did a lot of that coming into the year. >> 20% more? >> 20% in total. >> because we've already had a big jump just remember when we're up 20% on a year-to-year basis in the first quarter of the year, making

deutsche bank's u.s. unit flunking the second part of the fed's stress test. nike's big bounce. the foot wear company stompin i expectations. >>> and why weather could be worrisome for the housing market it's friday, june 29th "worldwide exchange" begins right now. ♪ >>> all right. good morning good afternoon good evening from wherever in the world that you may be watching i'm brian sullivan thanks for watching "worldwide exchange." i love giving good news on a friday look at how the global markets are setting up dow futures in the green remember yesterday, of course, the dow futures totally changed by the time the market opened. either way right now we're up 184 points the bond market not doing a whole lot. stocks rising everywhere around the world today. let's check on the asian markets first. they're doing well the japan nikkei the worst of the three. look at the shanghai, up 2.2%. that's one of the best moves in a long time. in europe, a similar story not only green on the screen, but a lot of green bi

to see that bar jump on a deutsche bank.tely tells you about the bar, where it has gone down to. alix: you lawyers. at thescott minor now guggenheim, it appears they want to buy some other things and put it together with swiss -- >> and then sell the stake. this is a broader trend, i think we talked about this idea of big asset managers trying to figure out exactly how to play asset management in a broader sense, the banks especially have a little bit of a complicated relationship and one of the interesting things here because thehe insurance piece is uncomfortable marriage sometimes between asset managers and insurers and they have their investment strategies completely aligned. david: unless you are warren buffett in which case they are one in the same. jason: unless you are warren buffett and it worked out just fine for you. david: i want to remind you what bob iger did with disney, he did it to scale. that's what it feels like asset managers have to do right now. familiar faceis a here on this program and a good performe

and the numbers out of deutsche bank are areas of concern. are repng one-day loss at 12 times the risk of -- of things the kind that worries the fed. they look at this number and ask the banks, well, how did this happen? the explanation is meanwhile, we have another trade in europe matching that. they say, we don't see that. can they really handle their risk? that worries regulators. scarlet: we will get a sense of that later today. onaran, our senior reporter on all coverage of lenders. -- leaves after violating policy. what this means for the company and its strategy. ♪ ♪ scarlet: this is bloomberg markets. it is time for the sector spider report. >> today, we are taking a look etf up for the third day in a row. , down 10%,the year but this month, up 3%, the best month of the year. we have had volatile actions, so it is worth noting. relative to some of the individual members in the sector, this is the m.r.r. function on the s&p 500 consumer staples space. kroger up 9.4%. the best day since 1993. the company put up a better quarter than exp

deutsche bank drama. german lender says there is likely to be more bad news with next quarterly earnings. this is bloomberg. ♪ mark: you are watching bloomberg surveillance. willche bank says they probably report in other quarter of declining revenue as they scale back operations and cuts jobs. europeder focusing on and a retreat from wall street. they have already announced plans to slash 7000 positions. the comments came just before the close, didn't that -- they? they fell to a record close last week. got essentially saying, and why aren't investors reacting in a more glum way? well, they are starting from a low point, as you point out your but this declining .evenue it is a colorful description of this vicious circle they are in. , andning revenue, costs what they need to do is get out of that circle. mark: how do you do that? elise: well exactly, he was not quite as specific. but he sees the restructuring they have got on as the means to get there. in particular, lowering the cost of space and especia

federal deposit insurance corporation to put deutsche bank on its list of problem banks those with weaknesses in danger being their financial viability the revelation comes amidst the bank's restructuring efforts. a corruption scandal is rocking kenya twenty four of the country's highest officials are accused of misappropriating funds with seventy million euros and this court proceedings on fold more and more don't details are coming to light and people taking to the streets in an angry response it's mostly the young people in kenya who are angry kenyan police have arrested the head of the government youth organization with legibly stole the money the funds were slated for financing education and training programs an important project in a country where every fifth young person is unemployed many here feel that corruption is stealing their future and with their chances for better education work and money the public we've reached the point where we can't take it anymore it's just so immoral i felt bad and i thought i should join the others and what. we said corruption makes others lose opportu

deutsche bank's u.s.ails the second part of the stress test wi willfred sat down with the ceo. >> they're down the record time all this week. the market capitalzation is down i asked whether deutsche bank could truly compete again with the u.s. investment banks. >> >> we should see the structure difference of the u.s. banking market the european one, and the german one. there are different conditions and also some reasons for the different developments secondly, there's a lot in our hands. it's all about sustainable profitability. you mentioned s&p reform they did not criticize the stability of the bank. they said this bank needs to get sustainable profit if we can show that, quarter by quarter, then we get the cost under control and i'm confident we get the cost under control. that we have the franchise it will go up quarter by quarter and i think we have reevaluation it all depends on sustainable profitability. we have taken the right steps and i'm confident we can keep up. >> on a different topic, i as

deutsche bank's u.s.he quantitative part of the test, with critical deficiencies across the company's planning. that does not sound very good. lison: it doesn't, but it should not be a surprise. given a lot of the stories that have been coming out over the past few weeks about regulatory scrutiny, this provides more of an explanation as to what some of those issues maybe. david: this is part of a longer term set of troubles for deutsche bank. her stock has been going down and down but it is up a little today. alison: there are two longer-term stories. the stress today and test and regulatory scrutiny, this is the first time this entity has taken place -- taken part in the test has it is a newly formed entity. if you went back over the last three years, deutsche bank's trust subsidiary past quantitatively, tons of capital, but had issues with controls. going to the bigger picture story, with deutsche bank, it has just been several years of not getting it right on the core issues. deciding, this is where we

one deutsche bank failed. let's go to the chart. you can see this is a bank under pressure. a very tough year in so many ways. it is the u.s. unit that is having problems. what the fed said is the 18 domestics take a qualitative section of the exam, and the finding shows authorities added to a list of troubled lenders last year. let's go to the panels of how banks performed after-hours. we saw investors buying in to jpmorgan and morgan is under a bit of pressure. that makes sense. it will be interesting to see. with jpmorgan and goldman, all among these financial firms, they had to scale back proposals and goldman sachs and morgan agreed to freeze their payouts at previous levels. american express, and t bank, and others had to temper their initial request. that is to make sure they have enough money on hand, 28 banks can proceed with the proposals because they were found to have enough capital to whether a hypothetical economic shock. that is what these tests are about. dtv is where you can find these charts. this one tells us the story where been talking about. 13 days unp