It is the insurers and medical providers doing so well today. Unitedhealth group up 8. 6 . Medical loss provision was not as bad as anticipated. It was actually better than forecast, and that has all of those insurers higher. Johnson johnson saying it is not setting aside money for those court cases it is going to fight, and will win thousands of them, according to johnson johnson. The 10 year yield moved quite a bit in the session, back after a holiday yesterday, 1. 75 on the 10 year. Guy letsguy take a look at where we are in europe, dominated by the brexit news over the last few minutes. The pound spiking up on the cable rate against the u. S. Dollar towards 1. 28. The ftse 250, the more to mystically focused market, also spiking. When it comes the more domestically focused market, also spiking. When it comes to the ftse 100, some names spiking sharply. As you can see, a strong response to the headlines being reported out of brussels. Apparently, eu negotiators and breasted negotiators out of the u. K. Are closing in on a draft deal. Optimism is rising that there could be a breakthrough before the end of the day. Lets bring in our panel to discuss what we are learning and what it means. Hillman, International Trade commission, and Chris Watling of longview economics. If we do get a deal, what is your expectation as to the type of deal we are going to get come on a spectrum of hard brexit to soft brexit . What do you think this looks like . Alison i think it looks somewhat jennifer i think it looks somewhat closer to hard brexit, but the good news is it would have a transition period, which is what the whole world needs to see. Chaos really creating a very strong downward pull on the economic growth. What is it do for the ability of everybody to have a bit of a transition to figure out these complicated customs arrangements and other things that need to be done. Guy a deal that provides some degree of structure and astanding for investors deal now . Talk me through the implications economically. Chris what the u. K. Needs now is certainty. ,ven if there is no deal theres uncertainty. There is certainty. The way the ftse is reacting is sort of telling you that. Assets and the u. K. Are very cheap, and that money coming in, certainty coming back, is very good for the u. K. Economy in aggregate. Vonnie whatever this deal involves, we have scotlands scotlandsrgeon sturgeon talking now. Where would that leave Something Like the good friday agreement . Jennifer this has obviously been one of the things that everybody has been struggling to figure out. People like me and others that live in the trade space that are constantly asked can you do this kind of arrangement where you sort of have Northern Ireland and the Customs Union with the eu, and sorted in the Customs Union with the rest of the u. K. How would you do this . How would the border controls actually work . Can you do what Boris Johnson has been proposing . The honest answer from many of us is we cant tell yet until we can really see it written down and try to understand how with these kind of border checks work. We in the United States have spent a lot of time looking at how we organize, for example, the border between the United States and canada, where you have many of the same aspects of the Northern Irelandireland border, with many crossings over a long stretch of miles, with a need to do checking, but not letting checking get in the way of a very cordial and integrated economy between the u. S. And canada, for example. We dont know whether any of those kinda procedures can be done between Northern Ireland and ireland. I think that is going to be the real test both for the European Union and whether or not this can get through the u. K. Obviously, it is very problematic for the dup and others if the perception is that what is actually being created is a hard border across the irish sea, and whether or not that is happening is going to depend on whether the rest of it can be made to work. So we are all going to be looking for this text to come out. Vonnie exactly. If it is not specific on any of these questions, if it talks about a backstop and may pushing the can down the road on that, is there an impact on economies worldwide, on economies locally . Jennifer i think some of that is also going to depend on what is then the future relationship between the u. K. And the eu, and those negotiations havent even begun yet. It is going to depend on how far and how closely integrated to the eu regulatory policies remain with the u. K. , how much can you continue to engage in the Global Supply chains that are moving product across not just the ireland border, but how much is it going to be easy for companies that are Building Product in the u. K. To be able to ship it and move it without regulatory barriers, without significant tariffs, into the rest of europe . If all of that comes about, either as a result of this deal where a result of the future negotiation, then i think you will not see as much tension over these border issues because youre going to continue to see consistent trade and movement of goods, services, people, capital across those borders without substantial barriers. If that is where we end up, i think that would be a good outcome across the board, but whether that can be achieved in the face of brexit i think is a very real question for the british voters to be asking. Guy chris, lets come back and examine the british economy from another angle. There have been some suggestions that were read to get a brexit deal come of the bank of england would be looking to raise rates. Given the global backdrop we find ourselves in, is that a realistic prospect . Do is, like most other Central Banks around the world, the most scenario the bank of england cutting rates . Chris i think they should cut. Clearly, most Central Banks are cutting, with the exception of norway in one or two others. If this continues, that reduces the Inflationary Pressure in the economy and imports a little bit of deflation. The Global Economy is slowing. It would be madness to hike here. I think there is clear argument for a cut, and the more cuts, the more you soup that argument. You get this you support that argument. You get this virtuous circle. Guy in many ways, the exit process should be the easy thing to do. The longer term relationship and finding stability there is a much more difficult path for both sides to tread. Do you have any clear understanding of how that is likely to develop . I know we dont understand what the deal is like here, but lets assume it is a starting point that allows, as youve indicated come of the relationship to be reasonably cordial. What do you think the longterm relationship will look like, and how long do you think it will take to stabilize . Jennifer obviously there is some sort of hard redline on both side. Clearly, what the European Union has made clear from the beginning is what it cannot look like is exactly what it would mean to be a current member of the eu. If you are simply allowing the u. K. To leave, but to get all of the benefits, and primarily those benefits are those Single Market benefits, meaning the Free Movement of goods, capital, services, and people, in order to come up with some sort of agreement, they will have to be an arrangement that will put some sort of constraint on some or all of those movements to some degree. That is really going to be the trick. How much of a degree as theyre going to be of restraint . I think it is about a lot more than tariffs. Obviously, tariffs are going to be a very significant issue, but i think the harder one and much more difficult one to work out is the degree to which all goods and services in the u. K. Continue to trade at standards and pursuant to regulatory measures established in the eu. That is where the real barriers are going to come to trade. If there is a significant divergence between those, then youre going to see a lot of delays and difficulties with trade in those areas. Those are not easy to resolve. As you may recall, the United States and the European Union were engaged for quite a long time in negotiations under the transatlantic trade and alliance partnership. The barrier to doing that deal would be the alignment of regulatory barriers. That is where all the money is. And yet, that is by far the hardest thing to do. The reason those talks failed is it is too hard. It is very hard to do. Guy looks like we still got some work to do. Jennifer hillman and Chris Watling are both staying with us. We still probably need to talk about the other big trade story that is out there between the United States and china. That is coming up next. In the meantime, we need to check the markets. Here with the details, abigail doolittle. Abigail take a look at the s p 1. 1 . The u. S. , up the possibility of a brexit deal adding to the gains. Interestingly, the ftse 100 flipping between small gains and losses. Some of the big banks weighing, hsbc and lloyds of london. However, the broader index up. Theres a bit of a relief rally around the possible draft brexit deal. The turkey etf up 1. 6 . If it is a relief rally there after the worst six days since march after the u. S. Put additional sanctions against turkey. The pound is really the big mover on the day, striking sharply higher on the day, spiking sharply higher on that headline of the possibility of a draft brexit deal. On the month, the pound timing for percent, the best monthly performance since january 2018 the pound climbing the the bestmbing 4 , monthly performance since genuine 2018. Stocks. S moving into as for health care, the best day since january 2018. Unitedhealth shares up on the first time theyve boosted the fullyear view this year. Jp morgan putting up a very strong quarter. Trading revenue helping out. Blackrock also putting up a solid quarter. Inflows for both cash and fixed income strong. Vonnie thank you for all of that. Remember, the function gtv allows you to browse all of the recent charts featured on bloomberg tv. Catch up on analysis, savior analysis, save your favorites for future reference. This is bloomberg. Guy the irish Prime Minister over the last few minutes giving a press conference, not on brexit, but hes being asked about brexit. Let me give you some of the responses. Brexit progress is being made. Unclear if a deal will be ready by thursday, wendy eu summit starts in brussels thursday, when the eu summit starts in brussels. Johnson said he would be confident of getting a deal through. Im not sure if that is referencing the British Parliament brussels, but a few more hurdles to go the British Parliament or brussels, but a few more hurdles to go. The pound trading at an elevated level relative to where it is been of late. We are currently on the cable rate at 1. 2771. Vonnie parliament will apparently have to come in on saturday for one of very few occasions in history of ever having to do that if this were to go through europe, in order to meet the requirements of the benn act, so we will see what happens between now and thursday. Lets check in on the first word news. Heres courtney donohoe. Courtney an agreement to end the General Motors strike may be near. The ceo is in the room with negotiators for the company and united auto workers. The strike began more than four weeks ago. President trump from mr. Big sanctions on turkey for its military campaign in syria President Trump promised big sanctions on turkey for its military campaign in syria. The administration is calling for a ceasefire in syria, but not a turkish withdrawal. Its a sign of how far apart the u. S. And china are on trade, despite the handshake deal. Bloomberg has learned beijing will struggle to buy if 2 billion of u. S. Farm goods unless it removes retaliatory buy 50 struggle to billion of u. S. Farm goods unless it removes retaliatory goods, which it would only do if the u. S. Removed tariffs. 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. Vonnie thank you. Brexit headlines continue to drift out, and it does look a little more positive. Us, Jennifer Hillman, Council Senior fellow, and Chris Watling come along view economics ceo and chief market strategist. Varadkart minister leo is speaking irish Prime Minister leo varadkar is speaking. He says that he would not ask the eu to copper mies on ice in the market, happy with eu flexibility on brexit, but there are more hurdles to go. It does seem like something is going to get done by thursday. The british Pound Holding onto most of its gains at 1. 27. Lets set that aside for just one moment and get to our china trade news. China have the news that will only begin to buy those agricultural purchases if the u. S. Agrees not to put on tariffs in december, and indeed, to roll back some of the tariffs already in place. How likely is that, Jennifer Hillman . Jennifer it is very hard to say because what we do know is that, notwithstanding the announcement from president that there was a deal, no one within the Chinese State media described as the deal. Basically described as progress in the talks. What we do know is that anything comes of what happened last week in washington, it is going to take three to five weeks to even write it up as an agreement. All that happened so far is that the United States agreed not to increase some of the tariffs , which would have otherwise happened this week. That was the only promise made on the u. S. Side. The only promise on the chinese side was additional purchases of agricultural products, along with some unspecified provisions on currency transparency and inlets will property an intellectual property. It is very clear that china is not happy, that they have not gotten anywhere close to what they want, which is a guarantee that the u. S. Will not put additional tariffs on, and they want to roll back some of the existing paris. And it is clear some of the existing tariffs. And it is clear that if these tariffs do go on in december, 98 of all chinese goods coming into the u. S. Will be subject to these very high additional tariffs, so we are pretty far apart at this point and dont even have the on whether we have an agreement. So really unclear how we get there. As jennifer says, a lot of ambiguity around exactly where we are, but even the clarity we do seem to have only speaks about a status quo situation. The chinese would like the u. S. To roll back some of these tariffs. You can almost understand why. Take a look at what is happening with the chinese economy and the Global Economy. The status quo as we are right now is causing the Global Manufacturing sector to enter a recession. You see it from the United States, europe, and china. In order for the Global Economy to turn around, we need ds collation rather than just status quo on those tariff deescalationneed rather than just status quo on those tariff numbers. Chris possibly. I thick markets are starting to disc out to discount the negotiations. There was some sort of agreement , whether a proper agreement or half agreement, we dont know, but youre moving in that direction. I think the markets have gone from very riskaverse not long deals closer two to coming together, the brexit deal perhaps faster. Bad, global is manufacturing is bad, but the worse it gets, the more monetary loosing we gets for the fed and the rest of the world, and the more you stabilize the Global Economy. We are in this very unusual situation whereby the fed is being very reactive, and more reactive the worse the trade deal gets. That is why we are seeing such good performance of the s p. They said on friday it wasnt qe. It is not officially qe, but it is liquidity, and theres an awful lot of it the fed is now producing. Vonnie it is so cloudy, though, the outlook. Isnt it . Jim bullard saying theres not , the fed should make it clear that even though it doesnt need to cut, that it would do something in an emergency. If we get to the point where we need something done in an emergency, that is a very precarious situation to begin, isnt it . Chris the reality is whatever the equity market sells off, we pricing more rate cuts in the fed funds futures curve. If the market rallies, we price them out. It was saying early this year it wasnt going to cut it all. Last year it was still raising rates. The fed funds futures market continues to be way ahead of it. It wouldnt be an emergency cut. It would just be a natural outcome of where the market is telling it to go. We can see already from your bloomberg work function, theres a very High Percentage chance of a cut at the end of this month. Guy and another in december. Jennifer, lets talk about where this ultimately ends up going. What are the chances of a lighthizer deal, i. E. Everything included . Is that possible if you take a step back and look at this conflict between china and United States as more of a geopolitical conflict . Jennifer i think its hard to see the deal in the sense that this started out with u. S. Chinas state owned enterprises and subsidies, concerns over forced technology transfer, over intellectual property theft. That was the understanding of what the u. S. Wanted. On those goals, they had a lot of the rest of the world with them, even if the rest of the world doesnt support this unilateral tariff tactic weve gone down. The deal now being talked about doesnt touch any of those issues, so i think it is pretty clear that if we dont see a deal that actually removes the tariffs are really rose us back, we are going to have to see a lighthizer kind of agreement with all of those things being addressed. We were relatively close to april, before the chinese walked away from that deal. Part of this depends on whether those in china, the reformers and those who see this as bringing benefit to china, when the day, or whether the hardliners to china, win the day, or whether the hardliners, which will prevail. This is one of the few things were trump has sort of bipartisan support in the United States to be tough on china, so i think there would be a huge push back if we walked away from this without getting any significant reforms on subsidies come on state owned enterprises, on tech transfer. That kind of a small deal that really only affects china buying more u. S. Stock in the u. S. Getting a few bells and whistles is not going to go down well with many of those that have been encouraging a strong, tough deal. Vonnie jennifer, thank you for your time today. Counsel ofllman, u. S. Trade relations senior fellow. And Chris Watling, longview economics chief market strategist. Guy pound is trading higher as we head into the equity market close. The ftse 100 underperforming, the 250 trading sharply higher. The close is next. As bloomberg. This is 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. Guy 30 seconds to go until the end of regular trading in europe. European equities you can see, continental markets up and up strongly. A strong risk momentum on both sides of the atlantic. Today the stoxx 600 trading up. The s p in the states closing close to the 3000 mark trading close to the 3000 mark. Why is the ftse 100 not up . The brexit headlines out of brussels that are seeing the pound spiking higher. 1. 28 and then we faded back from that. The markets getting a little bit more cautious in terms of some of the headlines after that the earlyreaction to headlines we saw around half an hour ago. A big reaction in the pound, taking some of the wind out of the sails of the ftse 100. Lets take a look at the ftse 100 than the ftse 250. The ftse 100 is up only. 1 . The ftse 250, a reflection of the u. K. Economy the ftse 100 has global minors, it has the oil stocks, has multinational. The ftse 250 much more domestically focused, it is up by 1. 5 and responding strongly to the brexit headlines. Continental markets up 1. 2 . The cac 40 trading up 70 points. I want to highlight some of the movers on the ftse 100. You need to break out between domestic and international if your revenue stream comes from outside the u. K. , the pound goes up. If you are a Domestic Bank or a domestic builder, you want trading strongly. British land up 6 . , if borislities Group Johnson gets a deal you will not see the naturalization of the utility sector. United utilities trading up on the back of that. Ecurities trading up Lloyds Banking group up 5. 61 . Baron Development Trading up. The bank of scotland trading up strongly. Outperforming the overall market. Domestically facing stocks are doing well on the back of the brexit headlines. You take a look of the market on the emaar function on your bloomberg on the mrr function theour bloomberg, it is miners, largely dollar denominated revenue streams. Big global company. Lactose myth klein. Glaxosmithkline. Dhp, unilever, all of the kind of companies. A split within the ftse 100. Yet the International Revenue stream, you are trading lower. If you are domestically focused in the u. K. , you are seeing a big pickup. The move to the downside not as big as the move to the upside. The ftse 100 completely split on brexit lines. Brexit dominating the european. That was a look at the european close. Vonnie a dampener this morning after bloomberg reported that china was saying the u. S. Would have to not impose december tariffs and start walking back other tariffs in order to buy the full amount of agricultural purchases that have been talked about. When wepener went away started getting earnings from banks, admittedly not all of them were good or beat but it was enough to get the party started. The brexit headlines helped as well. The s p 500 not breaking through the 3000 barrier just yet, still up 1. 1 . The dow up more than 1 . 1. 75. Year yield, a little bit of money coming out of bonds. Safe haven yen, 1. 0 879. A little bit of weakness, but as you said, we are seeing the Brexit Developments hit u. K. Markets. You can see that in the currency movements. Not too much of an outflow. The euro is only. 1 stronger. Quite clear that euro traders cannot see this as much as a positive as sterling traders, at least for the moment. Back into the s p 500 and what is causing the rally. Managed health having a big impact. Up as a growth. It all got started with up as a group. It all got started with united health, who said medical laws provisions were not as markets look for. That is good for the insurers. Kbw banking index up to percent. Goldman well off its lows of the day. Guy we will see what happens. Lets get back to the brexit story. A potential breakthrough between british and eu negotiators. They are said to be closing in on a draft deal. There is optimism there could be a brexit breakthrough before the end of the day. We will wait and see. Lets get the latest on what is happening. Lets go to brussels. Maria tadeo joins us now. What are you hearing . There was huge momentum going into this deal for the first time in weeks. Every major stakeholder in this negotiated, from Michel Barnier to the irish to the french were all saying this was a serious proposal that they would seriously consider, and there was still time to get the deal. What we understand is at this point both delegations, the eu and the u. K. Are working on a draft deal. The hope, this is the best case scenario, that this is done before the end of today and can be presented as a legal text tomorrow for each european leader to look at and sign off on thursday. That is the make or break brexit summit. The problem, and this is the biggest issue, is that the europeans do not want to go further until it is clear and the Prime Minister can put on the table and insurance he will be able to get this deal through the u. K. Parliament. That is the biggest issue. The europeans do not want to move further until they are sure this will clear the u. K. Every time it has been put to a vote, it has been rejected. That is the concern from european perspective. Vonnie in response to reported questions the irish Prime Minister said the response to the customs gap was wide. What does that tell us about some kind of resolution on customs . Maria this is the area where the europeans would probably expect the u. K. To make big concessions, which then Prime Minister johnson will have to spend have to present differently. This idea there will be checks in the irish sea and Northern Ireland would be treated with something former Prime Minister said would never agree to, to essentially treat the United Kingdom as not a single unit but as different ones with different regulations and keep a part of the u. K. Closely aligned to the European Union. The customs has been the biggest sticking point, the idea of consent of the Northern Irish assembly was also a big sticking point. We do not have a lot of clarity around those details, but customs is the area where the europeans wanted to see concessions from the u. K. It is also the area that could become problematic for the Prime Minister because he has to present this as a good deal and he needs the votes from the dup to get the deal done. That is also the biggest concern from the europeans when push comes to self. When push comes to shove. Will he be able to get the deal to the u. K. Parliament . Otherwise we are going back to square one. Guy we will leave it there. The last Time Parliament sat on a saturday, the falklands war in the early 1980s. Thank you very much indeed, maria tadeo. Lets get another assessment of what is happening here. The director of the National Institute of economics and social research in our London Bureau for the 2019 monetary and financial policy conference, where he is also launching an on Monetary Policy and the progress over last 20 years. You are a busy day. Certainly are. Guy clearly at the moment the devil is in the detail in getting the deal done. Once the deal is done is the devil still in the details or is the certainty for the u. K. Economic perspective to show much higher once a deal is done we can start to make progress . The u. K. Economy can move on . What you are seeing in markets is a relief. The relief with which the europeans look as though they are nudging toward a deal, the extent to which the u. K. Has moved a little bit to offer a deal is reducing a chance venoco brexit. That was really worry the chance of a note deal brexit. The 2 change in the Exchange Rate and the 10 reduction in the probability of brexit. That is the real relief we are seeing. Terms underome which we may put in foreman agreement and the next day, we take it back to parliament. That may lead to a further extension. It may not be possible to do it by the absolute deadline of halloween, it may take longer. The fact that the sides are nudging closer together tells both sides that we may find a soft brexit from the eu. That has been the central case through this, from the beginning. It was important that Northern Ireland was kept in a way that did not lead to any sort of border with ireland itself, to maintain the terms of the good friday agreement. That is why we have always felt we would end up with a soft brexit. The relief we are seeing is that return to that situation we have anticipated. Guy when i talk to international investors, they tell me they are waiting to invest in the u. K. You talk to ceos of big companies. We are not investing now, we are not prepared to reinvest because we do not have certainty. How big is that potential investment into the u. K. . What could the dividend look like for u. K. Plc . Jaglit you are right to say that it looks like investment has stalled since 2016. There has been no appreciable change in the level of Business Investment going to the u. K. We might typically see that increasing 10 to 12 per year. That does not mean that even if we find a deal or form of exit everybody agrees upon, that resolves the uncertainty holding back the investment, by which i mean what kind of deal what we have with the eu that lasts, not for just some transition, and what type of relationships will we have is an open trading relationship with rest of the world will take some years to develop. It will not be an immediate turning out of the dams. The absolute disastrous form of exit may not occur, so you can start to think of another relationship. Clarity is still some years away, no matter what happens over the next few months. Vonnie earlier today the current bank of England Governor Mark carney said there was time for there to be a promise for a new governor to found and there would be an orderly transition. I bring this up because in these reports, you wrote one called a governor for our brexit times. If you were to be the new governor, what would you advise the new governor to do in the case of a brexit . Jaglit what the governor must do, and as any central bank wishes to achieve as its Main Objective is to ensure monetary and financial stability. That means the Financial System has to be sufficiently wellcapitalized with sufficient levels of liquidity and access to lines in the event of a set of shops, and work out what instruments it might used to stabilize the economy following very large supply shop from a note deal brexit or the less expensive shock from some other form of exit. What the central bank has to do is say we will carry out the Structural Reforms to the Financial System and ensure there is sufficient stability in the system to ride the shops. The shocks. N the shocks come along and deciding what level of asset purchases we might want to entertain, as well as making statements about what policy might look like in the event of further shocks or other events that happened in the future. It is about reassuring people. That is what the Central Banks job is and i would expect the new governor to be able to do that whenever he or she is appointed. What tool would you use if you are trying to solve this problem . Mark carney what we care banks are not making a big bet on that and they cannot be called out by doing wrong. The pound is only going to move up or move down. The big banks cannot be wrong. Themselves banks would be asking themselves which way is the currency going to go, how volatile is it, what kind of positions can i take to ensure i have sufficient access to liquidity, either from dollars or from the european for the euros to ensure my position is not exposed by Sharp Movement in sterling. We have not seen, even though sterling has been very volatile since the referendum, problems emerging within the domestic backing system, appropriate levels of swap lines have been open and banks have sufficient liquidity to back that. There is no sense in which sterling itself cannot be exchanged for other advanced currency assets to do with any demands the Banking System may have. That is what we want to have in place, despite any particular impact on the economy that might result from the former brexit. Guy as we negotiate the next few years and United Kingdom, there are certain politicians who talk about using the bank of englands Balance Sheet as a political tool. You have launched an ebook talking about this very subject and im curious as to how you see the applicable relationship the relationship between an independent central bank, its Balance Sheet, which has a relationship to goldman and how the government views that Balance Sheet. How will that work . Jaglit it is the critical issue facing Central Banks. What we had in 2009 Central Banks said how will we continue to stabilize this economy. The tool almost universally adopted were asset populate asset purchases, mostly in government debt. Little was to reduce longterm Interest Rates to provide stimulus to the economy. These patches were based on the central bank Balance Sheet and expanded the Balance Sheet. Now we see Balance Sheet in the range of 20 to 30 to 40 . Huge by precrisis standards. That particular response was supposed to be temporary. We will do with this temporary crisis by buying these bonds and eventually they will find their way back into the private sector hands. It turned out there is quite a lot of demand for these bonds in perpetuity in the sense that central bank Balance Sheet were not to that level before. They may go 10 to 15 in the long run but the fact that central bank Balance Sheets have been expanded has opened another policy tool for politicians. They may say youve done it once, you can do it again for another political directive i have in mind. That should not be about a political objective or something that should be the responsibility of the politicians, which might be things to do with infrastructure expenditure or offsetting the effects of single policies or thinking about how you might impose green taxes. Those are questions for politicians. Iveentral banks job, as been saying, is about trying to provide conditions of stability in the economy, not providing for instability by using the Balance Sheet to support politicians whims. Vonnie thank you so much. An absolute pleasure to speak with you. I would urge everybody to keep an eye out for those surveys and that publication. Guy lets take a quick look at the settlements. U. K. Stops settling over the last couple of minutes. It has been a bumpy last couple of hours. Volatility across the various Asset Classes piping sharply higher. The ftse 100 finishing lower, but the pound has spiked fire. Comment on markets, more of a risk on dread. The ftse 250 has risen as well. We will carry on the conversation on the cable. I will be joining Jonathan Ferro on dab Digital Radio in the london area and around the world on all of your bloomberg devices. This is bloomberg. Guy from london, im guy johnson. Vonnie from new york, i am vonnie quinn. This is the european close on bloomberg markets. Stock of the hour is jp morgan. Shares are rising after fixed income revenues jumped 25 . Investment banking indices rose unexpectedly, making jp morgan the bestperforming bank today. There were four that reported. Taylor riggs has more. Taylor as you can see with jp morgan, it is all about the fixed income revenue. We are at 25 . That rose from the 25 level up to the 50 and 90 level, and the vix help to contribute to some of that. We take a look at equity, volatility in the market. Goldman sachs posted a 6 rise in trading revenue. Some of the volatility helping the banks. On the others of this picture, you are getting other mixed results. Citigroup posting higherthanexpected expenses of 10. 5 billion. That is concerning. Wells fargo continuing to see fallout from the litigation, posting a 1. 6 billion dollar charge for litigation expenses. We are awaiting their new ceo to come in and another week or so. It is all about the tech sector for me. We did get a few mentions of wework and uber with Goldman Sachs taking a hit for the write down from Companies Like uber or other bats in the public and private market that did not go over so well. Then we are trying to get some more details on wework. No impact yet on the Balance Sheet. Jp morgan trying to shrug off all concerns about wework and sing their exposure is not material. Guy it will be fascinating to see what deal gets taken by wework. Visit the jp morgan deal or the softbank deal . Taylor riggs joining us with our stop of the hour. Coming up we have the battle of the charts. That is next. This is bloomberg. Vonnie it is time for our global battle of the charts. You can see the charts on the bloomberg. Ust run gtv kicking things off is romaine bostick. Romaine we are kicking off her earnings season. If you want to get a sense of why the s p is at a record high, this blue line youre looking at is the s p eps growth. You can see we have a little in 2016. Ssion back once it came off of those lows, this pattern you are seeing on the blue line, that corresponded directly to the gains we saw in the price index itself. As that went up, you saw everyone was feeling good about things. As we got to the end of 2018, you can see the blue line flatten out and plateau. That is where a lot of the concern came in. When you have the s p ratios now 20 times earnings and you have that plateau in that earnings growth, there is concern that white line, that cannot hold unless you see that blue line begin to trend backup. Unfortunately, analysts looking for a drop in eps growth. 3. 7 . Even if you factor in the typical beat rates on yet on eps, you will get flat growth for the quarter. Vonnie the urgency of that presentation gave me chills. You have me scared. Guy, what will you do about it . Guy im am talking about fireworks. What kind of an explosive story will we see over the next worker the next month . The brexit headlines dominating the day. Center, story front and but over the last hour it has been the brexit story. The white line is the oneweek employee volatility for the cable rate. The blue is the onemonth. While the onemonth has spiked up, the oneweek has absolutely shot up. This is a chart that goes all the way back through 2018, back to november. Fireworks night in the u. K. What we are seeing is the market implying we will see a lot of volatility over the next few days in sterling. The implication from the market is we are getting close to something very substantial happening or completely the opposite direction. The market, while it is willing to take price directional bets on sterling, it is much more convinced we will see a big move one way or a big move the other in sterling. You can see that in that white line. Vonnie this is exactly what mark carney said and guy fox, your namesake. I think that is wonderful. But i will award the Winning Ticket to romaine bostick. Coming up, it is balance of power with david westin. Ashton carter will be on the show. David from bloomberg World Headquarters in new york, im david westin. Welcome to balance of power, where the world of politics meets the world of business. On the brief today, Kevin Cirilli in ohio, the scene of tonights democratic president ial debate. Chapterdon, the latest in the ongoing saga of brexit. Sally bostick on the kevin, what are we expecting tonight. Three things kevin three things, will any of the democrats take on joe biden . He has lived in the polls but his neck and neck with elizabeth warren. The Biden Campaign urging democratic contenders not to go after hunter prided who boat who broke his silence in an interview with nbc saying he should not serve on International Boards and said he used poor judgment for accepting that position with Ukrainian National gasny
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