patrick armstrong at plurimi wealth. be joining us on bloomberg radio daybreak europe live on london dab digital. you can always catch us and our colleagues on bloomberg radio as well. let's take a look at the stock of the hour. wpp has been crushed this morning, dropping the most since 1999, trading at the lowest level in about six years. sf we take a look at why, a mis on the third-quarter. guidance has also been cut. wpp, down 14.8% intraday, signaling things will get worse before improving under a turnaround pledged by the new ceo, mark reeves. this is the world's largest advertising company, we cannot forget that, cutting its sales outlook revealing a big earnings miss. that is what we are watching today. the gd function is where you can dig into a lot of those numbers and get more analysis on the stock of the hour. up next, stock movers this morning, including swiss logistics company ceva up 30% this morning. we tell you why next. this is bloomberg. ♪ nejra: this is the european open. we are 42 minutes into the equ

francine: back with patrick armstrong. there was quite a move when it came to treasuries. continue and hurt equities like jeff says they will? patrick: definitely the u.s. equity market is longer in duration than ever before. the companies driving the markets have no earnings right now and all valued on what their earnings may be. u.s. market, very long duration. bonds, people think about duration, we're short both because of interest rates. will we witness the biggest years?nd crash in 20 patrick: there's a generation of investors that don't know you can lose money and you may get a vicious circle where you see capital drawdowns and you are risk free and get the yield curve which is natural and when you get inflation you get a voluntary measures. and i think we'll see the fed deliver on their dots. powell spoke reasonably hawkishly yesterday but his whole premise is we don't have inflationary pressures right now. they are there and building and the feds looking at cages, and four years ago it was .2% where it was 7.8%. talking hawkish and getting to neutral but something e

raffaella temconi, gene frieda, patrick armstrong.ef economist of the italian treasury at 8:30 new york. this is bloomberg. ♪ francine: this is bloomberg surveillance. tom and francine from london and new york. tencent, theabout giant has been hit by a record-breaking selloff that has wiped out $250 billion of its market value since january. the losing streak might be over as its shares ever is in up to a percent today. -- up to a percent today. -- up to a percent today. how much of a concern is the recent market turmoil? the market turmoil is clearly being carried over into tencent and is a proxy. growth story for many years because of people optimistic about china, the middle class getting their hands on technology. , tencent is in the firing line. francine: what needs to happen for the share price to recover? will it bounce back? we have seen it recover today. it was up last time i saw. times forwardt 20 earnings which is what its peers trade. google trades above it. what it is doing and the reason for skepticism is it is spending

patrick armstrong is chief investment officer at plurimi investments.ow much are you investing the italian ten-year bond market. >> you got to watch it the budget will come to a crux in the next few weeks. the eu is not happy about the stability that a 2.4% deficit will achieve 2.3% is a key number, you can argue that's sustainable that will lead to a reduction to debt gdp if they come at 2.5, debt to gdp is growing we're talking about decimal points now there was a headline this morning that the market is overreacting to an economist in italy saying these problems could be solved if we had our own currency he stepped back from that a bit. i don't think we're in the midst of an ita-leave, how ever you want to brand it but i think the eu and italy will come to a compromise >> you nailed it, patrick. the reason we're talking about it is like the reason we talked about greece so many years ago it's no insult to italy or greece, but their markets don't matter that much by themselves the risk of greece is that it owed money to germany and other countries in

joining me is patrick armstrong.d morning. >> let's talk about the intraday move yesterday does the fact that we got down 2% or so in the s&p and rallied so significantly over a percent into the close on wall street suggest that valuations got low enough and it's time to buy? >> i don't think so. valuations are stretched i think the one measure people talk about is price to earnings, that's the easy measure that everyone looks at. markets are not incredibly expensive on that measure. if you look at price to ebita, the market has never been more expensive. we come off 10% since then still incredibly expensive operating margins, profit margins are at record highs that will turn the corner things making earnings look good is you got record high profit margins. 10.1 mr 10.1%, never been achieved before >> so the valuation point you're saying is relative to the fundamentals, which is crucial to view, relative to the earnings outlook as opposed to the arbitrary point that the market is overpriced relative to europe it's ov