-- mario draghi?th a glass half-full, last half empty outlook. the balance of risks to their forecasts are -- unchanged. intra-meeting data, some of it has been good. thebottoming out of deleveraging and credit. that is the good news. that is a bit of a stretch to call that good. on the margin the italian gdp data is negative. factory order data is negative for germany. that would put a positive spin on it. at the margin there is some pretty big clouds on the horizon and it is not looking that good. we look at european bond markets what a brilliant run they had, some would say. at nearly 10% return this year. which think that overall -- trajectory is done on the periphery and will spreads begin to widen against germany? if we take the ruler and a very simple extrapolation of good trend, the spread narrowing trend that is in place that 10 bondspread to 10 year will be 100 by the end of this year and it would be flagged by the end of next year. that is never going to happen area of somewhere between the

. >> has mario draghi called? >> mario draghi has it well in hand, i am sure. draghi, our next guest says that the ecb president could steal the spotlight at jackson hole. thank you for coming in. draghi could steal the limelight. we have heard a couple of voices telling us in the studio and again the conversation in jackson hole about whether or would be theeuro best gift that they fed could give. >> it would certainly be helpful given the inflation outlook. i like going back to 2012 when in london in the closing days of the boe's quantitative easing scheme, draghi said whatever it takes. now we are the closing days of the u.s. q.e., and maybe it is time for him to repeat that performance. announce it, but talk about how the labor markets could be hope by an asset purchase program. hint that they're going to go down that road. >> would he be talking to german lawmakers? is that the stumbling block, the thing that stands in the way between me ecb and q.e.? >> it does not stand in the way of the asset purchase program if it does not involve sovereign debt. press

we will bring you mario draghi's news conference.e're back in a couple of minutes. ♪ you mario >> welcome back. europe's biggest phone company reported results today. it shifted network investments. story front and center for dt. the results are interesting, they tell us something about the business. what we really want to know is how will reorganize. that is the big question that hangs over it. opera iswo-year soap showing no signs of being concluded anytime soon. we saw softbank plot of a plan to buy t-mobile. the good news for deutsche telekom, t-mobile is doing pretty well. it is adding subscribers. this is not a fire sale situation. grilli, they want to get out of theyss soon as they can -- want to get out of the u.s. as soon as they can. know is iliad do and france. it is seen as a bit of a longshot. they are there and they do have a bid on the table. then there are the domestic players. .e have had dish they've expressed an interest in t-mobile in the past. then there are the other domestic player's. comcast. even google has b

the back ofer off more stimulus trap from mario draghi.ed change in france, the move is coming from the ecb. big surprise this morning. french prime minister valls presenting his resignation of the government. we will be talking about that all morning. if you want to talk markets, you can follow me on twitter. "the pulse" is coming up next. ♪ >> calling it quits. the french government resigns following a rift on economic policy. a warning from merkel. germanisiting kiev, the chancellor says the clock is ticking to resolve the battle between russia and ukraine. she speaks live this hour. taking the temperature. key data measuring business climate in germany is out now. welcome to "the pulse." i am anna edwards.

it is all about draghi, isn't it inspect what is not about draghi these days, you have to wonder.he sterling/dollar is at .9333 up by 0.3% from the u.s. dollar. let's talk to chief economist from saxo bank steve jacobs. steve, you've got a very interesting report out. you say that the u.s. dollar has peaked at the trade and reserve currency. why is that? >> first of all, i think it's important to make clear that my big macro call for 2014 has been that germany will get very close to recession. we will trade the bund sets up 11% in the ten-year. so what i've now changed slightly is that for the balance of the year, the u.s. interest rate will outperform bund rates inspect our perspective, that drives relatively the euro/dollar higher. on top of this, on the dollar side of the equation, the latest data we've seen from treasury has had the single biggest negative data point ever in history. minus 350 billion dollars leaving the u.s. i increasingly find that more and more business people get skeptical used not only u.s. support as their investment but using the u.s. dollar as a transa

mario draghi will admit that, nothing he can do about that.t the french calling for more action, they want a lower euro, etc. those guys need to get more competitive within europe. they need to reform. 2% target, below the but what he can do about it remains to be seen. >> absolutely crucial. another piece of breaking news, jpmorgan relating to the hack attack. possible russian connections here. anna has been having a look. >> getting a bit more detail on the size and scope of the hacking at jpmorgan and possibly a number of other banks. someding to our reporting, previously unknown software flaws are being used. it appears the hackers were able to dodge jpmorgan's detection system for months. the month of june to the middle of august it is the. this was taking place. in the middle of august, this was discovered. two people familiar with the investigation have told bloomberg this started in june. what is interesting, there's lots of speculation as to whether this is in any way tied to the russian authority. whether there is the hand of any for

draghi replaced mr. trichet. but they were -- they're really playing catch-up right now, i think, and need to be. >> okay. we really -- >> also, i might add, i might add that the european governments were fighting recession with austerity. and we were not primarily because we had good luck in krong but we had a fairly expansive fiscal policy in the early stages of our he will coverry. >> maybe a thing or two they can learn from the stuff we're doing here. mr. mctier, thank you so much for coming on the program. it's been a pleasure talking with you. >> my pleasure. >> former president of the dallas federal reserve bank. >>> the reaction on wall street to janet yellen's speech was somewhat muted. as few clues were given about the course of interest rates, really. also keeping a lid on gains, a flare-up in the conflict between russia and ukraine. by the close the dow fell 38 points. the nasdaq up 6. s&p off about 4. for the week, though, all three indexes were higher by more than 1.5%. that's a good week, with the

mario draghi does not need information. he knows his economy is in trouble, growth stalling in eurozone and inflation is still falling. after a long-delayed, the ecb is acting. he repeated they are willing to do whatever it takes. he did not mention quantitative easing. is readyggest the bank to "adjust our policy stance further" and use "unconventional policies." he warned the ecb cannot do it alone. he had a strong message for european politicians telling them they needed to get fiscal policy going and easing some of place and cutn taxes. it sounds almost like ben bernanke here a couple of years ago. >> it does sound as if we are going through the same thing except in a differently which in europe because european economies seem to be stuck in a malaise that looks a lot like what the united states was experiencing five or six years ago. >> it was interesting because both central bankers outlined at length the problems with their economies and figuring out what is going on. janet yellen talk about the question of whether i

draghi is being very careful. -- being very clever.here is this overall message and the closer he gets to 0% interest rate, the less easy it is for policy to have an impact. is basically telling us that aggregate demand is too low. unless we have a better policy to acty will be forced on the mandate. unless the government do a lot more awfully quickly which clashes with the timing of the procedures been central banks in the next few months will have to conclude that their role has to be enhanced. >> how much wiggle room is there, to loosen the fiscal purse strings? the are governed by stability pact. what impact actually would have if governments were able to loosen the fiscal purse strings? >> we listen to the upcoming president, mr. junker, with his public-private partnership program. how frontloaded would that be? how aggressive could the european fiscal rules change in the next year to deliver a bit of growth? i would have thought that maximum half a point of fiscal stimulus could be enacted. >> when draghi talks about the skull st

draghi for that one. will the ard, fundamentals get better?doing nothing is not going to do anything good. the same model that sees the lower dollar sees as we come into q one and q 2, we will have strong recovery and strong realization of inflation. i think we're actually in the ninth inning and the final pitch going on in the ninth inning and the market is wrong to think that we're not going to see change. we will have changes if for no other reason is because we need it. i'm the most optimistic i have been in 25 years because its can't get any worse. >> thank you very much for joining us this morning. as we head to break, take a look at the euro. euro/dollar. a big piece of data come out. euro done c.p.i. it does not print a pretty picture of the eurozone. >> telecom italia made an offer for the unit just yesterday. caroline hyde joins us now. are we going to get a deal here? >> looks like it. it looks like winner is going to take all. telefonica offered far more cash. 4.6 billion euros worth. also an option to switch out and into some tele

draghi. what'd you think? >> well, i think, you know, we've heard talk about two-handed economist and vanilla. i think the best description in terms of today is all hat and no cattle. i mean, they're out there on the ranch, and i've been out to jackson hole, not at the fed meeting, but riding horses at the grohan river ranch, which is close to steve. and so, today's discussion from draghi, from yellen, you know, basically all hat, no kettle. they talked about things they've talked about before. it doesn't mean that the fed and the ecb aren't in a position to do additional things. they are. but at this point, we didn't learn much that was different relative to what we knew yesterday. >> you know, it's funny, bill, i hear a lot of people, and obviously, you do as well, that the fed is behind the curve. and i just wonder if we come out of mr. draghi's speech and i'm already hearing from some people that the ecb, in fact, they're the ones who are actually behind the curve, that maybe people were looking for mr. dr

mario draghi will give a luncheon address here.king at bad he thinks things are in the bankone and whether his will adopt some sort of qe policies. the japanese central bank head will discuss the latest. this year, it is mostly academics in attendance. wall street and city economists not invited. michael mckee, bloomberg, jackson hole. >> very nice. tom, thanks for coming in. what is going to be the focus for you? the divergent central-bank policies we're seeing painted around the world at the moment? >> i think they are less divergent than we think. u.s. are facing the same problem. unemployment fell. they are trying to push back the curtain and come up with their own measure of slack, as mark carney has done. itdon't know how they define , we don't know how it actually works. they will tell us when they believe slack has moved up. i think we will get a similar story from there. if you believe the labor market in the united states has changed, we will have a , whichbord of indicators allows the fed to keep holding rates lower. >>

let's go to the monitor to show what is keeping esther draghi up at night. this is the german two-year. this is all you need to know amid a new low in the italian 10 year. the ramifications are back on the united states. belowa jump condition zero. by any definition, this is germany flat on its back. >> i feel it we just keep saying the same thing. i keep expecting for this to stop. i expect being able to say those words. we have the same thing happening again. >> we have the french government. we look at the newspapers this morning. this is scarlet fu. the lastust happened two hours. there's a shakeup in france there in the president has asked the government -- prime minister government.w the education minister and the economy minister called on them tax cuts for households. >> i think you are better at this than any of us. explain if this was forced on him. you how hard shows this is to do in your. oreo druggie says real money from government into the economy. an interviewe is where the finance minister says things that aren't completely in accordance with

a lot of the yield is driven by what mario draghi says.t happened yesterday was probably a couple of basis points. for economy, i think there is a good challenge for france, which is to push for more fiscal -- more social reform. a goovet cuts and dedicated to that will help. >> is that at the margin or significantly? we have a long way to go until 2017 and we get another presidential election. the kind reforms you're talking about is that a meaningful impact or do you it comes about what what happens in frankfurt? >> ireland, spain, even greece. we start to see right now some political -- and unemployment. it is not something that germany used to do. we are seeing now the effect of it. we see the impact. it is not a given. it should have been done back in 2012 and pushed in 2013 and 2014 and needs to be done. >> does he have a point when he more demand and less austerity? >> the problem is the trade balance deficit, if you boost the -- you'll increase the trade deficit and you will not make the problem go away. the margin, the growth marg

draghi's press conference at 8:30.gest if there has been a bit of a change in the u k, everybody is in love with the success of the u.k. some economists are pushing back against what is going on in the u.k. it may not be as good as we have been led to believe. being abler of ever to make a decision at the austerity experiments. he didn't take so long to take hold. by the time the cycle is completed, everybody has their argument in place. >> a quick data check. equities, bonds, currencies, commodities. u.s.-centric. .3377, not much bounds of the boe announcement. 10 year yield, 2.45%. german yield, 1.09%. company news this morning. >> bank of america close to a record settlement in its mortgage backed securities case. according to a person familiar with the matter, bank of america would pay up to $70 billion. -- $17 billion. the government warned it would not settle.ank did apple's decision to scale back a patent fight with samsung might be a change in strategy. the two decided to drop patent litigation outside the u.s.

mario draghi, of course, in the fed. we will target of the relatively flat today.aw big gains yesterday after the paypal news, following a report of carl icahn and his campaign that has encouraged ebay to do exactly that earlier this year. to see quite a push these split off from each other, ebay being one company and then another. >> and panasonic. >> yes, the chief technology officer from panasonic will be on. scoreboardstalling in sporting venues across the country. we will talk about the technology behind all of this. that is coming up at 3:00. >> all right, that is at the top of the hour. thank you. coming up, a u.s. court calls argentina's latest move to settle its debt illegal. we will look at what argentina plans to do next to settle its obligations. "bottom line" continues in just a moment. ♪ >> welcome back to "bottom line. take a look so we the most notable newsmakers from this past week on "bottom line." time went through a long were the consumer denied themselves indulgences. i think that with job security, they are spending a little bit more. that is

draghi makes a big headline. suggestion the more stimulus could be coming from the european central bank. let's call this the post draghi half. rally across all of your. then you have the question about france. the french government resigns. reform and austerity, that will lead to borrowing cuts. france has done none of the above's and they have record low borrowing costs. the ecb could do more. where is the market discipline? incentive for france to reform? they have done nothing. --re is pressure on them politically to do more, they just haven't. story is about domestic politics. it speaks to a broader eurozone political issue. this is the issue of germany against france. the french have not done enough yet. they are talking about doing more reforms. the economy is on the verge of recession. will they reform? record low yields in the french bond market, where is the incentive? surveillance will be here in 25 minutes time. is tomg by in new york keene it to tell us what is coming up on the show. it is good to se

mario draghi will speak later.he ecb president will be asking -- we ask what he thinks the ecb president will be saying. stay tuned. ♪ >> welcome back to "countdown." i'm manus cranny. still with us is investor security chief economist philip shaw. we are talking about jackson hole. the next big speech will be mario draghi. one of our guests from the start of the week suggested that would be the more interesting conversation. draghi has a pretty turgid set of data. pmi under pressure in the currency doing for him what he cannot seem to do itself which is perhaps invigorate exports. where the ecb goes from here is pretty difficult. some of the data has been worrying in terms of the real economy. we have seen a poor second-quarter gdp. france and italy, growth does not really seem to be happening at all. if anything were a touch disappointing but still above the 50 level but still indicating expansion. >> would you please explain to me what use would qe be when you have record lows in a european context? spain, oneyi

man asked a lot about geopolitics was mario draghi. attentionpaid close to president mario draghi's inments on a sharp spike geopolitical risk. world youlook at the see geopolitical risks have increased all over the world. iraq, syria,over libya. geopolitical risks are higher than they were a few months ago. it will have a greater impact than they have. >> let's stick with that. u.s. president barack obama has the airstrikes track civilians -- oil prices up. impact wen the market are joined by an analyst. we will start with you. oil has been on news. that 90% of the oil is produced in southern iraq. >> i think most of the oil production is in southern iraq. that is not necessarily under threat. we are not going to see a number of production lost. been a longer-term story about the future supply growth and whether it can deliver. >> what you are seeing is a lot of hype lines. >> act in march the main pipeline through turkey was bombed. we have already lost those supplies. in terms of incremental loss there is not that much left in the n

. >> alternates bonus, some draghi action. student, because we'll probably come back when those headlines cross. >>> right now the top national and international is the growing threat from isis. we also have some breaking news out of the russia. the ukraine and even more. john harwood has all these developing stories for us. >> ben rhodes is now briefing reporters on martha's vineyard about the tremendous multiplication of foreign policy challenges suddenly on the front door of the white house. a chinese jet had scrambled and intercepted a u.s. military jet in international airspace. that was a violation. ben rhodes just spoke to that. the russian artillery being used to cross into ukraine, which marks an escalation of the conflict, direct russian involvement, not just assisting pro-russian separatists. that is dangerous, and ben rhodes called on russia to not do that and to honor its commitment not to interfere with the territorial integrity of ukraine. finally isis, martin demp sis yesterday was saying that the -- a strategy

mario draghi kept interest rates steady. they held fire at the ecb in terms of new measures to stimulate the euro zone economy. france has been calling for action from the ecb to help their recovery along. figures show it police let -- show italy had slipped into another recession. there were plenty of factors for mario draghi and his colleagues to consider. let's listen to mario draghi as he spoke about the russian risk, in particular. >> the likely impact of the sanctions on the euro area economy -- we see risk especially coming from say the price of energy. but as i said, it is kind of difficult now to precisely define what are the options in the future. >> noervousness over the russian standoff with western powers. we've seen stock markets trading lower this session. the u.s. markets have turned into negative territory after being in positive territory earlier. investors are digesting some upbeat economic data with a number of new job seekers falling more than expected last week being overshadowed by the geopolitical ten

i think mario draghi has a point. it was very surprising when these comments came out because you have seen the comments on fiscal policy rather than monetary policy from a central banker. i think there is a lame message that the politicians have a sense the ecb -- there is a latent message that politicians have a sense the ecb can do more. >> you are bullish on equities. are you bullish on the perception that the ecb will do more on the reality that they really think that they will do more? what are trading on right now? >> it is definitely on the perception of what ecb is say ing. the press conference was clear. he highlighted that there are problems which could arise if the ukraine conflict gets bigger. but that means that ecb might come in quicker. it is difficult to be short or sell the market thinking there is going to be capitulation, because you cannot fight a central banker. arian has come out and says this is a sucker's bet. even if the ecb does act it will not solve the problems. what is your take? >> my sh

mario draghi putting investors very much in mind of quantitative easing. that is certainly the topic of conversation. we haven't seen anything being announced just yet. that was adding weakness to the euro. then we got the resignation of the french government and now we have this lackluster indicator coming through on the german economy. let's get back to some of our breaking news. france's prime minister has presented the resignation of the government after meeting with president hollande. it follows a disagreement over policy between vowels and the economy minister. caroline connan joins us with more. is that what this is all about, and internal falling out within the government that is calling into question the direct and of the french economy? >> exactly, anna. that comes after the economy criticizing the way that president hollande and prime minister manuel valls are handling the economic policy of france. the economy minister said in an interview and at a gathering of politicians over the weekend that france was going in the wrong direction. he had t

draghi seemed desperate in jackson hole.ed to want people to do anything to have any confidence in any country to fix their own problems. >> the concern is everybody is allergic to physical effort. dash, the biggest thing they have done is raise taxes on consumers. everyone is a bit allergic. you have to have a certain sympathy for that because in the next couple of decades, the budgets are going to be strained because of demographics. there are a lot of old people coming. they don't have private resources and they will have to be supported by the government. that lookinancials greek or japanese or fix the budget now. that is one set of arguments. the other set which is more in the krugman line of thinking is if you use physical effort now, you will have a bigger gdp and it will be easier to carry those burdens later. the evidence is that the body politics everywhere has chosen a degree of austerity. >> i just wrote down my message for the morning. is fix the have budget now so we can trash it later. >> i wanted to bring in

one man talks a lot about markets who is mario draghi.ly has only itself to blame for the third recession since 2008. we will have more on the ecb meeting. ♪ >> welcome back to "countown," i am manus cranny. >happy birthday. >> how old are you? >> 39. nevermind what age i am. >> 39. >> is a good age, apparently. we have a lot to get through. you did the ecb yesterday. that is priced into the euro. we have politics. what trumps what these morning? -- trumps what this morning? >> everyone saying, really. you see exports up 70% in july. everybody saying, really. i will leave you with that and what you think about the chinese data. today will be about geopolitical risk and obama authorizing strikes and iraq. really going to hurt sentiment. for me, mario draghi and the ecb -- >> you thought it was an odd meeting. >> it was so bizarre. at one point, he sounded like an epic strategist -- like a strategist. the euro did nothing. aboute did -- talked intensifying efforts. then about hiring a consultant to develop a plan to read how far along are y

how much longer can draghi hold -- i guess he can do it indefinitely.re they're not political -- are there political pressures within the countries themselves? it is a global phenomenon. if you think about europe, what they would like to see is the -- disappear. that is the key thing here. they're probably going to take more action. if you listen to draghi yesterday, he likes to see the government take the right action. it has been remarkable how strong it has been. >> let's come back on this. let's get to our twitter question on the -- question of the day. should u.s. boots follow airstrikes? tweet us. ♪ >> this is "bloomberg surveillance." let's get you some company news headlines. murdoch's publishing company reported quarterly earnings that missed analyst asked him it's. cbs no longer wants to buy cnn. fox made a bid for time warner. murdoch said he would sell cnn if the deal went through. 's japanese parent company having growth issues of its own. profit missed estimates. they're getting squeezed by discount calling plans. u.s. forking to the growt

. >> you could call it the draghi affect. all eyes on mario draghi and the european central bank. it is so important, it is still working now to increase share prices here. draghi let the people in the market know the ecb was still ready to use all instruments, conventional and unconventional him on hand to propel inflation. that means more money for the markets. also playing a role in a higher share prices today, going from minus early two plus late in the day, the reports of a cease-fire reached in the gaza strip. >> we will stay in frankfurt for a closer look at the numbers. the dax gained 8/10 of a percent. the euro stoxx 50 day up 1%. in new york, traders are still busy on the floor. the dow jones coming right up for you -- is in positive territory. and the euro currently trading down at $1.31. racial tensions in the united states were in focus at monday's funeral for michael brown. that is the unarmed lack teenager who was killed by a white police officer -- unarmed black teenager who was killed by a white police officer. our reporter went to gauge the effect on the communit

futures this morning, steady action, and draghi is on the tape. more "squawk on the street" live from the post nine at the nyse in a minute. just take a closer look. it works how you want to work. with a fidelity investment professional... or managing your investments on your own. helping you find new ways to plan for retirement. and save on taxes where you can. so you can invest in the life that you want today. tap into the full power of your fidelity greenline. call or come in today for a free one-on-one review. bewkes. >>> netflix posting on facebook yesterday, quote, last quarter we passed hbo in revenue, we are making progress. hbo rock, and we are honored to be in the same league. this is turning out to be boeing, air bus, pepsi, coke. >> i like that analogy. reid hastings, when i was a homicide reporter, this guy is good copy. he cannot resist and posts this stuff, but basically, one of the things that came from the disney conference call that was interesting is how much iger likes netflix and stands for people saying, listen, i know you th

the comments from mario draghi. >> what is he going to do about mario draghi? talk about the fiscal side of things. it is going to be very, very interesting. withme sort of way to deal things in the euro area. the french parliament. >> everybody is teething up. >> yes. mood music. not exactly ready for change yet. the german economy is slowing down as well. the low yields already reflection of increased optimism and reforms in these countries is what we are being told. >> yeah, yeah. >> it is going to come in at 0.3%. lower targets. we are aiming policy a germany. it is huge. if i said next week was huge for the ecb, everybody would have laughed me out of the room last week. without the ecb was on hold for the next two months, but everybody has started to change their course. much, guys, thank you very indeed. that wraps up "the pulse." we told you what to watch for the rest of the day. let me tell you what you should be rocking -- watching for the rest of the day. "bloomberg surveillance" is up next, tom keene and his team will be taking you through the next f

to a guy like you, how original is this moment if janet yellen and mario draghi speak?y summers had it on the nail when he suggested there is a natural disequilibrium we are having. you need asset bubbles to get the demand you want and get anything sustainable. we are in an unusual situation. >> do you have a confidence that the disequilibrium that we see right now can be brought back in in an orderly manner? bill dudley would say yes. the you have confidence that we can get to where we need to get to with stability? >> i would not say i have confidence. i'm still very, very scared for example that at some point in time growth does slow and you still haven't really ratcheted up interest rates so monetary policy can ease again and you get policy traction in a normal way. >> alan ruskin, thank you so much. we will never briefing about at -- janet yellen and mario draghi later today. the forex report. it is a vanilla report. yen. euro-yen. it has done nothing for two weeks. sterling is weaker. to go toson is going harrods on his next soirÉe to london. throughs turning augu

the euro fell on draghi's comments on friday after europe was shut.ou can see that the euro took another leg down when europe opened for trade or asia opened for trade again today. so $1.32 is where we're trading there. all this is not playing the same in france, needless to say. you may recall that mario draghi also opened up the idea that there should be less of an emphasis on austerity within the eurozone. however, when one of the french economy ministers repeated that in interviews over the weekend, monsieur hollande was so furious that he ordered a dissolution of the french cabinet. they will re-form under the prime minister tomorrow, guys. back to you. >> no shortage of activity over there, simon. we'll see you again tomorrow. >> always something going on. >> oh, yes, simon hobbs. thanks, as always. >>> when we come back, when any actor gets an emmy nod, it usually means a major boost for their career. but what does 31 nominations at the emmys bring netflix investors? more on that in a moment. >>> plus, two tesla owners took out an ad to ask for

mario draghi must be relieved as he goes to jackson hole with that.view in terms of where we go with rates, in terms of p.m.i., that is going to be important. in terms of the commodity currencies. china missed on their p.m.i. data and that is causing the aussie dollar to come down. the flash p.m.i.'s come in at 50.3 down from 51.5. trading off its lows of 92.60. -- .9260. >> these are the bloomberg top headlines. the federal reserve has released minutes from its last meeting. it shows members of the fomc are uncomfortable about the central bank's forward guidance. many members believe they might have to raise borrowing costs sooner than anticipated. the chinese manufacturer gauge fell more than analysts forecast in august. the preliminary purchasing managers index at 50.3. the estimate was 51.5. there are concerns that china will miss its growth target this ear. the decision came hours after islamic militants released a video showing the beheading of american journalist foley. david cameron returned from his vacation to discuss britain's response and

draghi himself is a leader to this. it's not a coincidence that mr. draghi has been stepping up his calls for closer political, economic and integration. >> let's get back to the markets quickly. the ten-year german bund yield falling below 1% for the first time ever. once again, it shows us concerns about disinflation, shows you the safe haven flight. interesting stop between france and germany because the dundes bank chief said yesterday urging france to start setting an example on budget matters while today it seems as though france is slashing the deficit targets, is slashing the growth targets. there's no reason for france to be smug about the numbers today, even if it beat germany in the second quarter, right? >> yes, indeed. we are going to get weaker fiscal positions, that's clear. i still the think there is a call for germany to do more. >> in terms of wages, for example. >> in terms of wages. and in germany, it's lower, around 1.5%. when we talk about structural e reform. there's more to be done. we can look further ahead with demographic ch

>> that's the question, whether from draghi will have the glass half empty or half full.t depends on which economy you're looking at. they're really one can say in spain this economy looks quite promising when it comes to recovery. unemployment tickers are still going down even though they're at high levels. mr. draghi will be very concerned about emanating should russia go into ukraine with their forces. that would mean a substantial shock for the eurozone. also the sanctions on russia and now the sanctions by russia on european corporates, will weigh down on economic activity in the eurozone. it will be interesting whether we see or hear a more dovish mario draghi during the press conference which potentially could also have a negative impact on the euro exchange rate. right now, everyone expect this ecb meeting to be a nonevent when it comes to policy actions. but there could be some rhetoric from mario draghi to weigh down on the euro exchange rate. also the inflation which is still below the trajectory the ecb is envisioning. there might be some update here. the offi

it comes in secondary. >> mario draghi is the michael jordan of jawboning. nobody's ever done it better. he's done nothing but use verbiage to use the market. >> expectations right now in europe are collapsing. is it working? >> my concern for the entire world marketplace right now is that draghi will be painted into a corner and the emperor's clothes will be shown that there is nothing there and that will lead to this fearful correction. i think the correction has to happen in the fixed income market, not the stock market. the stock market will correct as part of it as the asset classes move but we will eventually be the beneficiary of that. >> time after time -- >> hold on, heather. >> stocks are not a bubble. they're fairly valued. maybe a little bit more. but the world's growing. so stocks will be okay. but bonds, we went down for 30 years. there's no reason why we can't drip up for 30 years. there's no greater skittish investors than a bond investor. >> all they've done in the last three years has go down. we were down to a 1.40 yield in 10. >> kelly, y

i'm going to be monitoring draghi today.n't have the consensus of the ecb -- >> the germans. >> the germans to make this change. and i think that's something we're going to want to watch. and we know what's happening with the fed. the fed is going to stop qe in october. and then we're going to go to interest rate hikes eventually. >> all right. thank you, steve. >> sure. >> steve liesman. all right let's get back to our guest host mario gabelli, gamco's chairman and ceo. you wanted to make a point about mlps and reits. >> just allowing capitalism under the capitalistic system to go to its higher rate of return risk adjusted after tax so companies are going out getting rulings from the irs, private letter rulings, plrs that they can convert part of their asset base to reits. the most recent one was the windstream at telephone company that had pipes in the ground of copper and fiber that applies to a lot of other companies. you saw outdoor advertising. so the extension of what is in quote eligible assets for a reit is taking o

we're showing draghi. the unemployment rate. my favorite line where she said the rapid decline, you see it on the chart. the rapid decline in the unemployment rate likely overstates the improvement in labor market conditions. to me she's saying she doesn't believe that 6% or 6.1% is anything to right home about yet. she's not a believer here jerry. >> no, she's not. and i happen to agree with that. about half the decline in the unemployment rate is due to people dropping out of the labor force. it is not a good indicator anymore. liz: jens, i need to get to how the smart money should invest right now. people initially knee-jerk reaction saying i'm going back into stocks. you saw about a $9.9 billion inflow in the stock funds in the week that ended april 20th. 2.4%, they realize it's going to be like that a long time. i'm going into stocks. what is your trade now? >> we are focused on being along the dollar, because even if u.s. yields are not going dramatically high, we saw on the back of the comments, the ten year rate is stabl

i think draghi today has a majority in favor of qe on the ecb council.is problem is the timing of the decision and whether he keeps on board with the germans. i think if he goes for an immediate decision, he probably won't have the support of the president on the bundesbank. if he wants his support, he has to wait a while longer for the numbers to be unequivocally week including in germany, perhaps inflation moving closer to zero. at that point it is easier for the bundesbank to secure qe. aesill be a combination of and government bonds. >> do we overstate the bundesbank's influence on the ecb? do they really have the biggest say at the ecb right now? >> germany is the biggest country in the eurozone. is huge and european decisions. there are a few satellite countries that nominally support the german view. there is a bit more than that. 20% depending on the indicator you use. i would say germany's influence is at least one third of the votes on the council. isarly, the political weight disproportionate. because of that, i think draghi always prefers to

they all seem to be facing this kind of problem. >> so is mario draghi right, does the eurozone needstimulus? >> of all the policymakers makers in the world, he seems to speak the most frankly about the situation. i think he grasps the severity of it. >> he touched on this in jackson hole, it seemed like he was sending a warning shot then. >> i'm not sure he will be able to do anything next week as many think he will enact something new next week. i'm not sure that he will get in next week, but more than others, he seems to grasp the structural problems in these countries, citing the high tax rate regions, the inefficiencies in the labor market, and also the rigidity in enabling small businesses to form. and he speaks very candidly about that in public, and that has enabled policymakers to discuss it more openly. >> you mentioned the ecb policymakers. they will be meeting next week. this discussion, will it be dominated highways to hear the eurozone away from deflation, or might they see this recent data as an aberration, as opposed to structural? >> i think mario draghi sees this as

>> i think janet yellen is a wonderfully experienced and capable central banker, as is mario draghi.ave magic elixers. i think maybe we are expecting too much from the fed. maybe even the fed is expecting too much from the fed. >> is she expecting too much by saying we should still have 0% rates because there's too much slack in the wage growth and too many temporary workers? >> i think we've proetty much runt course with what qe3 can do. to be honest with you, i'm increasingly inclined to support the position of those who suggest that it is probably time to shift gears here. interest rates are going to rise. they're either going to rise by a decision of the fed or by market decisions. frankly, i am inclined to think that the markets will move the rates probably before the fed does. >> just on this subject, maybe it is a technical question, but what do you think about the fact that the 10-year yield is now below 2.4%? this huge rally that there is in tes treasuries. market interest rates are not rising. >> it is a remarkable rally. i think it reflects the huge geopolitical uncertaint

i mentioned mario draghi. he is only part of the picture today. talk to us about what is pushing the dollar higher. >> i think it is accommodation of factors that have taken place over the past week or so. last wednesday we had the minutes out from the fed, which basically was saying that the fed could look to move rates sooner than currently anticipated if the data continues to improve. now, that provided a little bit of a boost to the dollar last week. yellen was speaking at jackson hole and she reasserted that, but she moderated her thoughts little bit, talking of slack in the labor market, but again saying that she sees signs of improvement and because the market was primed to hear more neutral-to-hawkish sentiment, they reacted to that in the dollar gained as a result. >> she seems to be expressing more division is. -- dovishness. >> she has been consistently dovish the past few months and the markets have been waiting for some kind of change in tone, and are prepared to seize on very small nuances suggesting that change. >> maybe even imagin

draghi kind of basically said, we're still not doing enough.y've got this ukraine headwind, germany has been sticking by the notion of austerity. why? low unemployment, in great shape. i see rebellion among the ecb. i see the french -- we can't keep going with this. germany's saying, look what spain did. spain got -- they fired a lot of people, tightened their belt, now they've got growth. but they don't have employment. french want employment. it's difficult for the germans to say we're going to block the russians, even if it hurts our economy, when other countries really bad growth and they've got to get the economy going. that's -- we're up, you woke up, you thought maybe ukraine, maybe it's calmed down but the russians will send another convoy, thanks a lot, russia. things are heated up. parading prisoners, doesn't matter. france is saying this is bringing our economy down. germany relent. a rebellion against girmermany l mean more qe-2, thinking the fed will have low interest rates which means more burger kings, more tim hortons. >> does s

draghi is going to talk about -- >> upslack. >> look at where the euro has gone versus the dollar. it's going like this. it's going to keep going like that, judge. i'm sure a lot of people are going to be calling for $1.24 rather than $1.32 where it is now as that continues. so who is that good for? well, again, dollar denominated things are going to be more dear. >> let's go out to jackson hole right now. steve liesman is out there. he's joined today by atlanta's fed president and fomc member dennis lockhart. steve, before you ask your first question to president lockhart, would love your opinion on what you heard the traders describe what they got out of today and how we should be thinking about it. >> you know, some smart comments in there, scott. i think there's been some movement but not very, very much. i don't want to give you my thoughts instead of giving you some time with dennis here. dennis lockhart, atlanta fed president joining us. denn dennis, it seems like we're at a deflection point. i heard janet yellen was strong about labor slack. she had some questions about lab

. >> the ecb president, mario draghi, is becoming less optimistic from month-to-month. this thursday, druggy not only announced that the main interest rates in the eurozone remain unchanged -- druggy -- mario draghi not only announced that the main interest rates in the eurozone remain unchanged but said that growth was week and uneven. as if to underline this, several companies with strong ties to russia reported disappointing earnings. for example, adidas. industry production of germany overall a be weaker than what experts had anticipated so far. >> the question on traders' minds -- is europe's economic powerhouse set for a slowdown? >> this cause for concern because some disappointing data has been rolling in for germany over the past few days. after he orders are coming off recent highs -- factory orders are coming off recent highs, and a leading research group says growth could tail off in the second half of the year. >> germany's strong manufacturing base has earned it the title motor of europe, but that motor may be sputtering. the ukraine crisis is one reason i

draghi delivers. at the where's the beef stage, and we'll see what happens. >> certainly expectations are rising. what do you think of the cross asset correlation break down? that is, lower yields, higher stocks, stronger dollar? what does that signal? >> well, you have to remember that some of that gets static from geopolitical turns. talks in ukraine. yesterday, we saw a reversal, went in sowning hardlined, came out sounding like they might get a cease fire which is interesting because the ukrai ukrainians want to proceed, but mr. putin got his way and a cease fire is coming. as to the divergences, i think i'm going to keep watch iing th yield on the 10-year and see where stocks go. i think you can have to going on. the yields in europe so low you'll have u.s. buying of u.s. bonds. >> art, thanks for that. good to see you. opening bell four minutes away. c for a while... but now that we have the adjustable base, it's even better. male speaker 2: when i put my feet up on this bed, my stress just goes

. >> we have draghi and what's going on in europe. >> we do. as put yesterday, of course, dissented from the fomc in july, but the fed is running a risky policy and is not reacting to the change in the data, and she's choosing to talk solely about the labor market. maybe this is a smoke screen for the mandate of the market, but what they work out, how they exit these huge positions that they have without actually causing financial upset, which is a clear possibility. did you see, now, $1 trillion of corporate debt has been sold again in this country, this year, at super low interest rates. >> and it is the fuel of what's going on of cheap rates of borrowing, no doubt, talking about m&a and see it today, a deal like one that's not going to get a lot of headlines, but borrowing significantly to get units from duke energy this morning. that is, again, a deal occurring because of extraordinary low rates of borrowing and willingness to bridge and the junk market is unbelievele. >> will they invest in businesses in terms of capital expenditures, and