joining us is nandini ramakrishnan, global market strategist atjp morgan asset management. a really interesting story. draghi said it is no longer deflation, it is reflation. this is a turning point? so inflation coming back up. prices changing month after month, year after year getting higher, means consumers want to spend more, more important for draghi's case is acknowledging the growth in the eurozone. the political risk has subsided that we started the year worried about. a lot of good things in europe which he has acknowledged. as we saw in the market yesterday with that acknowledgement yields go up. because we're seeing the end of a long era when people are used to low interest rates and used to quantitative easing, as things change, are people going to struggle? the key reactions will be in the markets. so, institutions and investors who hold bonds will feel the brunt of that change soon, but we don't expect european interest rates to go much higher than they are. the first thing the ecb will reduce the qe programme that affects the bond markets more than interest r

global market strategist at jp morgan asset management. we're going to go for a quick break but do check out world market's blog that runs throughout the european trading day. we'll approximate back with plenty more coverage in two minutes. >>> held rowand welcome back to street signs. here are your headlines. a disappointing drug trial sent roche lower after a combination of its key breast cancer medicine only has modest benefits for patients. burrberry falls out of fashion with hsbc downgrading the luxury fashion house one month before the new ceo takes charge. a aaa day. apple tries to take a bite ou of amazon while alphabet tops the $1,000 a share mark for the first time. sterling finds some support as politicians return to campaigning with teresa may pledging more armed police in the wake of the attacks. >> good morning, if you're just tuning in let's show you what your futures are up to at this point. the s&p 500 seen by 2.5 points. nasdaq slightly off by 1.5 points so this is after u.s. markets were back yesterday. dow off by 0.4% a

morgan asset management. a look at first word news.ismissssian lawmakers the testimony of former fbi director james comey as insignificant as said president trump fired him to impede an investigation into russia's ties into the trump campaign. and the conclusion that russia tried to meddle in the polls. a russian political scientist saying they have no effect in russia. what are the scientists telling reporters that it has been tried to blame the russians for what is going on in america democracy. more of the story in the next half hour. -- innews on this friday other news today, we are going to continue to follow the british election, the results and last night we are friday. theresa may is trying to find a government and may have to reach out to some of the opposition to do so because they are now in the minority in the u.k. the european union president donald tusk given his reaction to what was going on in the u.k. today and concerns about brexit and those concerns are being echoed across europe. we will follow that in a few minutes

morgan asset management. he is still here with us on set. good morning to you.arted out this program talking about the euro positioning. matt pointed out that it is incredibly hard to see, but this is a small green line here. chute.is a green leverage funds are impressed. el recovery,unlev but people do not give it as much credit as it is due. ecb has to provide a backstop for very peripheral countries. there is no way they will ever as a currenthese strategy for monetary policy, but our view is that the timing is right and the unemployment story, from a headlines standpoint, looks excellent and we will see this removing some of the emergency measures. to --a and the fed has the ecb will be doing something similar in september and i think that is a stronger europe. matt: are you concerned about the inflation? we were talking about the inflation in the united states not meeting the fed's target, and the inflation is not going to hit that target. they will have to do a languishing and stagnation type of environment and we are not ghteningabout a ti policy, but in

morgan asset management.anet yellen, so much to talk about from this press conference and what did or didn't happen in markets. they are data dependent, but we're talk to ignore some this data because it is a bit noisy. david: they are in a difficult situation where historically you'd expect inflation pressures to ramp up. withdraw,to gradually the key word is prudent there. at the same time you have some unusual things going on in the global economy and the u.s. economy which is dragging inflation down. a couple of key things in the p intion data, core cpi august of last year and is down to 0.6. so there's nothing to see here for the moment. bloomberg intelligence, we talked about the balance sheet. they given some caps in terms of what they're doing but i love going to be like watching paint dry. what did you interpret in terms of the cap's? >> it's quite ambitious, they want to wrap it up by a further $10 billion to get to a point where in theory they will be allowing $50 billion a month to roll law, if it

morgan asset management , talking about what they are doing. the sheet numbers, about $1 trillion will be taken up the balance sheet if they say at the caps they have announced. but what is the endpoint for the balance sheet? europe has underperformed the united states in the past two months. blackrock with us this morning. they are saying still the tilt of the flow should be in europe and any drawdown is a moment to look at those. the balancing act tonight at the mansion, you have philip hammond, the chancellor, telling us what a pragmatic brexit is. but another critically important set of rhetoric is coming from mark carney. he has got a -- this is the probability. from 65% todown, 35%. this is the central banker who is tethered to an awkward situation. he has run out in terms of interest rates. he could go negative. we know his view is not towards that. e is really qe. q the economy is slowing down. g7 to theest in slowest in g7 from a central bank fully engaged and taking its foot off the pedal. what a different set of problems for him vers

morgan morgan asset management. financials are up for tenths of 1%, slightly stronger as well.d a nice session in asia. tomorrow you have mario draghi hitting center, so where are we going to be on that? we are waiting for the opening print to come through. what i had here is the price-to-earnings ratio. what we have here is nestle's premium. this is the forward pe. it's trading at 11% to its peers , that is compared to an average. the average differential is a premium price of 4%. loeb are many reasons and want to get into a more aggressive play with nestle and the new ceo, will they get on? will the new investor help the ceo put through some of those big agenda setting pieces that could send -- change the structure of nestle? that is the debate in the market. the quote was 1% higher on friday evening. the gilt market at the bottom of the screen, up 4.45%. the market likes the fact that dan loeb went in for shares of $3.5 billion. now guilt, the chamber of commerce this morning, and the director general, they are putting forward their view on went the first rate hike will go t

morgan asset management. thank you for coming on. charles, how long does theresa may stay in power? far as she is concerned, she will stay there as long as possible. she is already assuming i think that she will not be running the next general election campaign, so that will give her four years. francine: she will last four years? the maximum she can last, but i don't think she will make it that far. in brussels are already wondering who they will be negotiating with. they have made the calculation she will last as long as that. i think boris johnson would like to take over at some point, but it seems her party is rallying behind her in the short-term, just because on the brexit side of the party they fear the brexit talks will not get underway. and on the more moderate side as well, they fear if you waste timed you could end up with a disorderly system. as an is the party works out a coherent transition into someone else, i think she will be gone, i think three months to a year. francine: what does this mean for the markets? continuedonsiderin uncertainty. we don't know what car th

morgan asset management. fourxt, barclays and former executives have been charged with conspiracy to commit fraud in 2008. we have that story, next. this is bloomberg. ♪ francine: this is "bloomberg surveillance." i'm francine lacqua in london. shing plans toa retire by next year as chairman of his flagship ck hutchinson holdings. according to the wall street journal reports, citing the people familiar with the matter, he is not set a specific date. the tycoon plans to remain a ceo advisor and keep his office at the headquarters in downtown hong kong. tesla is said to be close to an agreement to make cars in china, avoiding import taxes. according to people familiar, the deal with shanghai authorities would lead to a production plant, and could be announced this week. tesla did not medially respond to comment. the group is considering an initial public offering of land rover on the international stock exchange. official havepany helper luminary internal discussions over the last few months about the listing.

morgan's we have j.p. asset management strategist. on what oil will mean for the fed cycle of rate hiking and the asian markets heading this week. that ♪ a flatres pointing to start in asia, global stocks near all-time highs. takata will file bankruptcy in japan, then the united states. toshiba hopes to reach agreement on its chip sale by tuesday.

morgan stanley. guy lebas of jenny montgomery. and margaret patel, with the wells fargo asset management. quote itselfthe from mario draghi.hese are the words that seem to move markets. as the economy continues to recover, a constant policy stencil become more common -- stance will become more accommodative, and the central bank can adjust the parameters of its policies, not in order to tighten the policy stance, going to keep it broadly unchanged. jonathan: so there were the words of president draghi earlier this week. big moves in the bond market off of it. bundsry yields higher, absolutely plunging. jim caron, to the market misjudge the speech? jim: yeah, it is kind of interesting. said hishat draghi 100% correct, that they're not looking to tighten, editing to remove excess accommodation -- looking to remove excess accommodation and keep them at levels consistent with where financials needed to be. i did you his talk -- i did not view his stock is overly hawkish. it is a reinforcement of what he was already saying. whent came at a time people were expecting a dovish comments and we look at inflation trends in the u.s.,

assets under management. tom: tom mackenzie with the chief executive officer of morgan stanley, james gorman.is about the market. -- arey day, you should we getting there because of irning expectations growing don't see upside without further confirmation in the story, but i do not the and overvalued market. tom: that was beautiful on the parsing of the market. let me talk about what you said abouttom: that this or is it th. >> i like to look at price sales. it is a good indicator. returns in the united states are going to be more muted. stocks are quite cheap. stocks still seem more attractive. if you look at -- investors are buying broad indices. if you look at the top 10 names, they are trading around 3.5. that is elevated. this is an environment that should favor active managers. tom: let's go to the chart. for those of you studying for cfa exam, this will be on level two. movingre cfa gorgeous averages, which means you get in the market and stay in the market. how do you courage to stay in the market? for a variety of reasons. we are likely in a longer term bull market. it does not mean