One basis point. Crewed up by over 1 , but it has been a brutal crude up by over 1 , but it has been a brutal week. Its time now for global exchange, where we bring you the market moving news from all around the world. Lets kick it off with the latest on the trade war. Chinese officials are narrowing the scope of what they will address in highlevel talks that kick off thursday in d. C. Bloombergs shawn donnan joins us on the phone. What do we know so far . Shawn the chinese delegation is coming again to washington this week, led by chinese vice premier liu he. He has been saying there are two big things they will take off the table this week. That is any discussion of broader industrial policy, and that is made in china 2025, this plan from xi jinping to dominate the world in areas like robotics and artificial intelligence, and also government subsidies. These are the subsidies that have really fueled chinas industrial rise over the past 20 or 30 years. They are off the table as far as the chinese are concerned, and that is a big blow to Donald Trumps ambitions for a big revamp thethat would way china does business and the relationship with the United States. Alix looking forward to that later this week. Thank you so much. In hong kong, violence escalated for the 18th straight week of protests despite an emergency law banning facemasks. Sophie kamaruddin is there on the ground. Walk us through what happened this weekend and what is going to come today. Sophie the Emergency Powers that banned the use of masks in public assemblies. Tonight there is a call for more protests to take place. Im in one of 18 districts that are the rallying points. This amid ongoing criticism of carrie lam and her administration. There is concerned that there might be more authoritarian measures used under the emergency ordinance, such as a curfew or even limiting internet access, so expect more action as four months of kong. In hong , the u. S. Urkey military will be stepping aside. Ant is in onur istanbul. Onur the Turkish Military lunches and operation against americas wartime kurdish allies in syria. Ledne hand, the Kurdish Syrian Democratic forces have been a close ally of america against the islamic state. On the other hand, turkey, a major nato ally of washington, considers the Kurdish Group a major Security Threat because of its alleged links to a group that turkey has been fighting against for decades, the pkk. The incursion is going to start as soon as american troops are out of the area, which could take a few days or less. One thing once the incursion begins, a major problem facing turkey and the european powers will be how to handle the isis prisoners in the area. Kurdish forces say they may not be able to contain the isis prisoners in makeshift jails if the Turkish Military seizes areas nearby. Theident erdogan downplayed threat, saying that turkey and european powers such as germany and france are working on their own separate plans of how to handle the prisoners. In the middle of all this, the turkish lira does not seem to have enjoyed the news. It was down by as much as 1 before trimming some of its losses later in the day. Alix thank you very much. Now we head to the u. K. , where prospects of a brexit deal fade as french president Emmanuel Macron and irish punt minister irish Prime Minister leo varadkar signal they want progress by friday. The only question is whether brussels agrees to a deal, or whether we will head off on our own. Maria tadeo is in brussels with more. I wouldnt say the prospects for a deal are completely off the table, but the negotiations did stall over the weekend. Both the french and the iris said they want to see more detail come friday, and it is only at that point the europeans will assess whether a deal can that very crucial october 17 summit here in brussels. Boris johnson is still very much sticking to the script. He said we are going to be leaving the European Union october 31, that is not negotiable, but he is running into a contradiction. Hes also said he will obey a law that prevents him from leaving the European Union without a deal. If he doesnt leave, he is breaking his word. If he decides to leave with no deal, he would be breaking the law. When you look at the mood in brussels, the sense is that ultimately, this is still very much a political story that needs to play out in the United Kingdom before a deal is cut, and ultimately this whole thing is headed for an extension. Alix thank you very much. More trouble for european banks. Reduce its headcount by up to 10,000. What do we know at this point . A sickly, what we are looking at here is the first big restructuring move of hsbc basically, what we are looking at here is the first big restructuring move i hsbc under the new chief executive. What we are seeing now is his attempt to try to get a handle of the cost base. The Public Comment on this, what we can see here is a lot of these cuts could come from disposals. For instance, the French Retail Bank that they seem to be getting rid of sometime in the near future. We are also expecting cuts around the seedier levels of the bank, so this will be job cuts around the directors and the senior cast of the bank. Alix thank you very much. In the u. S. , a second whistleblower said to come forward over President Trumps involvement with ukraine. Kevin cirilli is in washington. The white house mute yesterday when it comes to the morning shows. What do we know now . Kevin a second whistleblower, theording to attorney for the first whistleblower, poses potential significant Political Risk for President Trump and the administration, who have attacked the first whistleblower as being largely partisan. The second whistleblower could potentially corroborate much of thenarrative espoused in nine page original report that the administration has picked apart, much so during the last week. That said, the president still not at risk of losing republican support. In fact, many of the president s prominent republican allies over the weekend defending the administration. They also suggest that House Speaker nancy pelosi has been working in tainted with House Intelligence Committee chair adam schiff on a political operation. Democrats, for their part, issuing tons of subpoenas, trying to get to the bottom of this, im told by thanksgiving, where articles of impeachment could potentially be brought to the house floor. That would set up this matter to potentially be resolved by years end. Alix thank you very much. Also want to highlight ge. That stock moving in premarket. They said they will be able to cut their pension deficit by up to 8 billion. That was really an overhang for the company. That would be a huge list off of their shoulders a huge lift off of their shoulders. The question is whether it is enough. Coming up, we have your morning trade and analysis of the markets in todays first take. Happy monday, everybody. This is bloomberg. Alix time now for bloomberg first take. Joining me is our inhouse team of wall street veterans and experts. Romaine bostick, vincent cignarella, and damian sassower. The main event obviously is going to do with trade. Now theres questions as to how much china is going to be willing to talk. What are traders talking about . Vincent perhaps these talks, even if they have any kind of success, will not be the kind of success the markets are looking for. It is really interesting that its come up a couple of days before the actual conversations are taking place. We kind of known this for a long time. June had said in early intellectual property is not on the table. We are not changing the way we do business. Stop asking for it. Weve kind of forgotten it, and its gone away as people were hoping it was sort of developed in the trade talks. Now, just a few days before the chief negotiators already sit down, china has come back out and reminded everyone of where they actually stand. I have to tell you, the markets are a lot calmer than i thought they would be. Romaine at the end of the day, is it going to be enough for trump . The market cares whether or not we have a pause or this escalation of the tariffs. Is this reduced or a scaledback version going to be enough to placate trump and his negotiating team . I dont know. Im not going to try to handicap that. But if we do get that, it could be a good thing. Alix is it actually impeachment . You are seeing u. S. Equity leading losses, europe up, germany up, despite terrible factory orders and domestic demand actually being bad. I would think europe would be lower, too. Damian for me, it is an exogenous factor like the hong impeachment, or it could be the data. I dont put a lot of stock in that, especially with taiwan export orders falling out of bed again overnight come about maybe they are seeing something in the data that says maybe we could slow down a little bit and take our time and let things progress at more of a measured pace. Talked aboutudlow hong kong and how it relates to trade. Heres what he had to say. Mr. Kudlow we continue to monitor the Hong Kong Freedom and democracy movement, which the u. S. Supports very strongly. That could impinge on those talks. Alix to thatalix point, ok, what does that mean . Ofian it adds an element exogenous risk. Impeachment is something you have to game theory for you are trying to decide what is coming out of washington. Romaine i wont use a big word like exogenous. [laughter] ses ane but he also rai good point. Theres always a new something being thrown onto the table that wasnt there before, which almost walks us back. Vincent and i think the other thing which kudlow said on friday to went under the table, he was speaking very harshly against germany and softly against china, almost as if they knew this was coming which i think they did. We only have Something Like 15 billion in exports that go to china, but 150 billion to germany, and germany is the real problem. They need to expand fiscally. They need to expand Monetary Policy. To me, this was just a deflection. I think what is really likely to happen is we get an ag deal this week, nothing that we really want. Thats a lay up. China needs the pork anyway. Alix thats crazy, right . Did you see the pictures over the weekend . These were enormous speaks. We actually enormous pigs. We actually talked about that at the editorial meeting. But the tons of soybeans are literally peanuts your buying. Vincent i think what happens is we dont get what he wants with china, so hes going to deflect and go to europe, and auto tariffs are the next stage on germany. Weaine we have ip damian have ip tomorrow coming out of germany. That will be the data point that will force the ecbs hand, and we have ecb minutes thursday because we seen some surprise resignations after the stimulus package was announced, so theres obviously a lot of discontent in europe about what that stimulus looks like. Vincent we have the fomc minutes coming out as well, so we will see the two main Central Banks of the world and what the dissension is within the ranks. Alix what we didnt have in the u. S. Were x central bankers writing how much they disagree with the policy at accusing them of basically subsidizing debt laden governments. That was totally crazy, by the way. Romaine damian whether we ike, whatever it goes, the fed stimulus, i think we are moving away from it, that has been the story for the better part of the last year and a half. Where is the fed heading next . If we see this come to a head in october, which has seasonably been a very weak month for asset prices, fixed income debt, you name it, it could be an interesting month. I dont expect to see a lot of risk put back on yet. Id like to see november come around. Romaine we are going to hear from powell today and tomorrow. Alix all the time. Romaine and then youve got the Imf World Bank meeting, which most people dont normally Pay Attention to. Every couple of years, they managed to be relevant. I think this could be one of those meetings where you might get some relevance. Alix we did hear powell friday say we actually want inflation to be a bit higher, to be clear. That feels like one more rate cut. What is that . You are laughing, but come on. Romaine i feel like at this stage, inflation is almost on the back burner. Alix because it is close to their target, right . Romaine but there are now bigger risks they need to worry about. I understand they need to be faithful to that inflation target, but i dont see many in the market talking about this. Damian we are still in expansionary territory. We still have unemployment at 3. 5 . So where is the recession in the u. S. . I can see the case for both sides being made, but with some of the issues in the frontend of the u. S. , with new regulations, banks cant lend the way they used to. The mechanism of how quickly that flows to the real economy is limited to a very large extent in a new doddfrank world. We will see how long the fed can go on with sitting tight, maybe not moving as quickly as it would like to. Our bets are that it is going to get pretty painful and the next few months, and we might need to cut more than the markets are expecting. Vincent which is going to do absolutely nothing, as every central banker has told you. You get to the neutral rate. What does that translate to . A couple of bips in the mortgage rate, and auto lending . It doesnt do anything for personal finances. What we look at this thursday, real earnings. That is all wages, inflationadjusted, and we will see where the consumer is. If that declines as average earnings did, we might start to worry. Alix help me understand this one. You come in this morning, theres a lot of stuff you have to deal with if you are a traitor. What do you do if you are a trader. What do you do . I spoke to one who says quote the rotation into a cyclical from defenses, thats going to need some big bazooka to get us there. What do you do . [laughter] the shift in leadership from growth to value, from defensive to cyclicals, it is moving down in quality and emergingmarket credit. You dont see people taking advantage of valuations and highyield to really move down and credit with any significance. Where is that yield coming from . In our opinion, you are going to the local environment. If you look at asian trade currencies, we saw some big complacency. People were taking off their dollar calls, basically just getting along local currencies in asia. Now we are seeing those hedges being rebuilt. I think we will see more of that. It carries so well in places like indonesia. Vincent taylor but if you vincent but if you hedge too much, you take away the entire trade. You haveally like em, to have a part of that trade. I think you still stick with the dollar and treasuries because the bazooka for em is not coming. The Global Economy is not going to wake up in november and say all things are fixed. We still got a lot of problems. Trade talks with china are probably not going to work out. Trade talks with germany probably not going to work out. Who does he hit next after that . I dont know. Potentially asia will be the next bazooka to fire. If the china trade talks dont work and you move everything to vietnam, is that my next target . Very likely. But em is not the place to be. Alix really appreciate it. Romaine bostick, vincent cignarella, and any intesa our. For your viewing and damian sassower. For your viewing pleasure, we. Ave the pe ig the pig no, we dont have it. We will try to get that. And analysis,arts check out gtv. This is bloomberg. Oomberg. Viviana youre watching bloomberg daybreak. General electric plans to reduce its pension deficit by as much as 8 billion. Ge will freeze pensions for about 20,000 employees in the u. S. Its also offering a lump sum option to 100,000 former employees who havent yet started receiving monthly pension payments. The union for striking General Motors workers says talks to end the three week walk out took a turn for the worse. Negotiations have stalled on the request for more investment in u. S. Factories. To union says gms response its latest proposal didnt address some issues they identify as sticking points, including job security. Gm maintaining it bargaining in good faith. Another sign of the impact the protests are having on hong kongs economy. According to one real estate agency, one in 10 stores are now empty in the popular causeway bay shopping district. In august, the value of retail sales fell i almost 1 4. That is your Bloomberg Business flash. Alix heres a story for you. The National Basketball association is trying to diffuse a political firestorm in china. The league now apologizing after the general manager of the Houston Rockets tweeted his support for protesters in hong kong. That tweet led Chinese Companies to suspend ties with the team. The rockets are one of the most popular nba teams in china because of its former star yamane. Former star yao ming. Another example of how companies are in a really tough spot on talking to hong kong and how it relates to china. Coming up, how the latest jobs report will play into the fed rates. We are seeing weakness in equities, but relative strength when it comes from abroad, despite a raft of negative european data. It is the u. S. That is the big drag. S p futures now down by 0. 2 . 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 an eligible phone. Call, click, or visit a store today. Alix this is bloomberg daybreak. Its monday, its 7 30. Weakness in u. S. Equities compared to european equities. , s p futures3 down 0. 2 , the off the lows of the session. Investor sentiment really low, the factory gauge out of germany also low, particularly when it comes to domestic demand. Eurodollar is pretty much flat. Also taking a look at the german tenyear. That bund yield is 60 basis points, maybe a reaction to the data, but it feels like not a lot of movement any which way. Twostens spread, we are looking at a doubling in less than a week. Crude getting a pickup by over 1 . China bailing out of the gas project in iran highlights how isolated iran can be, so maybe a touch of geoPolitical Risk premium coming back. It is a very busy week for u. S. Data. The big numbers to watch, you have inflation, ppi tomorrow, cpi thursday. Joining me from london is gene tannuzzo, columbia threadneedle deputy global head of fixed income. I feel like the conversation is we want to be neutral duration now. How do you position into this kind of week . Gene im not sure you dont want to own the short end. We seen Interest Rates come down meaningfully in the last 12 months. We were over 3 in u. S. 10year gilts a year ago. But if we look at where we are now, rates have declined for a good reason. We have a broadbased, Global Industrial slowdown. You just mentioned german factory orders. That is a perfect microcosm of what is going on there. What is the fed doing in reaction to that . They are cutting rates. The old mantra of dont fight the fed would be very supportive of the front end. If you look at the last meeting in september, we heard the fed saying we will cut if the data get worse. I think the ism surveys last week indicate at least the industrial data and the service side are getting worse. So more cuts support the front end. Alix but it feels like we didnt get that kind of fed talk friday from jay powell. Heres what he had to say after the jobs numbers. Chair powell unemployment is at a halfcentury low, and inflation is running close to, but a bit below are 2 objective. While not everyone fully shares Economic Opportunities and the economy does face some risks, overall the economy is, as i like to say, and a good place. Alix that doesnt feel like a particularly dovish fed. What do you make from it . Gene in a way, he has to say that. His report card has two very simple factors, unemployment and inflation, and they are both in pretty good shape. But what you want to listen to our, one, concerned that the weakness we are seeing abroad or even in the u. S. On the industrial side could be bleeding into the precious consumer side, which is really the backbone of growth at the moment, and the other thing is listen to the comments that clay rita that clarida and others have been making at the fed on making up shortfalls from its inflation target. That would mean the fed funds rate would stay lower for longer. Alix fairpoint. Jay powell did also talk about that in the q a. ,e get some auctions this week 3, 10, 30 year. Im going to pull up the bid to cover ratio of all of them. The trend is what you care about over the last year, down, down, down. Would you step in and be a buyer . If so, where . Gene if you are going to be a buyer, tuesday fives is where you want to be buyer, twos to fives is where you want to be. Just because the data may be challenging globally doesnt mean the curve has to be this flat. Even at the end of 2008, the curve was substantially cheaper. Alix what you make of credit spreads . They are staying relatively tight, even if we are seeing these tracks that the fed are going to have to respond to. What is your take on that . Gene credit is really a mixed bag. Credit spreads overall are not cheap, but you have a real bifurcation. We talked about the industrial side slowing down. Thats definitely true, and is the characteristic of recessions. You look at 11 postwar recessions, and in every event we saw capex and fixed investment decline. You want to be avoiding those cyclical, capitalintensive areas at those times. But what you find is in about 50 of recessions, Consumer Spending continues to grow. What we just talked about supports the fact that the consumer is in good shape, so the consumer can weather this storm. When you look at credit, it is not cheap overall, but if you can be tilted more towards consumer and services and away from the industrial side, i think you can be in pretty good positioning. Alix so play that seem throughout. I want to take a more holistic view if you come inside the ustbund on the spread. Gene it should continue to narrow for two reasons. If you look globally, 80 of the income and the global bond market comes from u. S. Issuers. I think that is a skew that is unsustainable, and i think it is something that should start to compress partially from u. S. Yields coming towards german yields. Also potentially from german yields coming a little bit higher as the ecb potentially focuses on other tools like qe rather than ever lower Interest Rates. I do think you will see that compress. Alix are you playing it . Gene we do actually have that exposure in our multisector portfolios. I dont think it is something you just want to have on environment and forget about. It is something in markets where you see that spread widen out, you want to take it vantage of that, and i think that is an opportunity to add duration in the u. S. And reduce it in europe. Alix on friday, kind of under the radar in the u. S. Because of jobs day, it has to do with former ecb officials coulds housing with the ecb has recently done. As former central bankers and european citizens, we are witnessing the ecbs ongoing crisis moment, the suspicion that behind this measure lies and intent to protect heavily indebted governments from a rise in Interest Rates is becoming increasingly wellfounded. That is a very staggering statement for a number of reasons. What was your take on that and how that plays out into how policy could evolve . Gene i agree with your reaction to that. I think the free rider effect from any Monetary Policy is always real. I think that is true whether you are reducing Interest Rates or if you are asset purchases or quantitative easing. When you look at this specific example, what this does is set the stage for a very interesting challenge for the new ecb chair lagarde when she comes in to address what she thinks policy can do, and also be honest about the things it promises it probably has limitations on. Alix it raises the specter again a fiscal stimulus, where it could happen. The officials that were commenting on this negatively came from countries like austria, germany, that are much tighter with their fiscal belt. Are you playing this fiscal loosening theme everyone keeps talking about . Gene not yet come about i think there will be a time. Ironically, those are the countries that need to fiscal help, but they also have the fiscal space. If we do see a time where a german stimulus package comes through, that could definitely be investable, but we havent seen it in a long time, for good reasons. There are real cultural impediments to doing that. I think it will take a long time. It is a shame because the country really is in recession at the moment, but the fiscal side has not yet reacted. Alix to rounded outcome of what you feel like is your most under the radar trade right now two rounded out to round it out, what do you feel like is your most under the radar trade right now . Gene opportunities really have to be focused away from things that are globally manufactured, traded, exported. I think you want to be away from autos and miners and cyclical areas like that, but if you are looking at areas that are domestically sourced, domestically construed beaded, to mystical consumed, that could be food and beverage, telecom. These are areas where there is opportunity, and you have some companies delivering and paying debt down, and that is something we want to be involved in. Alix really enjoyed talking to you. Thank you very much, gene tannuzzo of be afraid needle. Now it of columbia threadneedle. On we want to get a check the news outside the business world. Heres Viviana Hurtado with first renews. Viviana Kansas City Fed president says there is no need yet to ease yet. North korea and the u. S. Agree on how talks in sweden and the u. S. Cant agree on how talks went over the weekend in sweden. The Trump Administration call the talks good. North korea has been pushing the u. S. To ease sanctions at the same time its been staging missile tests that are seen as provocative. The white house even turkey the green light to invade Northern Syria in the coming days. Turkey will go up against Kurdish Forces that had been allied with the u. S. And the fight against the islamic state. That marks a possible reversal for president donald trump. Hed warned turkey of economic devastation if it attacked kurdish troops in syria. 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. Im the jan art out of im Viviana Hurtado. This is bloomberg. Alix coming up, his 100 billion vision fund holds stake in the worlds biggest tech startups. More on softbank in todays wall street beat. Check out tv. You can watch us online, click on our charts and graphics, interact with us directly. This is bloomberg. Viviana this is bloomberg daybreak. Coming up later today on balance of power, robert ray, former federal prosecutor. Now to your Bloomberg Business flash. Hong kong exchanges will reportedly raise its offer for the london stock exchange. According to the times of london, the Hong Kong Exchange receiving conditional support from some key shareholders. It wants to complete its own deal, it 7 billion takeover of data provider with in it if provider refinitiv. Digital currency libra will miss its launch date. The initial price equals a 30 chance of the cryptocurrency meeting the timeline. Europes economic troubles are getting worse. In august, german factory orders falling 0. 6 , twice as much as forecast. Demand has fallen for 15 straight months. Im Viviana Hurtado. Thats your Bloomberg Business flash. Alix thanks so much. We turn now to wall street beat. First up, hsbc cutting 10,000 jobs. The interim ceo ramps up aggressive Cost Reduction. Softbanks son is embarrassed by his record. Theres no excuse for japanese occupant hours for falling short. Advice fore mds women dealing with career challenges. Joining us is bloombergs sonali basak. Lets start with hsbc. How much more can they cut . Sonali thats only about 4 of their global workforce, so maybe more overtime. 4000 of those cuts are from their French Retail Bank they are already selling, so there could be a lot more here over time, but it is a very Decisive Action by the interim ceo. Alix usually dont think of interim ceos making big moves like this, but it also highlights if you get 2 3 of your revenue from asia, why do you have so much of your staff in europe . Sonali totally fair point, especially when asia is growing faster. He said days ive days after he took over that there would be more Decisive Action underway. A read from get investors what they want to see from hsbc . Sonali this kind of job cutting or Cost Reduction in general is something people wanted to see all over the place at hsbc. However, if you think about job cutting right now is something we are seeing in a lot of major global banks in the european area in light of brexit and whatnot. Alix fair point. The second story , what did you learn in this interview . Sonali i thought it was quite self effective to come out and say hes embarrassed. Obviously hes gotten a lot of heat lately. Its not that much different than what you heard for about a month ago with the portfolio a privately held companies, that he was to see them turn a profit factor. We are differently seeing the little to change in tone. Is not just uber and wework. People are looking at the entire ridehailing portfolio as well. He did say in this interview to be a little patient with uber and wework, that in 10 years they will be profitable, but that is different than what he asked if portfolio complete last month. Alix which is kind of what you would expect them to say after they filed a perspective. Investor, i know when they will be fine. Just relax. It is different than what hes told the rest of his portfolio companies, to be in better shape. Alix i also wonder how this winds up being for a second vision fund. There are questions whether saudi arabia is actually going to be an investor in that. Theres all these reports about how it is basically forcing employees to have a stake in it, at setter. You wonder stake in it, etc. You wonder that world actually play you wonder whether that will actually play risk. Sonali he really wanted to start turning things into the Public Market commode is not only were difficult with the markets we are seeing, but more difficult as people have a stake in the portfolio companies. Alix is this going to make Smaller Companies harder to be . If you wind up having a big nine like this a big name this being a little more slow rolling, not taking out as much, is it harder to get your foot in the door . Sonali now we are going to see repricing potential in the market. Alix lets get to our third story. You interviewed Sarah Schwartz carlisle. Talk about who she is. Sonali shes just become a partner at carlisle. Real estatell secondaries. She talks to investors all over the world and helps them buy in the real estate market. Real Estate Private equity has really grown into a very robust market. Blackstone, carlisle, kkr. They all have massive real estate funds. Like stone is raising their biggest right now. Her job is to help investors get exposure to them. Alix what was the biggest takeaway of the market . Sonali that it is the late stages, but she did draw some significant parallels, saying most people are now selling their stakes to get a more balanced portfolio rather than rushing, so she does have a sense of what stage of the market we are, but is not too concerned. Say heres what she had to , and some advice for women. Challenge anyone who says you cant do anything. Just go forward and keep your eye on what you are trying to accomplish. Alix give us the readthrough for that conversation. Sonali she was saying, say yes. Beal available to do a lot of things. I think her advice is interesting because it is not the advice ever but he gives. We spoke to the ceo of russell investments, and her advice was to be strategically selfish. There are people that say be ready to jump into the fray, but have are people that say another lifestyle. Theres a range of opinions thats really important. Alix especially with the levels they are at. She was just made partner, eitz. S michelle s we look at an industry that doesnt have a good track record of having women. Our last story, 8 of investing professionals are women. For her to rise in private equity is a very different thing from maybe the rest of asset management, which has seen a little more women rise to the top. Alix thats an excellent point. Thank you so much. Coming up on this program, the eu signals some pessimism as prospects for a brexit deal fade. We will discuss how trade and sterling are in todays traders take. If you are heading out to your car, tune into Bloomberg Radio on sirius xm channel 119 and the Bloomberg Business app. Kisses bloomberg. This is bloomberg. Alix some breaking news regarding brexit. A scottish judge refusing to grant the orders sought by lawmakers. The lawmakers have basically wound up passing something that forces Prime MinisterBoris Johnson to have an extension of brexit through the end of the year. That is encase he doesnt get a deal in the next seven days, which does not necessarily look likely. Currently, a scottish judge appears to have ruled in favor of Boris Johnson not having to do that, that he wont be imposed by that law forcing him to require an extension if he cant get a deal done. This very much dovetails with what Boris Johnson rode over the weekend, saying, we will be packing our bags and walking out. The only question is whether russells cheerily waves us off with a mutually agreed to deal or whether we will be forced to head off on our own. Joining me now is vincent cignarella, voice of the bloomberg audio squawk. You said you want to deck a look at cable in the index before this headline even broke. You obviously see the cable rate down on this. Really good timing. What are you looking at . Vincent what i want to introduce if you havent seen this before, there is a function on the terminal called btst. It is basically a back test of an asset class. We put cable into this, into the btst function. It defaults to the most profitable trade over the recent period. I put it into a three month to narrow it down a little. One year gets other two busy. You are hearing from people all the time, you cant trade sterling. Thats all good if you are an economist, but if you are a trader or investor, you have to make decisions regarding the pound. What the function does is it will show you what the best trade function over the last three months to use for sterling, the most profitable function. This is a moving average oscillator. When you look at the oscillator, it puts you into the trade, into a short trade near the highs. Function. E btst if you click on any of the tabs on top, it will isolate the ones that you want. In the moving average oscillator function, it will show you where the function is set to go short, where to cover and go along, and right now it is actually neutral. So if you think about it over the last few months, you see cable between 1. 20 and 1. 25. It is pretty much a 5050 proposition driven by the news we just heard. We are looking right now at may be a harder brexit, so going to be a little interesting if you continue to trade cable over the next few weeks. Alix and the point, you can actually trade it. Vincent its a little frustrating when you hear economists and such saying you cant trade it. Leave it alone. You have to. Not hedging something is actually taking a position. Alix also very true. Vincent you cant go blind. You have to do something. And this is a good function. Alix i actually did not know that function. Thank you very much. You can listen to vince on the bloomberg. He starts squawking at around 9 30 and goes through the bell. He talks you through all the trade and market moving events. Coming up on the program, Abhay Deshpande joins us on the program. Little jitterya for u. S. Markets. This is bloomberg. Alix welcome to bloomberg daybreak on this monday, october 7. Im alix steel. The u. S. Will stand aside when turkeys military launches an offensive against americas kurdish allies in syria, a significant shift in u. S. Policy. Turkey considers the kurdish militants a threat to its national security. China doesnt want a trade deal as big as the one President Trump would like. Negotiations resume this week. Bloomberg has now learned the chinese will not offer to reform policies that the u. S. Has complained about. [indiscernible] alix in hong kong, activists want to follow up a cow to quicken with more instructions a chaotic follow up weekend with more demonstrations. A second whistleblower may emerge with a complaint against President Trump. A lawyer representing the first intelligence official to come forward says they are now representing several whistleblowers. The second individual says he has firsthand knowledge of the july call. In the markets, the weakness is really in the u. S. Equity markets. S p futures off by 0. 2 . Is bad news bad news this time around . Eurodollar goes nowhere, despite terrible factory orders and european sentiment. 10 year yield goes nowhere after the big steepening the last few days. Crude getting a pop. Probably geoPolitical Risk priced in. A lot of wait and see as we get into trade. Joining with the hour is ed hammond, bloomberg senior deals reporter. Thanks for joining. Ed good morning. Great to be here. I assume youre sundays are you hanging on the phone, hanging out with your 22 month old. Ed bang i assume on. Alix so what are you think about today . Ed i think the big story will still be about softbank and what is happening in the ipo market as a result of some of the bad things theyve been behind recently. Slack, and the whole wework debacle which im sure will continue in the headlines. Theres a lot of money that needs to be put to work. This another 100 billion that has to be found somewhere. As we mentioned earlier, trade talks are resuming this week. Larry kudlow, National Economic council director, spoke to bloomberg friday. He said protests in hong kong could actually affect trade talks. To kudlow we continue monitor the Hong Kong Freedom and democracy movement, which the u. S. Supports very strongly. That could impinge on those talks. Alix joining us now, stefan selig. Ofserved as undersecretary International Trade for the department of commerce under president obama. Who has the upper hand . Stefan the president has often said trade wars are easy to win. We are wellpositioned to do that because the size and strength of our economy. In part, that is true, but there are also real costs to our economy. The chinese have real cards in their hands. Presidency doesnt have a reelection president xi doesnt have a reelection coming up. He essentially controls the media. Any copulation has a level of patience as the u. S. Continues to face pressures around the tariffs. I think both sides have an interesting set of cards in their hands. Ed you say easy to win, but what does winning look like here . Stefan it depends. The administration has said they are looking for a comprehensive deal or a complete deal, to use the word the commerce secretary has recently said. That means it will be about fundamental reforms in the chinese economy and state support of those businesses, which makes it very difficult for u. S. Companies to compete fairly. If it is going to be a narrower deal around the purchase of agricultural products, maybe limited Market Access in certain industries, that is going to be a much longer road, and unlikely to mix ignatik in progress around those topics on this thursdays meeting unlikely to make significant progress around those topics in this thursdays meeting. Ed if there was limited access to certain industries, or some tightening up of ip regulation, the idea that somehow china is going to reverse its industrial policy and its own ambitions for made in china seems very farfetched. Stefan i completely agree. That is really at the crux of the issue. At the heart of the Chinese Communist partys control is their control of the economy, to give are not likely that up anytime soon, in the same way that we wouldnt fundamentally change our economic system. Alix what do you make of how external factors play into this, like impeachment, hong kong protests . It seems like the longer it goes on, the longer the u. S. At the margins wind up getting drawn in. How does that factor into how china looks at trade versus how the u. S. Looks at trade . Stefan im not sure that anyone of these things is going to have such a profound effect. If you take eds point of view that it is really fundamental, the levers that the chinese are going to be willing to deploy are going to be available to them. I think they view it as noise. Our approach has been confused and somewhat incoherent to them. We are focusing on our bilateral trade deficit, which is somewhat nonsensical from their perspective and something that is out of their control and our control. I think this is this is creating confusion more than anything else, and is not going to affect the negotiating structure and strategy for either side. Ed we had jp morgan safety next round that comes into effect could be worth 1000 for every american family. Is that something trump can stand if he is going into an Election Year with confidence . It seems like a huge hit on the average consumer. Stefan those are based on huge levels of tariffs that may come into effect in december actually happening. Weve seen already tariffs have been pulled back and delayed numerous times. I think we have to get there to see that happen. Indeed, that is true. Tariffs are expensive. Not just how it is going to affect u. S. Consumers, but it has affected u. S. Taxpayers with the billions of dollars of support that had to go in terms of agricultural support to our farmers because the Chinese Market was closed to them for a period of time. Alix in terms of soybean farmers, they are going to care more about the 3 million tons, not so much on how their iphone will go on cost, but it is a fair point. Ed and in particular, and this is one of the issues with trade generally, the benefits of trade are diffuse. Everybody gets their things a little bit cheaper, whether it is iphones or toys and shoes. However, the costs are profound and specific. When factories go out of business, when communities suffer because of unfair trade practices, that concentration really creates a level of politics that makes it quite difficult. Ed let me ask you this. What do you think is more important for trump and his party . Is it being seem to get a victory over xi and win this trade war fight, or actual meaningful economic benefits for the u. S. . Stefan theres politics, and theres economics. I would say the administration was quite right to focus on these issues with china, which previous administer rations hadnt focused quite as much on. Countriescontrol of of companies has created a nonlevel Playing Field for u. S. Businesses, which has hurt us. We had the benefit of lower Interest Rates, the benefit of lower goods like iphones and other things youve mentioned, but theyve taken our jobs and our knowhow. I think that is been perceived to be not a great trade in retrospect. We will see how it plays out. Your old you put on Investment Banking hat for me . What would you be telling an investor or a company that is in china right now . Stefan this is going to be a time with a lot of uncertainty, and that uncertainty is going to keep people sitting on their hands a bit. Would you make a significant investment in china now . Of course not. The president just last week talked about limiting bilateral capital flows between the two countries, having chinas Investment Limited in the u. S. And u. S. Investment limited in china. Hes talking about potential prohibitions of Chinese Companies listing in u. S. Exchanges. I think people will be very harry about this, and that will be a real problem for the chinese. We talk about china being the second biggest economy in the world, which it is, but on a per capita basis, they are still trying to become a developing economy and have gdp north of 10,000 per capita. They are still much less wealthy then we are in the west is the country. In order for them to actually get there, i believe they will have to be integrated into the Global Economy in a sick way. Alix in a significant way. Selig, thank you very much. Though. Call him stefan, is it the accent . [laughter] alix joining us now is up a deshpande,is abhay Centerstone Investors founder. Do you take risk off . What are you doing . Abhay im going to defer to stefan on all of this. Hes way more knowledgeable about the macro. Passe right now, but the interesting thing about these days is all of this macro noise, or i guess more than noise, is impacting the economies at this point. It is creating opportunities for longterm investors. Thats overlaid on top of the National Economic cycles and stock market cycles, so specifically youve seen a big hit to industrial companys around the world. I think you saw some news recently about germany, its protracted manufacturing recession. That really started a year and i half ago with china and has moved throughout the world. Now the United States is sort of the last man standing, and it is also falling. With that comes opportunity. Ed but cut through the noise. Cut through the macro noise and some of these that are really struggling. Where are the opportunities . What stocks are you looking at . Abhay you still have to be selective. You need to worry about the amazon risk and the balance sheets. You want your exposure in secular, but cyclical, growing end markets. We look at things like 3m, for instance, which has done terribly the last couple of years, trading at reasonable midsingles, not multiples. A business that is going to be amazoned out that is exposed to a variety of end markets not doing so great. Auto is probably the most impactful. China, they do have about 15 exposed to china. Alix we will get to specific pix in a second, but on a broader basis, Jp Morgan Says a recession could happen, but you could still see a drawdown within the equity market, but in order to have some kind of really big shift into value, into cyclicals come out of defensive, into emerging markets, youve got to have some kind of huge event. Do you agree with that . Abhay im not sure. If theres a huge event, everything gets cheap. You have to remember come of the United States is not what it was 30 years ago because of a lot of this trade flow thats happened. The United States is way more serviceoriented. If you look at recessions in the United States, theyve been caused by one of two factors. One is an inventory cycle. The other is a financial crisis. Inventory cycles were because you didnt have line of sight to what the channel looked like years ago, but now youve got amazon and all this stuff. When you have excess inventory, you can see it. So the price adjustment, the price discovery happens almost instantaneously. So that factor is less of an issue, i think. What you end up having is an financial problems. I think the u. S. Banking system is fine. Cycle is not going to be the cause. What you have probably things that look like recessions without the typical outcomes of skyrocketing unemployment and so on. So it may be just status quo for now. Deshpande of Centerstone Investors will be sitting with us. Apparently hsbcs interim ceo will seek the job on a permanent basis. Ed this is him swinging his ax before hes in the top job, but yes. This is not hugely unexpected if you look at the size of their workforce, the pain some of the european banks are going through. Deutsche stands alone in a class of awfulness at the moment, but the other european banks, there is read across. Hsbc is one of the top 10 banks in the world by assets. It hasnormas significant business in asia. They have higher earnings biggest us in asia earnings business in asia, so those questions about whether they need this many boots on the ground in europe. Alix coming up, earnings season kicking off in just a few days. How investors see the health of corporate america, coming up. This is bloomberg. Alix we are officially headed into earnings season this week. Wall streets biggest banks out next week. Still with us, Abhay Deshpande, Centerstone Investors founder. This is small cap, midcap, and largecap earnings estimate. The large story, large caps have not rolled over, small and midcap have. What do you think . Abhay i think it bins on what part of the economy we are looking at. The industrial cycle is not great. Globally, it looks like europe is bottoming out. The order of entry is defining the order of exit for the manufacturing cycle, with the exception of china. China is still baselining. The auto industry, they are trying to clean up the environment, shifting from manufacturing to more service. Some of that, they cause it themselves a little bit. If you look at other parts of the economy, whether here or in europe, the to domestic and local economies are doing just fine. Anecdotally, if you go to a restaurant, you still have to wait. I travel a lot around the United States. You have your erie, pennsylvanias of the world that are suffering, but theres been a pervasive rebound of 10 years ago. We are not booming, but it is a pretty decent environment. People have jobs. I dont again, we are talking about Recession Risk and all that stuff earlier. From a numbers perspective, you will see a 0 gdp or something, but i dont see a great impact, which means it is probably good news for earnings. Ed how do you play that bifurcation between the u. S. And europe . You have some companies that have very similar customer bases and sizes and trade completely differently. Is there opportunity for a fund like yours . Abhay what is nice about europe is that when you do have that kind of dislocation, the buyers show up. We had a few takeouts earlier this year. Merlin and the u. K. , for instance, kind of like a disney of europe, theme parks and whatnot. They run legoland. Its listed in the u. K. , really a danish asset. That is something thats been taken out. As you continue to see these disparities between valuations in the u. S. And highquality, Multinational Companies listed in europe, i think you will start to see private buyers come in and arbitrage that. Day because say m a you are not long behind me. Always fascinating for us is the fundraising environment. A lot of people are trying to do different things. Softbank raised 100 billion. What trends are you seeing . Abhay the wework thing scared a lot of people. If that was publicly traded, you would have seen a gigantic stockmarket crash. Only one. The you see the actual ipos. I think theres a bit of rethink, i would hope so, from some of the money that has flown into these equity houses funding these startups. Analogy, it draw an is a bit like 1999 in the sense that you had Business Models that were not cash flow generative coming to market to early. In the case of wework, theres really even meant to generate cash. Its got a flawed Business Model because of the mismatch between asset and liability. But at least they have a real business. It is not as extreme as the late 1990s. But with these coming to market, maybe it is causing a rethink. I would imagine, i would suspect if you are looking at the marketplace as a whole, not just private markets, you would see in the Public Markets, you have a lot of really cheap cash flow generating assets that are sitting in plain sight. Some of them might not be growing 50 a year, but cash flow yield of 8 , 9 , 10 solve that problem when you have a modest amount. Of growth. You see that increasingly around here. Alix thank you so much, Abhay Deshpande of Centerstone Investors. Coming up, it is the 18th week of unrest in hong kong. We will get the latest on the ground next. This is bloomberg. Viviana youre watching bloomberg daybreak. The union for striking General Motors workers say talks to end the walk out took a turn for the worse, stalled for the request for more u. S. Factories. The union says gms response to the latest proposal did not address sticking points such as job security. The National Basketball association trying to diffuse a political firestorm in china. The league apologizing after the general manager of the Houston Rockets tweeted support for protesters in hong kong. That tweet led Chinese Companies to suspend ties with the team. The rockets are one of the most popular nba teams in china because of its former star yao ming. That is your latest Bloomberg Business flash. Alix thank you so much. Staying in hong kong, its the 18th straight week of protests. Sophie kamaruddin is at causeway bay, one of the busiest hong kong shopping areas. Where do we from here . Sophie i met one of the rallying points for the gathering that is supposed to take place tonight around 18 districts. There is chanting going on around me, singing the anthem glory to hong kong. Some are Wearing Masks in defiance of the law that was put in place on friday as part of the Emergency Powers. This is a very different scene from what we are seeing across the harbor around Prince Edward station, where hundreds of protesters have congregated. Riot police are out on that scene. Tear has been deployed. This is there is growing frustration as to what actions carrie lam may take, given that the council has yet to reconvene. There is expectation as well that she might use more measures under the emergency ordinance, such as introducing a curfew or perhaps even limiting internet access. Tonight it is a little more subdued than the protests we have seen. , onst want to highlight forums like telegram, there is a poll among protesters on whether they should purchase paid in more violent activity. 77 of those said they should take a break tonight. Alix sophie kamaruddin, thank you very much. I feel like it is still ipo world in hong kong, but other than that, how do you go to that country and operate . Ed it is really tough. My little brother just moved their month ago. Guess how much time hes spent writing about finance . Zero. All protests. Alix coming up, the biggest threats to businesses. We will break that down. This is bloomberg. Alix this is bloomberg daybreak. I am alix steel. We made it to monday. It will be an interesting week. How we are shaping up in the futures market. S p futures down off the lows of the session. Europe is up. Yup the dax up. 1 despite the fact that Investor Sentiment in europe is terrible. And you have factory orders in germany truly terrible. Domestic orders let the lows. That is not reflected in euro dollars, up. 1 . You have less safety in the currency market. Yields go nowhere in the u. S. Or in europe. Points as a12 basis doubling of where we were last week. Crude up 1 , that is maybe a geopolitical issue, china pulling out of the gas project in iran. Maybe tightening screws in iran having an impact. The news over the weekend was about the potential of a second whistleblower said to have come forward over trumps involvement with ukraine. There was no response from the white house over the weekend. Kevin, what can we expect now . Kevin the white house is digging in. The president is putting out a message of business as usual. He will have lunch with mike pompeo later this afternoon and he is said to have an event with the first lady with military spouses. Republicansill, sticking by this administration, with the exception of a few folks, including senator met romney. All in all, republicans saying this is a political effort to hurt the president. Democrats saying a second whistleblower could give credence to the original whistleblower report. The administration tried to say that report that was released just the other week is largely political. The bottom line, this is largely in the political front and has not moved into a constitutional effort. This matter will likely be wrapped up by the end of the year, i am told. Ed the one area where it was not business as usual was Bernie Sanders campaign where he suffered a heart attack. Do you have any sense of what that means for his campaign for the democrats . Kevin lawmakers on both sides of the aisle wishing there well was his their well wishes to Bernie Sanders, a candidate who has been at the top of the polls. He released a plan that he says would curve money in politics. He represents the political left. That said, when you look at the polls, and i do not to suggest there is any suggestion he will get out of the race, but when you look at the polls, many of his supporters second choice is joe biden. There has been a misnomer that Bernie Sanders voters are Elizabeth Warren voters. They are more up for grabs. Should he ever get out of the race, it would shake things up. Elizabeth warren continuing to emerge at the top of the polls in early caucus and primary states like iowa and New Hampshire against joe biden. Alix great point, combating the rhetoric we are hearing. The 2020 election is just one of the few risks confronting the globe. Of global Risk Assessment firm came out high writing highlighting the risks for businesses. Climate change, geopolitical shifts, and geopolitical vulnerability are tops. Joining us is scott stevenson, the man behind the report. U. S. Politics, impeachment not on the list. What you make of that . How do your clients think of Something Like that . The geoPolitical Risks we talk about relate to business interruption. What is the possibility or oil will be attacked . What is the possibility or license to do business will be taken away . Your assets will be nationalized. Isething meaningful for us there is a form of data nationalism, which is growing up. Governments are trying to figure to keep faith with their citizenry with respect to issues of privacy. Different countries are making different decisions with respect to do data have to physically reside in our country or only our country . Privacy standards, etc. These are the kinds of things we think about when we think about geopolitical issues. What is happening with respect to a particular administration in any country at any moment. That is not a function of what we do. Ed we have been in this environment for so long, these big existential risks whether brexit or the middle east. They have existed and people have factor that meant and continued to do business factored them in and continued to do business. What is different . Scott which risks . The macro risks . Ed you have so many risks that we talk about. They have existed for a long time. My question is are any of them enough to unseat the market . Scott you have to distinguish between shortterm and longterm. If i were to say which of the risk categories is most impactful in the short term, i think it is by for risk. A business that has chosen to automate its methods and build a Business Model in a digital way, in the long term i think it is the climate system that is the biggest risk. Facts of what is happening in the climate system. There is more co2 in the atmosphere. The ice caps behave differently than they used to. The temperature of the surface of the world is greater than it used to be. Seas is greater than it used to be. You have these separate observations, together they can mean the Energy Potential of a hurricane or the probability that hurricane forms is going up. Those who are impacted by those kinds of events need to prepare. Alix that is a conversation, particularly for the oil community. You also brought up ai that includes what we heard from microsoft about iran potentially hacking the 2020 election. That is potentially an election cycle, but that is a broader issue of the next edge of international warfare, which is cyber. Utah company you should protect against cyber, but what you do . You cannot spend all your money on it. Scott you have to spend enough money. Alix we were talking to see if those who say we could spend all of our money and are still problems. Scott you are managing a risk when you talk about cyprus risk about cyber risk, but specifically with ai, one of the things businesses need to be aware of is that when you harness these methods, you are training the machine to interpret based upon data which is drawn from experience. You have does two things that can go on. Hardwire some of the biases of the past. If there has been causeandeffect based on certain factors and we do not want those factors to arbitrate who gets access to financial services, then you have to not let the machine perpetuate what has been the case. Secondly, in the world of ai, one of the risks a business runs is that your logic is a black box dear constituencies, to your customers. Are they happy with that . Do they want to be dealt with that way, or you need to find a way to open up the logic . More broadly on the cyber points, and you were talking about what can companies do, there are the traditional Ways Companies have responded to cyber risk, which would be you think about perimeter defense and your technical environment. That is very good. But if you look at the events which have hit companies and been material in terms of what has happened to them and interruption of their ability to provide service, two things are significant. Company depends upon software provided by a third party. Everybody is using software someone else writes. The people that write the software have the best understanding of whether or not there are vulnerabilities in the software. They are routinely trying to describe to their User Community , we have spotted this, here is patchge, usually called a , and you should patch our version of your software. Our companies diligent in doing that . If you look at big regions, that was not done in a timely way. The other thing is, in what form do data sit in your data stores . You could send me your personally identifiable information and it can land my database, but i can use data methods so it is completely deidentified, and a bad guy had nothing they can make use of. It is a standard i think Companies Need to hold themselves to. This amazingkly, statistic from your report that global trade in services have fallen ins 2008 58 since 2008. Global trade was it has declined and you have nationalist tendencies. Does it swing back from here or is it downhill all the way . Scott i think companies have to find a third way. The first way was an export model. Make it here, send it there and sell it. The second way is you create a lot of National Organizations that are doing the same thing. In a world which depends upon digital methods, i think you have to find a third way. You can actually assemble expertise and create methods that will work around the world, but you have to find a way to also make them relevant and safe and applicable market by market by market. I do not think it is an export model and it is not a multi domestic model. It is a blending. The reason it does not show up as much is it is complicated. It takes more energy to make it work. Alix fair enough. Scott stevenson, thank you very much. Great to get your perspective. Now i want to get an update on what is making headlines outside the business world. Viviana north korea in the u. S. Disagreeing on how toxins sweden went. Pyongyang says it does not want discussions with the u. S. Until it withdraws its hostile policies. The Trump Administration called the tops good. China wants to narrow the scope for any trade deal with the u. S. Beijing signaling it is broad trade reach a agreement pursued by President Trump. Negotiations are scheduled to resume. Bloomberg has learned the chinese will not offer to reform industrial policies or subsidies. British Prime MinisterBoris Johnson is not backing away from his threat on brexit. The Prime Minister repeating his pledge to take the u. K. Out of the eu on october 31, if necessary without a deal. Johnson got a boost from a Scottish Court that ruled in his favor in a case trying to force a brexit delay if he cannot get a deal. Global news 24 hours a day, on air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am Viviana Hurtado. This is bloomberg. Alix thank you so much. Coming up, the next step in larry culps turnaround plan. Cutting tensions. The next more on ge. Interact with the charts on gtv. Check it out. Viviana this is bloomberg daybreak. Im Viviana Hurtado in the hewlettpackard enterprise greenroom. Power,p on balance of Nextgen Climate action cofounder and democratic president ial candidate. Now youre Bloomberg Business flash. Hsbc looking to cut thousands of jobs. The british banks proposed sale of its french Retail Business could take at least 4000 people off the payroll. Streamlining good lead to a total of 10,000 job cuts, that is about 10 of hsbc workforce. The interim ceo now wants the jobs on a fulltime basis. Will reportedly raise its 3. 5 billion offer for the london stock exchange. The Hong Kong Exchange received Additional Support from key shareholders. The London Exchange rejected the initial takeover proposal last month and said it wants to complete its own deal. That is a 27 billion takeover of refinish to. Bloomberg competes with refinit iv. Bloomberg facebooks currency libra will miss its launch date. Price equal to a 30 chance of the cryptocurrency meeting that timeline. That is your Bloomberg Business flash. Alix time for bottom line. Well take a look at three Companies Worth watching. We are joined by emma chandra, sonali basak, and brooke sutherland. We will take a look at uber that just got an upgrade from citigroup. Emma uber rising 3. 5 in the premarket as it gains a new full over at citibank. The analyst upgrading the stock to a buy from neutral and raising the price target to 45 a share. That is below the average analyst price target but would mark 50 increase in where cooper closed on friday. Why is citigroup making the change . They say cooper they say ubers fundamentals will come back into focus and we are expected to see an acceleration in revenue growth. Citibank says to change sentiment on the stock. Sentiment has been negative, trading around 30 a share. It went public at 45. While investors have been negative on the stock, analysts are more positive. Holds, and5 buys, 12 just one cell. Alix and how many of them worked on the ipo . Ipo up, hsbc and the and the job cut their. There. Job cuts sonali analysts are starting to absorb the news of cutting 21,000 jobs. The interim ceo is one of the succession candidates to take over as fulltime ceo. Bloomberg reporting he wants the job fulltime. Goldman sachs analysts are predicting the restructuring plans are more radical than what we have seen with his predecessor. Alix thank you so much. The Third Company we will look at is ge. Brooke sutherland is here with more. Will this be enough . Brooke is anything ever enough that she . No at ge . No. This does go toward capping one of their liabilities. The pension shortfall, as big as it is, is subject to Interest Rates, the plunge in Interest Rates raise the odds that would swell significantly. This puts a cap on how much ge will be on the hook in the future. It has to come as a slap in the face for the employees. Ed this is great for larry culp, he has been a year and the job, happy anniversary. He has done a lot. He has been aggressive. Off. Hares are still what does he have to do to get this company back up . Brooke the difficulty is he has done all of the big things. He sold off the assets that could be sold and at this point there is nothing obvious that could be divested. You start to get into complicated transactions that take time. Now youre in a position that you have to grind it out. You have weak cash flow in the businesses. You have to get that higher. That will not be done overnight. That is deeprooted cultural change. You also have to avoid a recession which could be problematic for ge. You have to keep chipping away at this debt load. These actions are painful and take time. Jonathan ed what about transparency . That is another thing. Could he not do that as a way of shortterm suasion of some of their concerns . Brooke i would agree with that. Theres a lot more that can be done in terms of improving the Financial Statements and the way these companies are run. Investors want to see how the different corporate costs get allocated to the business unit. What with the aviation be on the hook for as far as pension and debt . What is their true underlying cash flow number . We do not have those details and ge has made incremental disclosures. That is one point where investors are still craving more from larry culp and that is something he could do. Alix when you say they just need to grind it out, we might hit a recession in 2020. As the conversation going to be i wish they had those diversified businesses, they should be a little bit bigger. Brooke that is a key point and one reason people push back on an ipo of the health care business. Health care tends to have better cash flows than aviation which are longer cycle businesses and not good cash flow assets. They are capitalintensive. Ge has a new jet engine they are rolling out. They decided to hold onto some of those health care assets. That does help. You are losing the cash flow from those biopharmaceutical assets. Alix thanks a lot. Brooke sutherland of bloomberg hammond, thank you for hanging out. S p futures are falling. Where we could be headed in todays technically speaking. If youre jumping in your car, two to radio on sirius xm channel 119 on the Bloomberg Business app. A headline crossing President Trump is losing the court fight to keep tax records secret from york. More on that. This is bloomberg. Alix time for technically speaking. Bill maloney, voice of bloombergs equity squad joins me. A big day friday. Where do we go from here . Bill a very big day on friday. Close back above the 50 and 100 levels. Futures down you want to look at levels back to the 50 day, 2942. The top of the turn we talked about last week, around 2940. The hundred day at 2927. Resistance levels are fridays close. 2952, and the high, 2954. Alix do we bounce around between the 50 day and the 100 day . Bill you are in the no mans land. Alix we are taking a look at carnival. That stock getting a downgraded hsbc. You walk us through . Bill i will walk us through when i bring it up. The carnival stock has been hammered over the past year. 70, was trending around you can see the downward sloping 200 day moving average. It was cut to hold it hsbc. You want to look for support back to 2016. It brings you around 40 or 50 or so. If that fails, youre looking at the 2014 low, brings you down to 43. Stock is still ugly, but avoiding 2014 lows. Alix the last stock is e trade. Looking at 0 fees. Also getting upgraded from ubs theyneutral to buy, and have the Business Diversity to help them weather that storm. You will a look at a stop here. Bill another stock that has been hammered. If you look back a year or so, stocks up 2 in the morning, you had a huge selloff on the fact that schwab was cutting commissions to 0 . That level may be a shortterm support level, but if we go back you can see in this trading range. Look for 3940 to be the next level of resistance. Alix thank you very much. Good to get you set up for the trading day. You can listen to bill maloney on the bloomberg macro squad. Hear him talk from 6 00 a. M. On. That doesnt. Coming up that does it for us. Coming up on the open, with jonathan ferro, Mohamed Elerian will be joining him. Four days until the trade talks take off. This is bloomberg. Happy monday. 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. Jonathan from new york city for our audience worldwide. Im jonathan ferro. The countdown to the open starts right now. Jonathan coming up, equity markets inching lower ahead of this weeks trade talks in washington as chinese officials signal they are looking to narrow the scope for a deal with United States. Defensive dissent. Fed president s are not ready to support further easing. With 30 minutes until the opening bell, good morning. Here is your monday morning price action. Futures negative eight points, well off the lows of the session , down. 33 . The euro reapproaching 1. 10 on eurodollar. Issue. Egin with the big china looking for a trade deal. Scopena has limited the of their negotiation topics. The chinese have come out with their first opening gambit for the straight discussions. That means whatever deal they come uph