Sales and ism manufacturing data hits a decade low. We wait on fiat chryslers numbers. A two border solution . Boris johnson will present his brexit plane to the conservative Party Conference today and the eu with provisions for a timelimited irish backstop. Ireland called the deal a nonstarter. A race to the bottom. Shaking of the brokerage world. Good morning. Matt less than half hour away from the european open. Take a look at what happened yesterday. When that ism number came out, it really disappointed markets. Investors bought up treasuries, pushing the yield down. This is a threeday chart. We have recovered a little bit today. Moves a pretty substantial and you saw that in stocks as well. That negativity likely to carry through to european markets today if you look at the futures. You will see equity Index Futures across europe are down. Dax futures are off 0. 4 . Ftse futures are off more than 0. 5 . I will point out we are seeing gains in u. S. Futures still slight, but at least green arrows. You may see a recovery when u. S. Markets open up in seven hours time. What do you see on the gmm . A week picture. Keeping in mind the negativity we are expecting in europe, asia looks weak. Weakness in south korea. There is geopolitical nervousness we need to factor in. The Australian Market not showing up, but very much in negative territory. The Banking Sector very much in focus. It was that ism manufacturing number that added to the other news. Cut the markets imagination and started people thinking once again about the state of Global Growth and how quickly or otherwise we end up getting some kind of recessionary territory, may be the u. S. Or elsewhere. Interesting to see the ism nonmanufacturing number which is due out tomorrow. We will see whether that tells a different story or if it is just lagging behind manufacturing. That is something we are going to explore later. We mentioned the latest news around brexit. It seems Boris Johnson has a proposal he wants to set before conference later today. What will the eu make of it . The early signs for ireland are not positive. The risk down by 0. 3 . Cranfield, Bloomberg Markets life strategist, is with us from singapore. We talked a little bit about whats going on on the Global Growth story. Lets add to that today after this u. S. Ism number, waiting now for services, waiting for the jobs data to see how far plentyivity goes of already. We dont need much more in asia. A gloomy picture. It is a bit of a shock to people because american data on the whole had been holding up reasonably well in relation to the rest of the world. The fact manufacturing is weakening is not a surprise. If you have been following the jp morgan global pmi index, the has been in the ply decline all year even though the september number was a slight improvement. It has been below 50 for several months. What is a surprise as the u. S. Is catching up with the rest of the world. Just as bad. Thats what is really hurting asia. You see the classic markets, korea and singapore, usually right at the forefront of any disruption to global manufacturing, they would feel it quickly. Additionalhe situation where their inflation has gone into contraction as well. Not only is there no growth, they have also got deflation. You mentioned north korean missiles. A tough day over there. Nothing much we can tell you on the positive side. Certainly the data coming up later in the week would be very important for the u. S. In particular. People have been calling for more rate cuts in addition to the ones we have already had. It strikes me that the ism number feels like a turning point for sentiment about the u. S. Economy. What kind of reaction could be get to a very bad number on friday . Would a very good number make the markets feel better . Possibly we get a bit of relief. Could be as ism watershed not just for the United States, but also other major economies. There is another story running on the bloomberg today giving more details about some of the things germany may have in store. I suspect this kind of thing is, when you combine it with the german data, which is worse than the american data, this could be the turning point for fiscal stimulus across the globe. Countries which have been reluctant we have seen japan this week commit to more fiscal stimulus. Germany could be next. The United States may have to reconsider what they do. By the end of this year, we could be thinking Monetary Policy has gone as far as it can go. Anna an interesting story on the bloomberg today about whether the germans are doing fiscal stimulus by stealth, planning bigger measures behind the scenes. What about the question of the day . You have been asking, how worried are investors about a rerun of 2018 equities meltdown . I certainly remember the runup around that period being very nervous. What is the view of those who have responded on the markets live question of the day . A lot of weight is being put talks next week. When you had such a poor piece of data as the ism, so much rests on the trade talks. If we get a small agreement for the u. S. And china, that could make people feel better. If we dont, october could turn out to be a very ugly month for Global Markets. Last year it was probably the second worst month of the year for u. S. Market in general. Even starting very well. We desperately need good news from somewhere, and it could be those trade talks. If we get modest data, no progress on trade, october could turn out to be a very bad month. Matt thanks very much for joining us. Mark cranfield out of singapore. You can join the debate on todays question of the day. How worried are you about a rerun of 20s equities meltdown . Reach out to the team by typing ib tv on your bloomberg terminal. Lets get the Bloomberg News now. Johnson defending his new brexit play into the eu today. The usual warning, he is ready to leave without a deal. We have learneds offer includes a special customs arrangement for the Northern Irish border. The key is that would only last about four years. Ireland is already saying a timelimited backstop is a nonstarter. In the u. S. , more heat on President Trumps closest allies over the ukraine call. House democrats warning mike pompeo about possible charges after he blocked testimony from five state department officials. Lawmakers said pompeo appears to have an obvious conflict of interest because he listened in to the phone call. Hasit suisse chief thiam broken his silence over this buying probe. He praised the outcome, saying fully accountability has been taken. He described recent events as regrettable, adding mistakes have been made. Credit suisses order exonerated him. Dashboard Credit Suisses board exonerated him. Charles schwab slid 10 with some competitors tumbling as much as 26 . The move escalates a long simmering price more as investors move to cheaper products. Global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Anna breaking news across the bloomberg. Hill bank founder vernon is to step down as the chairman. This is a business that has been under fire for some time. It really adds to a trend in london this morning. A number of Senior Executives for different sectors stepping down. We also heard earlier from Standard Life aberdeen that Martin Gilbert will retire in 2020. That is looking a little into the future. We heard from Tesco Dave Lewis is going to be going in the summer of 2020. A walgreensnounced executive has been announced as the replacement. They also announced some numbers at tesco. Completing some of that turnaround. Dave lewis has decided to move away from that business. Later this week on bloomberg tv and radio, guy johnson will be speaking with the chicago fed president in madrid. You can catch that conversation after 7 30 a. M. Tomorrow. The oecdwill speak to secretarygeneral fresh out of a meeting with Angela Merkel this week. We will get his take on trade tensions and fiscal stimulus. Matt welcome back to Bloomberg Markets. This is the european open. We are 15 minutes away from the cash equities trade, still looking at red arrows across European Equity indexed interest after a rush day a rough day forecast trade in the u. S. Ray dalio says the Trump Administration may be inching toward bigger moves against china. The Bridgewater Associates cochairman wrote that limiting capital flows to china must be considered among the possibilities. Dalios comments follow a bloomberg scoop on the white an official saying there is no discussion of such measures at this time. Is the oecdow secretarygeneral. Thank you for coming in. Let me first ask you what you think about the possibility of financial decoupling. The u. S. Is not has not done Something Like this since japan in the late 1930s. It would be very bad. Not that it is possible at all. There has been integration of the financial markets. It will continue to advance, inevitably. I would hope this is not happening and that we will find engage and that the engagement will lead to a better outcome. Right now we are paying a very heavy price for the tensions. Already 1 less than a year ago in terms of our latest rejections. Projections of the world economy. We are at 2. 9 only a few days ago. Matt we have seen other economists agree with you. Ubs says now Global Growth is 2. 3 . That is a full percentage point less than i was at the beginning of the Third Quarter. Said theren at fitch can be few president s since the 1930s of Global Growth prospects being affected so significantly by trade policy disruption. The Trump Trade War is the most significant disruption for the Global Economic picture since the 1930s. Do you agree . The logic is impeccable. You invest to produce. You produce to sell. If you do not know if you are going to be able to sell, or at what tariff you are going to be able to sell, whether you are going to have access or not at all in a market, this is what you do. You hold back. Even though as a consumer, you are very cautious. The year after looks a little iffy. You are very conservative. You are very worried. You hold back. Times,y that 5 million 10 million times. Then you see the economy going down very fast. This is exactly what everybody is talking about. It seems to have caught up even with the mood in the United States. The United States was like the right spot before. The numbers you saw about manufacturing and the outlook obviously seemed to suggest it has already caught the contagion. Matt it does seem like a turning point in sentiment. Hasmanufacturing picture not been this bad since 2009 in the u. S. At the same time, it is widely agreed across the aisle in the u. S. That china does seem to change the way it does business need to change the way it does business. The whole purpose of the oecd, we believe there are a lot of issues that have to be dealt with and have to be negotiated, have to be fixed. About howon really is the engagement is organized. How it produces the best result. For example, we created a global forum on excess steel capacity. That is up and down. It was a forum for dialogue. Now we have to see whether we renew it, but that is a very good example. Ut of the g20 meeting how do we engage . How do we organize the conversation . Even the negotiation. How was your conversation with chancellor merkel . A lot of people are calling for fiscal stimulus to stem the manufacturing problem we have. I call that group therapy. This is the 11th time we have done it. She always gathers these International Organizations around her. We are very candid. She asks all the questions in her mind and we tell her what we think. It is a very good giveandtake. It is a very good exercise. The question of the german economy, of course, we hit to negative growth last quarter. In october. Dy we had the Third Quarter happen. We will see in october, november whether it was again a continuation of negative growth and therefore we will have officially a recession. We are forecasting positive growth for the years. We are not projecting negative growth for the german economy. The question is, ok. With the space that germany has built by being prudent, being , is there space to put something more on the table that will stimulate the economy . It is also about the spillover. Why . Germany is the only large economy in europe, certainly, that has that capacity. Therefore it is not just a german issue. It is a systemic issue for europe and to a certain extent, for the world. Matt will Angela Merkel and berlin stand behind europe in brussels . Thank you so much. Really appreciate your time this morning. There minutes away from open. Next, we take a look at your stocks to watch, including the automakers. It has been a problem in the u. S. Real pressure. This is bloomberg. Anna welcome back to Bloomberg Markets the european open. Lets get stocks to watch. Paul jarvis from our Equities Team is covering the gaming space. Dani burger has the latest from tesco. Benedict, on the car sector, bring us uptodate. U. S. Car sales for september late yesterday, it is not a pretty picture. Cars the jetta, the gulf, are not doing very well. Overall, this is not a september volkswagen were hoping for. You probably see it in the stocks this morning. Matt consumers are waiting for the id3 from volkswagen. What have you got on flutter . Morning is that flutter is buying in an all share deal in the latest gaming industry consolidation, which has been a big thing. Going forward, look at the other stocks. Look at gdc. Once these stocks when they are in the u. K. And canada later, consolidation is a big issue in this industry right now. This is one to watch. Anna lets get to dani burger on tesco. What a day for leadership changes. The ceo stepping down next summer. He will be succeeded by ken murphy from walgreens. Cheers were called down 3 . The street really likes the current ceo. He was able to turn around the company when he joined, boosting profit despite brexit concern. Matt thanks very much. Get your latest stories by typing first go under bloomberg. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. You can share 1, 3, or 10 gigs of data between lines, mix in lines of unlimited, and switch it up at any time. All with millions of secure wifi hotspots and the best lte everywhere else. Its a different kind of wireless network, designed to save you money. Switch and save up to 400 a year on your wireless bill. Plus, get 250 back when you buy an eligible phone. Thats simple. Easy. Awesome. Call, click, or visit a store today. Anna a minute to go until the start of the equity trading day. This is what we have in the futures. A minute until we start equity trading. Futures are suggesting we will be weaker at the start of the trading day. No surprises when we see what happened in the asian session. Weakness across many markets. Some are playing catchup from holidays, but add to that geopolitical tension on the korean peninsula. Factors, but also the concern about global slowdown. The growth data in manufacturing we got yesterday. The u. S. Ism number for manufacturing reminding everybody about the weakness. Raising Big Questions about where we go next in services. Whether we will see the same picture coming through. That is not expected. We get the payroll number of course on friday. Plenty of data points to watch as we build toward the end of the week to get a gauge of Global Growth. With that in mind, lets see where we open on the European Equity markets. Futures were pointing us to the downside. Expected to play catchup with what we missed overnight. Bear in mind u. S. Futures point slightly higher. Or willt turnaround, your European Equity markets come back to the flatline as the u. S. Markets get underway . We will see whether that transpires. We are in negative territory on the ftse 100 down by 0. 4 . Euro stoxx fairly flat overall. In the pound. Ves the ftse and the pound are trading weaker today. We have seen a negative correlation between those two. We dont see that this morning. I wonder if that is because the ftse is responding to global news flow. We will get into individual movers and see whether that is the case. Lets take a look at the sector picture. Autos very much in focus. We are looking to see where the sector goes. Financial in the red. Resources and energy in the red. Theth, industrial, some of staples looking mixed. We are slightly biased toward the red here on the map i am standing on. Suggesting we could see a lot of support for the retreat we are seeing in european equities today. Definitelye seeing the biggest downside i have seen in some time. Are down. Only 87 are up. Five to one to the downside. Matt the gators are not big movers. Unilever up 0. 5 after a purchase in japan. Otherwise nestle up 0. 5 . You do not see gainers to the upside. In terms of the losers, more like 1 losses on the big names. Bp, Royal Dutch Shell all falling about 1 . A little less in terms of Oil Companies that are down and big heavyweights that is dragging down the stoxx 600. Texaco down 1. 4 . 1. 4 . Co down big Management Changes in Standard Life, aberdeen to tesco as well. You do not see big moves. 1. 5 is the drop on u. K. Supermarkets. European markets opening lower across the board. Asian stocks retreated after a week. Joining us now is paul markham. Isn do you make of the numbers, u. S. Manufacturing recession looks pretty solidly registered. Will it spread . To haveere does seem been something of a trend developing in the data. It is starting to become softer. It will not be a linear process. Oldfeeling is the cycle is but we are likely to see the economy starting to become softer. I think it has been mentioned the nonmanufacturing is important, and we will watch it closely. Anna good morning. Looking ahead, we have this confirmation of the Manufacturing Sector in the u. S. Looking grim. This is the services this is based on pmi data. We are looking ahead to the isn number. We have seen a move downwards, the question people ask is how long can this continue. How can it continue to not affect the Services Sector . Germany are and sensitive to the Manufacturing Sector, that will filter through to the underlying economy and it is starting to be difficult to stimulate the eurozone economies without a strong rebound in the chinese economy. In the absence of there being clarity, that will continue. See in terms you of a way out for the u. S. Firepower, limited and Monetary Policy is not moving. Will we see a bigger fiscal package . Paul it is possible, last year we saw the significant stimulus from the administration. The question would be, how will that be enacted, whether there should be further stimulus. I think they will be under consideration, but we should not forget the fiscal situation in the u. S. Has not been improving. Some of the firepower in that regard might be stronger. The u. S. Economy has shown more structural robustness. Aboutwe have been talking surprises on the pod of side. Another chart shows you in the purple the positive surprises. Number, the purple has been the u. S. Data surprising on the upside, but now we see a rollover emphasizing what we saw yesterday in the Manufacturing Sector. How much did this change what we expected. Negative data means maybe the fed will not be as hawkish. Paul they have a limited amount of powder left to stimulate the economy further. They do not want to use it all in one go. They will wait to see the data to make sure they have the powder to cut rates. Left ine not many cuts compared to cycle previous cycles. They will be careful about that. They will have to act quickly to stay ahead of the curve. Matt we will keep you with us as guest cohost for the hour. Paul markham, Portfolio Manager in global equity, Newton Investment management, he will stay with us. Up next, stocks on the move including Standard Life aberdeen , the stock down after the vice chair Martin Gilbert, and a legendary name in the industry is retiring in one year. This is bloomberg. Matt welcome back to Bloomberg Markets european open. Right now 10 minutes into the trading day, and red arrows acrosstheboard. Disappointing in the u. S. , leading to a global drop in stocks. We saw it in asia and now europe. Lets get our top individual stocks stories with dani burger in london. Some really volatile moves this morning, but one stock has 13 , combining with stars group. They are Online Gambling and gaming companies. A trend we have been seeing. Each Company Shareholders getting half of the new combination, some positivity there. One to watch, we saw shares plunge, now they are unchanged. They are having a shuffle, that is a sky news is reporting. This is a lot of london news with leadership changes. Bank is another one we are seeing a shuffle at the top. Their founder stepping down from the board by the end of the year. Theas been there since creation. Some of his role had been pulled back in march, so not much of a surprise, but shares higher by about 1. 5 . Anna thanks dani burger. Key appointments and people stepping down. Lets stick with u. K. News. The british Prime Minister is setting an ultimatum to set brexit under his terms or face a no deal divorce. Boris johnson proposing to scrap the backstop and using a time limit instead. Paul markham, Portfolio Manager in global equity, Newton Investment management is still with us. Numbers,een the reported and rejected by the eu. We will not go into detail as we have not heard all of it from johnson. Ister boris how are you positioned in the assets story as we wait for what could be an incredibly eventful 30 days . The 2016 referendum did not place the portfolio too far in favor of one outcome or the other. The one thing we did expect would be that sterling would be week, and that is proven to be correct. Is with overseas earners within the u. K. Market, which does favor restructuring anyway. That point of view, it was the right thing to do. Hedging the currency is also the right wing to do. Aom here, if there is successful outcome, i would expect sterling to be better. Were talking about this and the break, and i mentioned earlier the negative correlation we normally see between the ftse 100 and the weakness in the pound, we are not seeing that today. We see a positive correlation with both going downwards. Why is it that the pound weakness is not enough on a day like today to push the ftse 100 higher . Paul the bad manufacturing number from the u. S. Will drive the performance of global stocks today. It is usually enough to say the local currency of the company in question will be week, but there is overseas growth to benefit from. The Global Market is slowing down for goods and services, and that drives share prices lower despite that sterling should benefit. What do you expect from the bank of england, and how important is it . Paul i would say at the moment they will stand pat. I do not see them doing anything at this point. Looking forward, they will have to be vigilant around what happens in a no deal outcome. From the perspective of the mandate they have, they may have to be quite creative around trying to adapt to what could be a poor economic outlook, particularly if that is driven by a week currency that leads to an inflationary outcome. On an outright basis appear economic weakness, that is not something that is a big part of their mandate. I expect them to stand watching. Matt you will stick with us, paul markham, Portfolio Manager in global equity, Newton Investment management, our guest cohost for the hour. 70 years of communist rule, yesterday hong kong was rocked by the most serious classes since widespread arrest began in june. The the first time a protester with a livepolice round. More flash mob protests around the city this afternoon, and outside government headquarters, wherever you go there is a lot of action. What is the latest . Watching, and this area was crowded with black shirted protesters. They have moved on. Social media is where they are communicating to determine their next location. They were in a Central Business district, and we had young joinssionals during lunch a flash mob. Thousands have joined, and that time. D traffic for a this, as there is frustration and anger and a backlash against the police action. Yesterday, we saw six live rounds used by Police Officers for the first time, and they shot actually hit an 18yearold student who is in stable condition after surgery. Have some of the biggest organized rallies who intend to mobilize a largescale mobilization to ensure there is momentum. That is what they are asking for. Dayber 1 will be known as a of protest. Anna thank you for the latest there from hong kong. On another daynd of protest activity. Lets look at market, european. Quity stocks down by 0. 7 the ftse 100 down by 0. 8 . Basic resources, anything that moves around or a weakness in the Global Economy is to the downside. We have broken it down by the top sector, and we see some movers. Theter entertainment is in gaming industry, surging after a combination with star. It is moving to the upside. Einhorn on avid big value. We will talk strategy next. This is bloomberg. Anna welcome back to Bloomberg Markets european open. 21 minutes into the trading day. The ftse 100 increasingly negative, down by more than 1 . Last months market rotation funds, but one has emerged from the rubble. David einhorns gained in september, linked to the value growth story. Dani burger has the latest. Einhorns fund this past month when values started to gain in favor of momentum, it did very well. We can see how well it did when we look at its individual holdings. Are his biggest convictions. These are value stocks. House gained nearly 50 in september. Those did well for einhorn. Big shorts also paid off. He shorts big growth momentum names. Amazon and netflix among them. They fell in september, adding to those returns better than 8 . Strategy einhorns hurt them, they tumbled last year into double digits, 34 . Is this start of the reversal that will help him . Last month, you can see values topping the leaderboard at 12 . Momentum falling 10 . While this hurt most hedge funds, a deep value fund does well. Take one day, it looks like the reversal has stopped and we are back to normal momentum. Value sinking near the bottom. Einhorn did well in september, but considering these returns, his luck might have run out. Very much, dani burger, looking at factors to watch. You can get that on the bloomberg. Paul markham, Portfolio Manager in global equity, Newton Investment management is still with us. What is your take on what looked like the and of the momentum for a rotation into value . Does not seem to have held up well. Paul no, and not the first time markets have tried this trade. Valuations, the ative to growth are at they look cheap. They are largely dependent on continuation of economic momentum. U. S. Umbers in the yesterday do not show us. We saw that last week in france and germany as well. It may will be that valuations have attracted investors, but it that it does not last long. Anna we will keep an eye on that rotation. The me ask you what else you think is a good value. I have a chart that tells that story a little too dramatically, but it suggests we are relatively cheap. What appeals to you about the japanese equity story . The known nones are out there and have been for many years. The yen has been structurally stronger over the last 15 years. On the upside, there are Good Companies in japan. The strategy would be to buy individual stocks and not the market. There are changes which oversees investors have become impatient about. Inhave seen an improvement independent directors, retail targets, transparency, disclosure. Those at up to a more open japanese market. We think they are undervalued. Matt i have a relative rotation graph. It is difficult to read, what it shows you is that health care industrials are on the improving sector. What do you think about health care . We are overweight health care and have been for some time. Health care offers some important tailwinds to investors. In the emerging markets story, we are going from 7 billion to 9 billion, and that will be an official, and most growth will be in emerging markets in asia. The valuations are underrated. Anna paul markham, Portfolio Manager in global equity, Newton Investment management, thank you very much. The will continue conversation on radio. This is bloomberg. Matt lets get your top headlines for you. U. S. Car sales disappoint as i sm data hits a decade low. Boris johnson will present his brexit plan to the eu today with provisions for a limited irish backstop. Ireland calls the deal a nonstarter. Race to the bottom. Charles schwab shakes up the brokerage world by cutting fees to zero dollars. Though it could always go negative. Welcome to Bloomberg Markets. I am met miller in berlin alongside anna edwards in bloombergs headquarters in london. Anna it could go negative. They could be paying us for the privilege of managing our money. Lets check out the markets. The weakness in the equity markets is quite widespread. We are down by 8 10 of 1 . 8 . There does seem to be quite a lot of conviction to what we are seeing. Lets start with the upside. Flutter entertainment up 14 . A merger of this business with another is what is behind the big move. Grimke is up, a leasing business. They are boosting the fullyear business and that stuff goes higher. Interesting to see that tesco moves higher. Numbers, we also heard about the department departure of jade lewis. He will be going to another job. Bit of reshuffling around these positions and france going on. Lets have a look at the downside. This is where the breadth of the movement. We have got individual movers to the downside and moving lower. They had a news out talking about plans for costcutting. Ldp. Talk about we dont talk about polish Apparel Stores often but they are down by 5. 1 . Thirdquarter numbers are wearing on the stock. Lets get a first word news update. We have that in hong kong. U. S. , more heat on President Trumps oldest allies over the unitarian call ukraine call. Warnedmpeo has been about possible charges after blocking testimony from five officials. The lawmaker said he appears to have an obvious country conflict of interest. The u. S. Economy is losing speed. Manufacturing is stumbling. Index slipped to a 10 year low and President Trump is blaming the fed. He says Jerome Powell and his colleagues have allowed the dollar to get to strong. Too strong. The dollar index is up less than 2 on the year. Hong kong protesters are planning a fashion round of disruptions today fresh round of disruptions that i after police shot a demonstrator. The man remains in critical condition. The rallies coincided with celebrations in beijing marking 70 years of communist rule. In the u. S. Harvard university has defeated and antiaffirmative action lawsuit aimed at stopping the school from factory race into its admissions. Collegel judge says the does not discriminate against asianamericans, adding that considering race as part of the process is lawful. It is a ruling that is likely to be challenged all the way to the Supreme Court. Standard life aberdeens Martin Gilbert is retiring. The finance veteran was previously the chief executive of Aberdeen Asset management, a company he cofounded. It merged with Standard Life and 2017, making him coceo of the uks largest asset manager. Earlier this year, he became vicechairman of the business. He will step down in 2020. A big block of cheese to protest tariffs. Thats what mike pompeo was greeted by in rome. During his handshake, a journalist from a satirical show handed him a wedge of parmesan. This is a protest of the plan to tariffs eu goods over the airbus dispute. Contet smiling as complaint. The reporter complained. The reporter was taken away. Global news, 24 hours a day on air, on tictoc, and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Anna, matt . Matt thank you so much for joining us with that fantastic story on the cheese wedge. The Global Economy is, no joke, sounding alarm bells as a wave of data shows manufacturing in a slump, exports falling, and sentiment sliding. The u. S. Fails to defy the factory glue facing china and europe. Slid deeper into contraction, giving the weakest reading since 2009. Auto sales look equally grim. Nissans 18 drop led declines. Toyota and honda did not fare much better. The severity stokes fears that the long anticipated car sale we call, carmageddon, maty may be arrivinig arriving. It is not look good. What is the problem . As you said, the picture is not complete. We will get ford and gm chrysler today with quarterly figures. But what we have seen is as you say. We have seen these numbers really drop, particularly on the asian side. The german carmakers did ok. Volkswagen had a very tough quarter or month. But bmw and daimler did all right. 34. The difference between bmw and mercedes sales in the month of september. They outsold mercedes by a grand total of 34 cars. Net and neck. Neck and neck. Anna that is a granular is granular. What is the Bigger Picture . Is it about weakness in the confused byare they the move away from Traditional Cars into electric . Its probably a bit of all of that. It shows that if you are not top of the game in terms of your model lineup, if you have cars out there that feel dated, you will be punished quite mercilessly. We saw it with audi. Their cars have been around for a while and they are real volume covers. You see it with volkswagen. If you are coming out of a model cycle and have not introduced the new cars yet, that is really going to hurt you. We see somemercedes of those very expensive suv models selling incredibly well. Low volumes, maybe, but its a very expensive car. If you have a new car out, people will still smack that up. But there is still a wait and see atmosphere. Volkswagen,ntioned they have just introduced this electric car. It has not come out yet, so you would be inclined to wait. Story, i think this all 5000 of the gicquel us in one month alone. Its fascinating because they have a grand total capacity of 22,000. Clearly, they just getting those deliveries over, which is why they have such good numbers. Thank you for joining us. Our Senior Editor for Global Business here in berlin. Now, we want to get over to a u. K. Shopping story. Tesco has announced its ceo will step down and be succeeded by a. Joining us for more is our stocks reporter. U. K. Investors love their supermarkets and this is a surprise change at the top. You are right, absolutely. There was speculation that lewis would step down because he has been around for five years. He has been instrumental to the turnaround of tesco. Which despite brexit, has increased profitability, cut costs, laid off people, and expanded its business. There were rumors, but again, the choices they are making for the start course, a top walgreens executive, is quite surprising. There is speculation they would get someone internally to step up to the role. They think conclude the job is done and the turnaround is finished . He was brought in after a big scandal years ago. Thats right. He stepped in at a weak point in history and was instrumental to the turnaround. He said he is not leaving for another job, and after five years, its time to pass the baton. He is only stepping down next summer, so theres almost a year for him to introduce a new ceo and make this a full transition. The stock slumped in morning trading, but as far as i know, it is now up. It shows you investors were confused about the surprise announcement. Morgan stanley did note there will be questions from investors because lewis was such a successful ceo. Anna up by 1. 2 right now. Maybe that clarification he is not going until arrival helps. Thank you for the story. Coming up, a fair and reasonable compromise. The british Prime Ministers proposal for the island of ireland. Will the eu agree . That conversation up next. This is bloomberg. Matt welcome back to Bloomberg Markets. This is the european open. We are 44 minutes into the trading day and looking at more than 1 drop. The british index fell 80 points. The dax in frankfurt fell 112 points. Lets look at what is trending around the bloomberg universe. Dani burger is standing by in london. What is the latest in the Credit Suisse spying scandal . Dani we have to talk about our great reporting. We are learning about the details of the new years party that kicks off the tension between Tidjane Thiam and iqbal khan. Fromently, it all started an insult to the garden at this party, escalated, and reached a climax. There has certainly been a lot of fallout. Thiam does not seem to have received a lot of scrutiny for this but his top lieutenant did lose his job. It mean some of the drama might have settled. But when it comes to the next successor, thats where this because ofr may go the top lieutenant who lost his job. Anna another story i noticed trending, how about the Charles Schwab news . Escalating the race to the bottom, if zero is the bottom, when it comes to brokerage fees. Dani this race to zero is certainly not new but schwab seems to have run it. They announced they are slashing fees on their brokerage accounts. Here, the strategy is they can reach economies of scale. They get in more assets because they are charging zero fees and can then earn interest that more than makes up for the slashed fees. And perhaps, they can afford to take this risk. They only get about 7 of net income from fees. But it is a difficult environment to get interest considering what banks are doing. Shares dropped more than 10 yesterday and you saw competitors drop as much as 20 . Ameritrade matched that announcement as well. For thembe difficult because they get more than one third of net revenue from fees. Anna thanks so much. Dani burger with the trending stories this morning. Talking about another story, thats u. K. Politics. Boris johnson is preparing a final brexit proposal to the eu. If rejected, he says the u. K. Will walk away with no deal. Boris johnson is due to outline details of his plan when he addresses the conservative Party Conference in just a few hours. Joining us is a joey jones from cicero group, formerly spokesperson for theresa may and deputy Political Editor at sky news. Very entrenched in u. K. Politics. Good to speak you this morning. U. K. And of the Northern Ireland being in a separate customs regime, giving the local administration some sort of say of what happens. And then a special temporary arrangement for customs. Im sure there is a lot of detail. Already, ireland has not been positive. What is your assessment . It is hard to be optimistic about the idea that this will fly. It is, i think, a genuine offer from Boris Johnson. Taking into account the multiple political pressures that are weighing on him at the moment. But it is one million miles from the source of things the European Union has said they wish to consider. For instance, there are a bunch of things pleased that any border and the u. K. Wants to check that. Cherrypick. Yes, we want police customs. The objective there is for the u. K. To be able to go out and negotiate its own customs deals. Challengeszing the of moving goods back and forth across the border between the republic of ireland and Northern Ireland. Theyre willing to accept the idea that with agrifood products, there should be regulatory harmony. But it just feels as though the u. K. Government has never really gotten to grips with the contradiction inherent in its overall position. That it wants to see no physical border between the republican Northern Ireland at the same time it is trying to police customs. Anna trying to find all of these solutions. Even if we do end up with some kind of deal, what is your assessment of whether that would get through parliament . Joey that is what makes it harder for Boris Johnson to persuade his partners and friends, as he describes them, that he is serious. His own position has been grievously weakened and does not command a majority after he kicked out 21 of his ownmp own mps and amber rudd joined them. They will be skeptical about the proposal and whether it is a serious starting point for negotiation. To be frank, the u. K. Government has never understood the negotiations. Bearingthey are blunt blundering into this saying it is the final offer, when it is actually the first anna he is saying they realize it is the time to move. Joey i just feel they dont understand the u. K. Is not in a position of strength to dictate terms. It also goes down particularly badly with the republic of ireland, where they would be badly hit by no deal. They know that london knows that. Matt i wonder. It seems Boris Johnson is telling everyone he will leave without a deal if you must. Parliament hasms made that impossible. If he doesl happen try and leave with no deal, even though not legally allowed to . The likelihood is that he would be taken straight back to the Supreme Court, where if he persisted in trying to get around the law, essentially find him in contempt of court. It is extraordinary. It would not be very long. The Supreme Court can move very iny and getting getting together justices in westminster. There is no real reason that should overhang the 31st and allow Boris Johnson to creep out on the date he has insisted. Thats why it is more likely, frankly but that he finds himself forced to resign. It is unprecedented the situation in which we find ourselves. Anna he said this weekend he is not going to resign. Joey he says he want to any of these things and yet he is going to have to do something. I have just come back from manchester. There is an air of unreality where all of the true believers in the boris and brexit project are crossing their fingers saying it will be all right. Objectiver a more observer, looking at the hard reality of the legal funnel down Boris Johnson is being channeled funnel with which Boris Johnson is being channeled, for all of his projections from the stage as though he is in a position of strength, his back is truly to the wall. Anna a strange situation, isnt it . A government projecting confidence, thats what i thought on sunday and monday. And yet in westminster, he has the majority. You wonder where that takes us. Joey jones, Strategic Counsel at cicero group, his analysis of where the brexit story goes next. Coming up, protesters returned to the streets of hong kong. These are live pictures of a gathering. We will get analysis from our team on the ground. This is bloomberg. Matt welcome back to Bloomberg Markets. 55 minutes into the trading day, down across the board with losses accelerating after the week ism and car sale numbers numbers. And car sale protesters in hong kong have returned to the streets the day after police shot a demonstrator with a live round. We have been following the flash mob demonstrations and are outside of the main train station. Whats the latest . I am standing here in front of a group of protesters who are chanting out to commuters to cherish their life and not take the train. Been a symbolic target to express the frustration. Authorities have yet to heed their five demands. Today, we have the General Chamber of commerce calling for peaceful dialogue. Divide between protesters seeking their demands and authorities who want to order. You have the civil rights watch calling people more calling for even more widespread rallies. Ofthis flies in the face what they had to say at tuesdays flag raising ceremony, a modest affair to market chinas national day. He said they will start fresh, but that does not look like it is being heated. Heeded. , surveillance. The ftse 100 is down by 1. 2 . Cac and dax down. Travel and leisure is the only sector in positive territory this morning. This is bloomberg. Sometimes your small screen is your big screen. And with the Xfinity Stream app, which is free with your service, you can take a spin through on demand shows, or stream live tv. Download your dvrd shows and movies on the fly. Even record from right where you are. Keep what you watch with you. Download the Xfinity Stream app today and get ready for Xfinity Stream tv week. Watch shows like south park and the walking dead october 7th through 13th. Prepares an ultimatum for the eu. Negotiated brexit on his terms in the next nine days or face a no deal divorce. American manufacturing slumps to its weakest level in a decade. Suggest it could mean no recession at this time. Protesters march in hong kong after violent clashes. We are live on the ground. Welcome to bloomberg surveillance