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00:00YOU'RE HAPPY TO HOLD SOME OF THOSE OIL SERVICES NAMES. EUROPE. GABRIEL STEIN TALKS ABOUT MONEY SUPPLY ON MONDAY. GIVE US THE BULL CASE FOR EUROPE. MANISH: WE SAW THE LENDING NUMBERS COME OUT YESTERDAY. VERY GOOD. YOU ARE SEEING THE LENDING TO NONFINANCIAL COMPANIES, THE REAL ECONOMY, HAS GONE UP TO 11 BILLION IN FEBRUARY NUMBERS. THIS IS A VERY STRONG NUMBER. THERE IS VOLATILITY, BUT IF YOU ROLL OUT A VOLATILITY AND TAKE THE AVERAGE, THERE IS A STRONG NUMBER SINCE MANY YEARS. VC MONEY BEING LENT TO THE REAL ECONOMY. ON THE FLIP SIDE, YOU SEE THAT ARE USED TO HOLDING THESE FREE ASSETS IS COVERED BONDS, ARE AT A NEGATIVE NUMBER. CAROLINE: BUT IS IT THE RIGHT PARTS OF THE REAL ECONOMY? ARE WE GETTING ACCESS IN CASH? ONCE AGAIN, THE BIG, STRONG, SAFE CORPORATE -- MANISH: I THINK WE WILL LOOK BEYOND THE NUMBERS AND SEE IF THAT IS THE CASE. WHEN YOU LOOK AT MONEY SUPPLY AND MONEY VELOCITY -- [INDISCERNIBLE] WE HAVE NOT SEEN THIS BEFORE. THERE IS A NEGATIVE NUMBER. NOW WE ARE SEEING A POSITIVE NUMBER. I'LL GO AHEAD AND MAKE A POINT THAT IF THE INFLATION NUMBER PICKS UP GREATER THAN IT -- QUICKER THAN EXPECTED -- MANUS: ARE YOU DO GOING TO KILL OFF EVERYBODY'S HOPE? THAT IS LIKE A DEATH KNELL. CAROLINE: WE ARE HEARING THAT MORE AND MORE. MANUS: IF THINGS PICK UP, THEY WILL NOT GO THE FULL QUARTER OF Q.E. M ANISH: IF IT DOES, WE WILL THINK ABOUT WHETHER THEY WANT TO RUN THE ONE TRILLION NEXT YEAR. MANUS: IF THEY STEP BACK -- MANISH: IT IS TOO EARLY. MANUS: YOU HAVE LIT A FIRE APPEARED AMERICAN EQUITY MARKETS ARE SHAKEN TO THE CORE OVER, THEY ARE ALMOST BREAKING OUT IN SWEAT OVER A 50 BASIS POINT HIKE. P IMAGINE WHAT KIND OF A TAILSPIN EQUITIES AND HAVE THEY DID NOT RUN THE FULL COURSE -- CAN YOU.IMAGINE . MANISH: THE NARRATIVE IS STILL THE SAME. SEMANTICS HAS NOT CHANGED. IF YOU DO NOT HAVE A SUSTAINED INFLATION, THE BASIS IS GOING TO GO OUT. IT IS SEMANTICS. THE NARRATIVE HAS STAYED THE SAME. SINCE LAST YEAR, I AM A BELIEVER THAT THE RAISE IN RATES IS COMING IN SEPTEMBER. 25 ACES POINT IN THE U.S. IT WILL BE LOW AND STEADY IT IS NOT GOING TO SPOOK THE MARKET. COMING BACK TO VALUATION, PEOPLE TALK ABOUT IT.LENSES THAT WE ARE TALKING ABOUT THE RISK IS VERY HIGH. IF YOU LOOK AT THE YIELD ON STOCKS, THE 10-YEAR GERMAN FINANCE, THERE IS NO HUGE GAP. YOU CAN SAY IT IS BECAUSE OF Q.E. THAT YOU CAN ALSO ARGUE AND SAY THAT THE RATES ARE NOT GOING TO GO UP. THERE IS A CASE FOR LONG EQUITIES. CAROLINE: WHICH EQUITIES? MANISH: I'M UNDERWEIGHT IN THE U.S. AND UNDERWEIGHT IN EUROPE. EQUAL WEIGHT IN JAPAN. IN THE U.S., SINCE 2009 IT IS THE FIRST TIME WE HAVE SEEN A BAD START. IT IS UNDERSTANDABLE IF YOU HAVE A STRONG DOLLAR THAT SHOULD WEIGH ON EARNINGS. WHEN YOU HAVE EUROPE AND JAPAN TO MAKE YOUR RETURNS FROM, EVEN STARTING FROM A LOW BASE, THEN THE FLOW IS GOING TO SHIFT. WE ARE NOT SEEING A BEARISH U. S. ECONOMY. STILL GROWING AT 1.7%. IF YOU LOOK IN SPAIN, SPAIN GREW AT 1.4% LAST YEAR. THEY ARE GOING TO GROW AT 2.4%. EUROPE HAS A POSITIVE CASE TO BE MADE -- NOT LEAST BECAUSE YOU ARE STARTING FROM A LOW BASE. FOR THE FIRST TIME SINCE 2011, WE ARE SEEING MORE OF WORD RAISES IN EARNINGS THAN DOWNWARD. CONSUMER DISCRETIONARY BIG PART. HAVE TO GO INTO THAT. IF YOU WANT TO SEEK SAFETY, GOING TO HEALTH CARE. IT GIVES YOU THE EARNEST. AND FINANCIALS TIME AND AGAIN, WE TALK ABOUT VALUATIONS LOW. GIVEN THAT FINANCES ARE BEING USED BY -- LIKE AN ATM BY GOVERNMENTS TO RAISE MONEY. THAT ASPECT IS STILL -- TAXES AND LITIGATION. YOU HAVE GOT TO KEEP CARE. MANUS: YOU HAVE JUST ADDED IN LITIGATION. WHO ARE THE MOST LITIGIOUS? MANISH: IN THE U.S., WE SAW CITIBANK AND BANK OF AMERICA. HERE WE HAVE BARCLAYS. FOR ME, THERE IS ONLY ONE PERIPHERAL BANK WHICH I HOLD WHICH IS SAO PAULO, WHICH HAS DONE VERY WELL. I HOLD BARCLAYS. BUT THEN YOU HAVE TO UNDERSTAND THAT THE REAL ECONOMY PICKS UP, BANKS WILL BE THE BENEFICIARY. MANUS: GREAT TO HAVE YOU WITH US. YOU LIT A BIT OF A TORCH FOR CAROLINE AND MYSELF.

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ECB May End Quantitative Easing Early: Singh

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