It adds to the impact on confidence from all the tariffs and it is very muddy. We do not know if talks will happen between the u. S. And china. Both sides seem to be happy to keep it that way. We are off our lows. Oil companies, retailers, you name it, a gamut of companies is lower today. Have happened doesnt Companies Higher and barely higher at that. Moneyar yield flowing into treasuries. Index is shaving off some of the strength. 99. L above the pmike a look at data, the manufacturing isn data we got this morning. The u. S. Joining peers, the u. S. Is the white line and it is incorporating the latest data. You can see it joining all the rest of those countries with the exception of greece. Greece is doing well but germany is the worst performer. And coming in just above the u. S. Is china. Just a little bleaker today. It is certainly turning in that director and, the manufacturing side getting worse and worse. Attention to what is happening here in westminster in london. The british Prime Minister Boris Johnson setting the stage it seems for a general election. Later on we will get a motion than potentially a vote on mps taking control of the agenda tomorrow and forcing the Prime Minister to go back to brussels and seek an extension for brexit. He said he will not do that. He is likely to call a general election if he can get it through the house of commons. Where does that leave us, the markets or british politics . Us is the ubs Wealth Management had for the u. K. Huawei geoffrey yu. Staying away from sterling for the time being. Difficult to go below where we are at this point. Getting some certain tv of the no deal or some longterm extension, if that can be accelerated vonnie guy how would you treat the general election . We know in 2017 where the poll started and ended. I could not offer i guess at this point. I am hoping a general election can deliver some form of certainty whatever that may be. Vonnie how extreme is this positioning right now . Theaw fluctuations around 120 mark for sterling and we have the dollar index above 99. The sentiment right now is still very fragile. The u. K. And the globe were all exposed. In the last two or three years the world is doing well. Weak and globally is the u. K. Is not benefiting from that. How is the bank of england watching proceedings in Parliament Today . Is this week a very decisive are we stillxit or waiting for october 30 fourth before we see real positioning change . The boe will try to stay out of the politics as much as possible. They will try to gauge whether this can deliver some form of certainty. The risk for the bank of england is no matter what happens to brexit it does not do enough. The ecb is expected to move on a big package this week. The fed is expected to cut quite quite aggressively. The u. K. Could be exposed. We saw that in the manufacturing data this week. A further extension in the process, further ambiguity and uncertainty is only likely to increase and from industry. How much worse does the data have to get before the bank of england takes action . Look at the fed they moved towards uninsurance cuts and they are claiming more needs to be done. The one thing that has held up u. K. Data is the labor market. If the labor market shows any sign of deterioration are your clients thinking about moving assets as a result of the possibility of a Jeremy Corbyn Labour Party Government . There are conversations but no. The vast majority of conversation has been valuation and looking where the Property Market is for commercial and residential. Elementainty surrounding the relationship of the European Union and future government policy all factors into the equation. If you are macron or merkel, are you watching what is happening in britain more closely than what is happening in the u. S. Or china or are they both important or detrimental to your economys help . I think both. Given how our clients are , you are more exposed to the global environment. Balance, the question is where does the trade war go . They are casting an eye on , not exactly in a political sense. The most important thing is where the u. S. Economy goes and where trade relations go. Vonnie President Trump talking for a regimeential change or an administration change in 2020 and how that could impact negotiations. Does that give you cause in the that it is looking like we will not have a deal before 2020 . Always a risk, he knows that. Anything that prolongs uncertainty is not taken well by markets. No matter the decision clients are facing on the political side they want a degree of certainty inther it is in the u. S the u. K. Or on trade. Sometimes it is better to have something decisive where we know the decision. At least with a no deal brexit we know where we stand. You get certainty even if it is bad certainty. Geoffrey yu joining us from the u. S. Us on ther is joining phone, good afternoon. If they call a general election how big a risk are they running . Putting aside the risk, the risky faces is not insubstantial but equally his prospects are quite good as well. The polls due very to some degree. They may not be entirely right. Is rage, Boris Johnson labor is in a dire position. N a relatively strong atition, democrats running 19 and they only had 8 two years ago. Though supportal has been declining in recent weeks to the advantage of the conservatives. The brexit party has 12 . Against that backdrop if you assume that the geography proves to be the same it was in 2017 you discover that basically such , Boris Johnson might get 326 seats but not much more. A 50 chance at the moment. They are Holding Elections this that willtober and rest on the outcome of the battle between Boris Johnson,. Igel farage after october 31 if Boris Johnson has delivered this side of october 31 Boris Johnson will have to convince more voters that he would actually deliver. Nigel farage will respond with two comments. One is, this is the second time the conservative party has asked for people to vote to deliver brexit. It did not work last time so why should it work this time . Nigel farage wants us to leave without a deal. That ishnsons tune is simply something im using to pressure the European Union into striking a more acceptable deal. I suspect the brexit party would contest the election on october the 14th. Whether or not Boris Johnson can persuade purse way those who would support the brexit party is crucial to his hopes yourvonnie what guy same Boris Johnson would need to fight an election before october 31 on a hard exit ticket if he was in any way to have a decent chance of success. It certainly needs to be a hard brexit ticket. It also needs to be a ticket that convinces leave the voters it will actually happen. Ariseher issue that will inside the conservative party they were voting against the deal. Threateningrs are to rebel in order to try to stop no deal. That is another reason why you cannot assume. He hasohnsons effectively given up on remain voters. They will keep them on board. He has been winning over leave voters. Of the voters for leave said they would join the conservative party. There are more that would vote for the brexit are we assuming that litigation has no impact here . The idea that there are cases in court in britain that the move to suspend parliament is unconstitutional. Do any of them have legs . Curtice a case that is being heard in edinburgh today has been a source of embarrassment for the government because the government has been forced to reveal that the idea was floated and accepted by the Prime Minister in midaugust but he was still denying sometime thereafter that he was willing to go down that path. I am not a constitutional lawyer. Prove that the advice for five weeks was unreasonable it is very difficult. In any event some of these cases have been taken. At the end of the day if Boris Johnson does put down emotions before the house of commons and was able to win it because the osition voted for it vonnie politics Professor John curtice. Lets check markets. The british pound trading at 120. 9 right now. It was below 120 earlier in the session. The dollar Index Holding at 99. Major indices are mostly positive. Of the major groups in the s p are lower today. This is the european close on bloomberg markets. Vonnie in new york i am vonnie quinn. Lets check on the first word news. The u. S. East coast from florida to the racing for Hurricane Dorian. To storm has been downgraded a category two but wins close to 107 miles per hour. Dorian has started to move towards the northwest and that is neat close to florida for tomorrow. The death toll rising from a dive boat fire off the coast of southern california. As many as 25 people were killed and five are still missing. Some were saved by jumping into an inflatable raft. The fire broke out wall 34 people below the top deck. President trump telling china it is better to get a trade deal done before the 2020 election. He says the u. S. Is doing well in negotiations with china but gave no specifics. On air and on tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. Vonnie lets get a check of global markets. A risk off tone. Take a look at the indexes here. 500 down about 9 10 of 1 or more. Industrialbased index the down half of 1 . Sliding,markets continued concerns around trade, uncertainty and macro concerns around the economy. That has caused the 10 year yield to slide. We have a rally for bonds. The 10 year yield down seven basis points. That came out when the ism manufacturing data came in, missing the mark. Telling us the economy is contracting, the first time we have seen that since 2016. On the bloomberg you can see the u. S. Is joining other regions in the world. Industrial pmis for germany, the eurozone and china in blue, yellow and purple. Here we have the u. S. Again dropping below. Greece is still expanding at 54. 9. Finally, joining the risk off parade and commodity complex if we take a look at the bloomberg Commodity Index you can see these commodities are sliding. To ff guy still with us is ubs u. K. Investment head geoffrey yu. The fed is watching what is happening, clearly powell has shifted the narrative. Of thea shows evidence effects of the trade war on the u. S. Economy. How much more aggressive will the fed be if those kinds of consistently point to the fact that the Manufacturing Sector is slowing down and at some point that will bleed into consumers . Starting to think about pulling their funds the u. S. Is relying on domestic consumption as well as the labor market can underpin. It does not mean it is. The labor market can underpin consumption but there is no need to intensify the Downside Risk so banks should not do that. We have to follow the global environment. [indiscernible] that has been talked about for two or three weeks. I think that narrative will come back. Vonnie what does this mean for investors . Investors can only be disappointed at this point. Go full on on the quantitive side but for many it will never be enough. You will never have enough to upset the lack of a physical impulse. Should we shift away from the ecb . Using her ability and her contacts to get the government to move especially in germany. There is talk in germany of fiscal stimulus. For the sake of europe we need yield curves steepening. Hopefully it can be done in a way for all of europe. It is about what the ecb can influence. Guy thank you for joining us at westminster. This is bloomberg. Vonnie checking u. S. Markets. A handful of Companies Higher in the dow. Ism manufacturing data came in at 49. 1. Economists wanted 51. 3 so that was a disappointment. Down p 500 holding but 8 10 of 1 . The vix is above 20. European markets were open yesterday and we priced in some of the negative trade news. They headline, indices down. 3 10, hortense, 5 10 of 1 . This is certainly upsetting people once again. Then you have the brexit story as well. That is a factor when it comes to the pound. The pound bouncing but having a turbulent session. More politics and brexit coming up over the next few days. Up next is the european close. This is bloomberg. From the couldnt be prouders to the wait did we just winners. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. Now you can share it between lines. Mix with unlimited, and switch it up at anytime so you only pay for what you need. Its a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you buy a new samsung note. Click, call or visit a store today. Vonnie stocks finishing up the day in european trading. Just seconds away from the close. Ecb member telling bloomberg in the last few moments he does not see any reason to resume bond buying. That is putting pressure on stocks. Generally a day in the red. Some countries more red than others. If you have a look at what is going on, the ftse 100 down. 3 . A lot going on in parliament but that session has been lower and continues. The dax in germany down. 4 . The cac 40 down. 6 . Lvmh are the worst performers in france. Situation, tariff the u. S. China tariff wars and what it might mean for luxuries. There has been pressure on btp as well as the italy 10 year yield at 87 basis points, up 10 points. A little bit of selling in italy. Carrying one of those stops, one of the more luxury stocks, the s p the stoxx 600 retail index is down. 6 . I want to point to starlight two sterling because to sterling, it was lower today. Following the defection of the mps from the tories to the liberal democrats, we saw starlight rise back sterling rise back toward the 1. 21 mark versus the u. S. Dollar. Lets have a look at what is happening in the rest of the world. 7. 1841. Yuan no end in sight to the warring words. The president on twitter this morning saying there was not a dateet talksetween the u. S. And china that were supposed to take place in september. Muddy as to whether they take place or not. The dollar index has eased but it is still above 99. The s p is holding these levels but not doing anything. At 1. 44 is the s p 500 on the 10 yield. Some of the stops showing weight in the doubt some of the stocks showing weight in the dow. Boeing down more than 3 . The S P Oil Index is also down the most in the s p 500. Lets dive deeper with Kristine Aquino in london and Senior Editor mike regan in new york. Kristine, let me begin with you. Sterling the big mover regarding currencies. What did the market decide when it came to moving sterling from 1. 19 to 1. 20 . Kristine it speaks to where markets lie, and that is between a rock and a hard place. Impetus tolot of price brexit negatively, but there is also the question of how much should they do at this point in time . There are a lot of unknowns as you can see. Several votes tonight in parliament continuing onto tomorrow. There are questions over whether there will be an election, what date will be the election, you can feel investors wanting to push the pound lower but also wanting to save their powder for a more compelling time to do it, as opposed to now, where you have a bunch of risks coming up and things could change in 48 hours. Vonnie the moves in markets we have seen related to britain have come for the pound, mike regan, let me ask you why we are seeing such weight in the u. S. . It is not just u. S. And china. Pmi the ism manufacturing coming in under 50, officially signaling a contraction in august. We did get a rate cut in july so it is a minder it is a reminder that loose Monetary Policy is not a cureall for the economy. We have to wait for this Economic Data to bottom out. Even if we are expecting another rate cut, it is not going to instantly turn this data around. Some of the components of that index were very alarming. The new orders dropping to 47. Deep into contraction territory, the lowest since 2012. The employment number is alarming, 47. 4. We have had this tension between a weakening manufacturing economy but a u. S. Consumer and labor market that seems to be holding firm. That employment element of the ism coming in that low is a bit alarming. Mike wilson at Morgan Stanley had a note today talking about jay powell. As the u. S. Profit outlook deteriorates, analysts looking at a 3 drop in thirdquarter profit, that was supposed to be when the rebound was going to begin in earnest earlier in the year. Everyone was expecting 10 growth in the third quarter. Now we are expecting a decline again. It is this dynamic between when will this weakness in profits and certain parts of the economy start to affect the consumer, start to affect the labor market . It looks like we could be getting closer to that. Vonnie it bears repeating that factory activity data we saw, it is the first time it has been in contraction territory in three years. And 2016 turned out to be a false alarm. We do not going to recession, but it was a week period for the economy. The oil market was weak, credit markets started getting nervous. It is hard to imagine this not recovering unless we do get some sort of closure on the trade deal. Based on everything we have read and all today, we are further and further apart. Uy talks to us about btps thehe end of last week, italy situation seemed volatile, now we are seeing some stability and that is reflected in btps. Kristine it has been a aabbing, the recovery in stabbing, the recovery in btps, where italy situation went from precarious to now looking stable. We are set to see a government form between the Unlikely Alliance between the Democratic Party and fivestar. They are resolving a lot of questions for italian investors over whether there will be new elections if italy fails to form a new government. It has been quite the recovery so i would say todays moves in btps, probably pressure relieving off of this longerterm rally we have seen over the three months, which coincides with the global bond rally as well. All in all, if you look at a year today for italian btp, it is quite astounding how much that sector of the market has rally. , thee mike regan president tweeting things will change in 2020 if he is in the administration. China will find it tougher. At the same time it is not clear the reason for the tweets. Was he trying to bring china back to the table, was he trying to threaten china . Mike he is trying to ramp up the pressure on china. That tweet try to play both sides of the street. It said negotiations are going great, but china will be in trouble if they track this out to his hypothetical second term. That does not add much clarity to the situation. That theit clearer negotiations are stalled now. It is in question whether the september meeting between the sides will even occur. There is no date set on the books. If you read the commentary in the state media in china, they do not sound like they are ready to give an inch. The commentary is very much it is time for the u. S. To back down. The huawei situation is certainly adding another wrinkle. Huawei accusing the u. S. Government of cyber disruption campaigns and harassing and intimidating their workers. As september starts, everyone talked about what a volatile month august was. As september starts it does not appear like there is any easing in the trade issue. It seems like it is worse than it has ever been. Vonnie the 15 duty went online sunday night. We anticipate the factory data only gets worse . Mike i would imagine so. Apple is down 2 today. This batch of tariffs hits things like the beats headphones. Not the iphone, not the bulk of apples business, that is still slated for december, but he is starting to chip away but you start to triple you start to chip away at some of the apple products and you notice a reaction in the stock market. Almost all of the chip makers are down. All but two of the stocks in the philadelphia index are down. All of the others vonnie all of the others down. Mike regan in new york and thanks to bloombergs Kristine Aquino in london. Lets check where european stocks have settled. We have the indices all lower across europe. The worst performers are the cac 40 in france, down almost. 5 , and the dax in germany, down. 3 ,. 4 . The ftse 100 ended up just often slows, down. 2 . This is bloomberg. Vonnie live from new york, i am vonnie quinn. This is the european close on bloomberg markets. Lets get the first word news with courtney donohoe. Courtney Hurricane Dorian is getting weaker. The storm is still bashing the bahamas. Hurricane. Egory 2 forecasters say the hurricane has begun inching toward the northwest and they say is likely to head up the u. S. East coast and could move dangerously close to the florida coastline. Iranian oil tanker pursued by the u. S. Has turned off its tractor near syria. That is leading to renewed speculation the vessel is headed to syria. The ship is carrying more than 2 Million Barrels of iranian crude worth 130 million. Officials believe iran is trying to hide where it is delivering the oil because of sanctions targeting irans energy industry. Hong kong democracy activist joshua wong is in taiwan urging people to hold their own demonstrations as they face growing pressure from china. Wong has been a central figure in hong kongs beijing antibeijing protest. Beijing has claimed suzerainty over taiwan since the 1940s. Italy facing another hurdle in its bid to set up a government and avoid an election. Members of the fivestar movement, one of the parties that support just a piquant bid to becontes Prime Minister only half of them vote. After a string of incidents, critics say the voting is not secure. Global news 24 hours a day, on air and tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. I am courtney donohoe. This is bloomberg. Vonnie thank you. Electric vehicle startup Faraday Future has named carsten bright felt as its new ceo. He spoke exclusively to bloombergs ed ludlow. The headcount is around 600 worldwide and we will have to build this up a bit. The top priority is fundraising. We will have to go to the capital market, we will have to show what we have. Years, if last two you heard about faraday, it was mainly about the challenges. If you come in, you have the chance to see it today, there so much substance that comes to technology and the product and the business. This we have to communicate and we have to make people understand this is the most advanced Startup Company of all of the new companies. You noted the issue of fundraising. What is the situation . How wellcapitalized is the company . What funds you need and where will you get them . Good question. We have to understand what is going on in the capital market. I built another Company Three years before. Ed we will talk about that. Carsten three years before. If you had a nice powerplant presentation, then you could get hundreds of millions, even billions of dollars. This has changed because the whole Investment Community understood this business is much more difficult than they thought before. It is a lot of money to invest heavy investment, it takes time to establish it and it takes time to return. There is a consolidation going on right now. At the end of the day, everyone is convinced the future will be electric and it is about digital ecosystems. Now it is about who will be the one in the race. Faraday is in the best positioning when it comes to the product, technology, and the business model. This is what we have to state. I am confident we can be successful because if you really communicate this and you make them understand, they will understand this is the number one. Is a veryou have good, almost finished preproduction car. The california plant is still being built. How much cash do you think you need at this early stage to get production . Date,n during the first during the first date, i do not want to mention a concrete number, but a three digit million amount is still missing. And to scale the volume and bring the next products to the market, the numbers even billet even bigger. Or 200 or even0, 1 billion, the most important thing is to get the trust of Capital Markets and investors and understand the company has a investors and understand the company has a great future. If we make this point, we can progress. This is where i see my value coming in. The company has a great vision. This company has great products. What it is missing is execution. Bring the product to the market as fast as possible and this is , he is am coming from coming from digital ecosystems, i am coming from the car industry, i know how to do cars and this conversation is perfect to make it happen. That was Faraday Future ceo carsten breifeld speaking to ed ludlow. Is in london to explain emma we saw the Company Close close to 4 lower as analyst weight in on european steelmakers as a whole. Bank of america saying they may look cheap, and we can see that in this chart. It is the white line. That is the stock price over the last couple of years. Analyst price targets is the blue line, and that has been falling. Bank of america worrying the company could be a value trap, saying demand is the bottom line and this is particularly true at the global coat as the global car market retrench is and we see chinese manufacturing decline. They are trying to unlock value good the ceo planning to sell or ipo its elevator business. We see the elevator is a big profit driver, considering to be the jewel in the crown, accounting for 17 of revenue, but that equates to 35 Morgan Stanley analyst were saying this is a good starting point, a good starting and the restructuring upside could be huge. Restructuring from the analyst saying there is high execution risk and they have concerns about the challenge with regulatory issues and the cash burn we are seeing. Finally, we heard from Credit Suisse today. They were looking at the european steelmakers as a whole. We are looking at them here and that is how they have been performing over the last year or 18 months or so. They are saying the steelmakers are in the last leg of a down cycle and the market is being overly negative. Still rank the company has underperformed, saying concerns about the Balance Sheet remains. Vonnie emma chandra there with the worst performer. The dax down 3. 8 today. Type your latest Bloomberg Business flash. Sale of hong kong retailer a as watson has been put on hold because of the twin pressures of brexit and the antigovernment protests in hong kong. It is singapore state company. State investment company. British retailer Marcus Spencer is said to be demoted from the ftse 100 after 35 years. Eligible ftse shareholders are ranked by market cap. Spencer had a business cap of less than a fourth of what it was in 1997. Coming up, it is our global battle of the charts. This is bloomberg. Here, it all starts with a simple. Hello hi how can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone [ camera clicking ] wifi up there . Ahhh. Sure, why not . Howd he get out . a camera might figure it out. That was easy glad i could help. At xfinity, were here to make life simple. Easy. Awesome. So come ask, shop, discover at your xfinity store today. Vonnie it is time for our global battle of the charts. You can see them on the bloomberg by running gtv. We have two battlers. We saw the president heralding a tougher stance on chinese trade, and that is not good news for deals. As you can see, crossborder ,ctivity is down 35 globally trapping at about 650 billion. Ceos are waiting to see how trade tensions, brexit, and a nationalist policies will play out. Right now we are heading for the worst year crossborder deals in this cycle. That is in terms of the volume. The number of deals has also plunged. ,eals in europe are down 40 and that is not difficult to imagine given brexit concerns. Inbound deals into the u. S. Are down 30 . The big question for bankers right now is how long this will last. Crossborder deals generate higher fees. There i am with a bit of bad news and you can see this chart on bloomberg at gtv. Vonnie way to sell yourself and your chart. She faces off against mike mcglone. Mike hate to have more bad news but my chart is stock market volatility. Here is the 200 day average of the vix cboe vix volatility index. The significance of what we are doing is recovering from the lowest level. What has happened since then, which was february of last year, is bond yields have collapsed, the fed has shifted from tightening to easing and commodities have collapsed except for gold. My fear is that this is going to continue higher, which is what it has done in the past. Becausei just moved you i have to get back into that position. This is a tough one. I do not feel qualified to judge this excellence. Ahmed is the winner. Mike, your chart was also amazing and your chart was phenomenal. Thanks to both of our battlers. Coming up, we have balance of power with david westin. He will talk trade and student loan reform with Mitch Daniels and the former governor of indiana. That is balance of power at the top of the hour. U. S. Markets are lower. Off our lows but still major indices are down a good. 7 or. 8 . This is bloomberg. David david from bloomberg World Headquarters in new york, im david westin. Welcome to balance of power, where the world of politics meets the world of business. On the brief today, therese rafael from london on todays spectacle of the british parliament. Michael mckee on the effects of the u. S. China trade dispute on manufacturing, and from boston, brian stolen on Hurricane Dorian. Therese, i watched some of what was going on in parliament. Have they done anything yet . Therese they have not voted yet, but this is a historic 72 hours. Parliament will be voting in a few hours on a piece of legislation that would force Boris Johnson to delay britains october 31 exit day rather than exit without a deal. Int is expected to pass and response to that, Boris Johnson is expected to try to trigger an early general election. The date that has been mooted
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