by the weekend we will know if the pboc needs to do more or use auto tools.ntain lending programs and make sure credit gets to key part of the economies. so, i would say at the moment we do not know what to the pboc's next step is. jonathan: may be whether the shanghai composite it is going next. the chinese does including in the msci index and a decision is due later today. is it an incremental type of thing? could it be that significant? enda curran: if you and i knew where the index was going, we were not sit in these chairs. it is quite significant for china. the green light would mean potentially billions of capital coming into the economy. it goes toward the picture of the economy opening up a modernizing and taking down borders and allowing capital to flow freely. they want to the currency to be internationalized and use of reserve. it will be quite symbolic a sign of its advancement and step forward. for sure, i do not believe so many feel the shanghai meets the capital given the red hot values. jonathan: enda curran great to have you with us. let's b

also, how can pboc improve their guidance?y got a little fudge at the udged at thetle f end of last week. legend holdings will make its trading debut in hong kong later this morning. it raised around $1.8 billion in its share offering. 38% stake in lenovo, among other holdings. at the end of last year, it had $47 billion in assets. the crisis over faulty airbags is weighing on honda. down about 7% because of the cost of recall. operating profit at about $5 billion, but honda did maintain its forecast for this year. it has confirmed an eighth fatality in the honda equipped with a to cut airbag -- with a takata airbag. morning in2% this trading. the failed partnership between suzuki and volkswagen could be coming to an end after a four-year effort to sever the arrangement. force is attempting to volkswagen to sell back the state. -- stake. relations soured between them after suzuki agreed to purchase engines from a rival. the company is embarrassed by the long-running arbitration. up next, a major step towards getting up and run

angie: but after pboc cuts and easing?ikio: the cuts do help but i doubt whether they will solve any of these more structural problems that the chinese economy has that quickly. the cuts just happened recently. if you look at the real interest rate in china, it is actually very high. if you compare it to >> happening globally it is all about the real interest rate. it is around zero in the u.s. now, and that is with the tightening now, the end of qe. it is deeply negative in essentially all other economies. policymakers the value money in order to force people to do something with it. the situation in china is very far away from that. i don't think you will see that that quickly in the macroeconomic data. you see it in the stock market of course. you see it in parts of the financial system. but probably not that quickly in the macroeconomic data. rishaad: it is interesting when you look at what has happened with the stock market. it has got to go wrong at some point. when it does, it is going to be pretty nasty. angie: the

up next, pboc cutting rates. says that this year would be a pivotal one for the global economy. still up in the air which way we are pivoting. ♪ rishaad: we're back with a breaking news story. in official now bear market territory. it started off very positive this morning but then suddenly the whole thing with the other way. on. is what we have going quest stories making headlines around the world. the sri lankan president took office in january but parliament remains largely loyal to his present -- to his predecessor. the president wants parliamentary support during this, the final stages of sri lanka's civil war. the plane attempted to fly around the world powered only by the sun is sent off of its most dangerous mission yet. solar impulse left nagoya heading for hawaii earlier this morning. to divertwas forced to japan after leaving china on june 1. the leg to hawaii is the riskiest because there is no way to land. tunisia has launched a .ationwide hunt for suspects at least 38 people died in what is tunisia's worst ever such attack. the killer has been identified as a 24-ye

every time we see the pboc, the bounce has been a less and less.ounce in the economy has been less and less. at this point,y any further cuts is pretty much short-term and somewhat full-ish, do you agree -- foolish and do you agree? patrick chovanec; li has said the solution for chinese's economy is not more stimulus, it is reform. i agree. ,ore stimulus without reform more money pumped into the chinese economy simply goes in the wrong direction to speculation whether in real estate or stocks. out evend a building more overcapacity and that is the problem. some options that the pboc could do considering suspending ipo's and stabilize the market, ease -- stamp duties and cut lending rates. what are your take on these things of the toolbox that couplet -- could potentially be taken out? as they allanec: create problems. the holy grail of chinese macroeconomics is targeted stimulus. this time it will be different. it would not go all in the wrong direction. i should is your first question which is how low can it go? i said 50% drop. there is a histori

by all accounts, think there is a sense the pboc might come off the sidelines.tools will they use? will they have an interest rate cut option? ratioould use the reserve to encourage banks to lend a or there might be targeted measures , including getting liquidity into the system. by all accounts, data tomorrow is vital. credit aggregates over the coming days, also key. by the weekend, we will have a better sense as to whether the pboc will indeed come off the sidelines, take more action to stimulate china's economy. that's the read through on these inflation numbers. what about the overall economy? how are people seeing that? is there any improvement? enda: at the margins, there are some signs of stabilization, and perhaps on the pmi side of things. for real estate prices, too, some analysts suggest we have passed the worst. yesterday, i hand of stabilization. all told, the story remains one of a quite tepid outlook for china's economy. there is in that sign of a major take off just yet. rishaad: i guess reaction to all of this can be summed up in one word, and

do you think the pboc still has a sense of control? we have four rate cuts in the space of a couple of months. they don't seem to be helping but the market is still down. >> absolutely, yes. we're at a point where it's possible that there's panic so the bear market becomes self-fulfilling. it's important to recognize there's a short-term and long-term here. in the short-term this stock market debubbling we're seeing in china is a byproduct of the reforms reforms taking place there. of course that will have an effect on capital market evaluations at home. from a longer term perspective there's a big risk reconverging of the chinese growth story and that is that china will move from being a major surplus company to an account deficit country as it exports capital to the rest of the world. the fact that we're already seeing such controls at home and despite tefrtshe efforts taking mace it will increase and that is a big game changer in terms of china's impact on level capital markets going forward i think. >> china a far more important co

going forward is it what some people are calling the people -- pboc put? >> the expectation was that the government would back it from all manner of reason to debt strapped companies but others said that the pboc does not want to be drawn into this. they have been trying to step up reforms of the economy and they don't want to repeat the error of 2008 when they dumped huge amounts of money into the economy that led to the huge explosion of debt. people did link it and we had a 7.5 -- 7.5% plunge on friday. whether this was linked or not has not been seen. not sufficient and the sense of panic we have been seeing in shanghai and shenzhen as well. jon: thank you very much. back with morgan stanley's global head of ethics strategy. hans, when you look at the situation in china, have they cut rates because of the equity market? can you link those two? guest: i think that the authorities look primarily into the economy. they gave the signal earlier this year that they wanted to have a higher stock market and that could encourage consumer credit a man. when you

now the pboc lowered both gdp uninflation forecasts for the second largest economy. this further fuelling expectation haas the central bank will step in for more easing. they cited increased downward pressure on growth for the moves. >> meanwhile the msci said it would hold off on adding chinese equities to its index until a number of outstanding issues are revolved. they're expecting the addition of chinese shares to give the market a $400 billion boost. now switching focus to alibaba, founder and chairman jack ma is on a charm offensive in the u.s. this week. he spoke tuesday predicting the chinese e-commerce giant will pass walmart in sales this year but he says alibaba is not seeking to invade america by taking on amazon and ebay. >> my purpose coming here that we need more american products to china. we have hungry 100 million people coming to buy every day. so this is why we come here. we do not come here to compete. we come here to bring the small business. >> jack ma spoke about the blockbuster ipo. he said if i had another life i would keep my company privat

the pboc injected $5.6 billion into the banking system. it lowered the lending rates.hat comes after a interest rate hike. chinese stocks that have -- shanghai composite index. manus: diplomats meeting saying -- missing a self-imposed deadline. european officials claim progress is being made. a path to a conference of agreement is to come within days. francine: uber managers are in custody in france after taxi drivers staged violent protest. the companies general manager is being questioned by police. courts have consistently refused to block its business. the president says uber must be dismantled and declared illegal. manus: the stocks today offering after a three month free trial. nine dollars 99 a month -- $9.99 a month. the tech giant going head-to-head. francine: 10:00, we get the figures. we get those as they cross the terminal. we'll be talking to the u.s. chairman, axel weber. -- the ubs chairman, axel weber. manus: make sure you stay tuned for all of that, right here on the pulse. ♪ ♪ francine: welcome back on the pulse here it. manus: bloomberg view comments

pboc,ntral government and expected to stem this decline even with target intervention and interest rate cuts. many in the market say that is the likely scenario given that it will take some time for monetary policy and fiscal policy changes to coincide with stock market stabilization. one of the key challenges is the underlying economic growth is not there. you had this big run-up. you can see a significant dislocation. , the pbocother things and the central bank governor could do to save the market -- stabilize the market is he could halt initial public offerings and encourage insurers to buy shares. he could basically cut off the taps to the ordinary investors who have run up the market and you could cut lending rates outright. our economists at bloomberg predict that is what they will likely do. expect theonomists central bank to take another rate cut but it may not come as soon as some would like to see happen. rishaad: a look at that story later on in the program. do tweet us your thoughts. roundup.n with the and a clock is ticking negotiator has left talks in vienna. say sharif ha

the corridors here, he said he expects at least one more 25 basis points interest-rate cut from the pboc by the end of this month. that means within the next week another interest-rate cut is coming carry we are not out of the woods yet but at least things are indicating that we have reached the bottom of this current slowdown. we will have to wait and see. yvonne: thank you steve. let's get the market update from david now. trading havento you seen any reaction to those numbers? david: we are about 30 minutes. that is just the start. it has been fairly volatile. out for outstanding margin .ebt and how it plays out that is what is happening with shanghai markets right now. which is a very good day to be honest. volumes are a little bit less. -- nikkei was up three days since friday. we are basically looking at the best three-day gain here this year. the index is up 1%. 160%. we will figure out why it is moving the way it is. we will get you more details on that in just a minute. australia is up 1.2%. everything. . -- every single stock. it is a good day in southeast asia. malaysia and si

survey also showed job cuts were the sharpest in more than six years and many economists expect that pbocinue their easing cycle. olivia: for a look at what is happening in the u.s., i want to get to matt miller for the big stories of the market day. matt: not a lot of movement if you look at the major averages. the has not been all day. the s&p pretty much unchanged at 21.21. 121. take a look at my screen. you can see my imap. it breaks down the s&p into different industrial sectors and shows you a deeper red for bigger losers at a brighter green for bigger winners. this bright green pie slice here , i will click into that and you will see this is diversified telecoms. not a lot of companies on the s&p 500. only four and two of them have huge weightings. it is cool. you can get a breakdown. at&t is one of them, verizon is the other big one. the other are so small that they do not have an effect on the move. at&t is having a great day today. the best price we've seen in seven because if has got two analyst upgrades. ubs and barclays say it will close its directv purchase for $48 billion a

. >> i would say that the pboc have not fully cap did that deleveraging is not possible.re every thing that they do is relatively small in nature. for example should chinese interest rates be a zero? absolutely. should the reserve requirements be a 5%? absolutely. should you have a more forceful fiscal policy? absolutely. what they are doing, they are not fully at something that there is no way out. you have to continue whatever it is. one of the reports that we contact -- compared them to was donkey crossing the law for flow in the shrek movie -- just don't look down. just keep going. i would go beyond that, anyone repaying those debts should be imprisoned for criminal offenses. you need to continue leveraging. i don't think it is the method. i think we are getting there. one of the things that could have been more on saturday than what they have -- apart from greece i think they are too timid right now. >> the donkey says don't look down, but we talked about what was ahead. greek banks, finance ministers -- how big of a deal is it to open the banks? >> there are two sol

the pboc and they have done this before could act possibly this evening, possibly over the weekend. it could cut the rrr and that could help the market early next week. we may also see the major banks. that may prop the market up but a huge reaction here in the market. let me paint context on this very quickly. this is the worst one day loss for the mainland market since january 19th. it's the worse loss in almost seven years. so the meltdown in china equities filtering through to other corners of the market including the hang seng and elsewhere in the region we have greece and the deadlock talks between athens and it's creditors. other markets stumbling too. that's where we stand. back to you. >> thank you so much. we'll discuss more. we're off about 18% since it's 7 year peak this time two weeks ago. it's a pretty good-bying opportunity, isn't it? >> i don't know about that. you to look at how far it has risen. i'm not an equity strategist but the valuations look rather optimistic and there's an awful lot going on. pushing and pulling in both directions so margin trading is one. r

and the world remains stimulative in terms of the monetary easing out of the ecb, the boj, pboc.. now let's go to the charts last but not least. keep it simple. the purple line, that's the 150-day moving average. with the exception of that october correction which took down's 9% last fall. you can see we've held the 150-day for a remarkable 2 1/2 years. i think form holds here and once again we hold that 150 day. it comes in around 2070. that's a little too close for comfort. however, absent a break below that level that holds for some meaningful period of time keep in mind this correction was over before it started. you want to be a buyer of the s&p on this weakness. now, one group we remain neutral on, s&p energy, the xle. that's your etf. 27%. the big boys chevron and exxon, those are the names, the big integrateds we want to be underquaetweight. and look at this chart. clear to see why. down 8% from the may high. the s&p flat during that period. this is stark underperformance. you want to be out of stocks that are underperforming. very well-defined trading range in here, belo

the pboc cut interest rates and the rrr as well. reaction was very very muted. we saw in the morning session the shanghai comp up by 2%. down by 7%. cut some of those losses still deeply negative. so the fact that the market failed to respond to the stimulus and the easing tells me that this is a market that is broken. one wonders what kind of complexion that data will be and whether it will validate the move by the pboc. that's the big risk event for these markets. otherwise a very negative day. wholesale risk aversion. down the greece and the fact that the debt talks collapsed and this is going to be the narrative as we get closer to that referendum in greece on sunday. back to you now. >> thank you, sri. >> joining us chief investment strategists and i continue to say there's two things to discuss. number one is whether there really is a grexit or default and number two whether it really effects the economic situation in other countries and specifically the united states. i don't think we know either one. number one is this like the same stuff that they're do

is stabilizing after a few interest-rate cuts from the pboc and targeted stimulus.last few minutes, the hse see pmi final reading for may came in, in line with the flash number about 10 days ago at 49.2. still in contraction, the -- below 50 but better than april. i might add, services is making 47% of the economy. we have the nonmanufacturing tmi which includes construction out for may. it came in at 53.2, below the previous month, still robust. to go back into the data, that is the lowest services pmi reading since december 12 -- december 2008. perhaps because of the weakness in construction. back to you. program we want your opinion. tweet us your thoughts. , debt repayments loom for greece. the prime minister is not backing down. he has gone on the offensive, attacking creditors for what he calls absurd proposals. one deadline has been missed and more are coming as money, greece has to pay to the ims. the government has said that by sunday, they will have an agreement with creditors. that didn't happen. this month, they have to pay 1.7 8 million -- 1.7 8 billion

the second take filler is the -- big filler is the liquidity from pboc.ermined to deliver 7.5% growth, they have to deliver growth but not inflate the bubble. vonnie: is the state happy with this? valuation increases help state owned companies. anastasia: there's the wealth effect helping the economy. the chinese government is careful not to inflate the bubble. the way to do this is to back regulations. tom: what is happening on trading desks? i think they can trade for fullface and credit. what do they do for a taiwan? is it like the old days? pick up the phone, hello, are you there? anastasia: it still is very much on a negotiated basis. tom: it is still somebody going hello. brendan: what are you doing? vonnie: using a tin can. tom: it is really important. when market gives away equity or bonds, there's always a seller. there's got to be somebody on the other side of the trade. where are the bond buyers? anastasia: bond buyers are not there. the bond buyers do not step in overnight. they are insurance companies, pension funds excited about higher yield

a lot of people were skeptical about the stimulus measures from the pboc and the authorities there hadn'teen having much of an effect. but it was in april when they changed theires stance from being concerned about credit growth to being concerned about demand. with that cut interbank rate, the government has rolled out projects and solved funding problems. they are starting to worry about demand and hopefully, that will stabilize things of the coming months. it is not a repeat of 2008 when they ramped up lending growth across the economy. we will not see that. angie: no doubt. japan, first quarter gdp revisions, what you think? will be be better-than-expected? daniel: it looks like they will be. the numbers look like the investment grow by 1%. that will push gdp growth up. is, this is information on how the economy is doing one or two months ago. since then, the numbers suggest the economy has slowed again in quarter two. the industrial production figures from may, as well as forecast for the next couple months, suggest that if anything, gdp may have contracted slightly in the we can't b

china and the pboc taking action.want to boost the economy and the want to manage to some extent the use of margin trading to trade stocks. how worried are you about these roller coaster moves we see in shanghai? does this look controllable to you? guest: we think so. if you look at china the economy is slowing down which is on one side a good thing. china is a big economy and the only way they can continue to grow like that is through heavy investment. but at the same time you need to monitor that without collapse and i think the chinese authorities have been quite effective in doing that. obviously the market sometimes goes from one side to the next. initially they thought the chinese authorities had done a great job. another had started to worry whether the ecb will be as effective as they thought. so some volatility is not unusual. anna: the shanghai composite possibly heading for the biggest gains the since 2009. what is your overall perspective? we try to do just minute by minute. the latest news. you are urging

wei yao: i think the pboc could do more and cut interest rates but the more important thing is actuallyow to generate credit demand and an investment demand and consumption demand. it means it is the fiscal side more. over the past few weeks, web send the government is somewhat and adjusting the pace and allowing local governments to borrow a bit more for infrastructure projects. that is much more critical right now that monetary policy and like cutting the consumption tax and it will all help. i think the degree of help and recovery what not be that great. francine: over ball, should investors just be confident that whatever is going on in china, the regulators have a pretty firm handle of what is going on? bankruptcy orchestrated to be seen in the economy or something more sinister? wei yao: umm, i think we always have to be a bit more careful about this kind of complacency. the idea of all of the reform going on is about the government letting go control of the economy, especially stabilization. the most difficult thing which the government is trying to do is allow bad things to happ

we saw that with the pboc over the weekend. their rate cut didn't have a big impact on the chinese equity markets. we're still seeing a roller coaster ride. the ecb can't do much about bond volatility and we're seeing a messy situation in greece. do you think they will be increasingly powerless? >> they still have sway and the amount of assets they're able to repurchase is huge and they're able to keep printing money when inflation is still an issue. however you do have the lower bond yields are the higher the potential volatility from a small change in yields. that's something that will lead to high volatility going forward. >> quickly, what's the top sector pick within europe given the picture you panlted for us? >> you probably want to stay away. it's more important what you stay away from and you probably don't get too involved in the banks. they have some negative correlation toward rising bond yields. some areas will be more dependable since they're more currency sensitive. >> great stuff. thank you. we'll pick it up with

flash data showing some improvement but not as much as we are expecting but it's the hope of further pbocank intervention sending investors into chinese stocks despite a volatile couple of days of trade in china. closing up by 2%. >> thank you very much. let's talk corporate news. blackberry reports physical q-1 results before the bell with analysts waiting to see how the company's classic device failed on the front. the targets for the software business are in focus with some experts suggesting blackberry's new strategy should move away from the struggling unit. share versus fallen 6% over the last 12 months. joining us to discuss this further is the managing director at cm research. good morning to you. very good to see you as ever. let's kick off with blackberry in terms of the hand set part of the business. the fact that all eyes are on a phone described as classic tells the story. they are a long way behind the innovation curb these days. >> they have lost a lot. let's see what the business is today and where it's going tomorrow. what it is is a hardware business, a services business