Transcripts For BLOOMBERG Bloomberg Markets European Open 20240713

Anna dup says no. Sterling slides. Northern irish allies cannot support the brexit deal as it stands. By billion to shareholders 2022 as Sales Estimates are missed for the Third Quarter. A president ial meltdown. Pelosi accuses donald trump of hurling insults at her after lawmakers criticize his withdrawal from syria. Republicans say the speaker was at fault for walking out of the meeting. Good morning. Less than 30 minutes until the start of cash trading and equities. Is almostng the pound all that matters for the moment. Every minute it seems we get a new headline on brexit. I just heard you talking to and the poundra, has come down. It is weaker in dollar terms. 127. 56. We will no doubt have this chart up for most of the day and most of the week, and maybe most of the year. Take a look at teachers. We do see a mixed picture with weakness in the pound comes a little strength. Dax futures and cap futures are down. If you look at u. S. Futures, S P Dow Jones and nasdaq many contracts also trading down. We are seven hours ahead of the u. S. Open on wall street. Anna lets remind ourselves where we have been on the brexit story. When we watch what is happening with sterling, we see the sterling market, stock equities moving on every twist and turn of the brexit saga. U. K. Domestics very attached to this story. The ftse 100 has seen a negative correlation. This remains a market moving story. We have seen these headlines, to go to suggest reasons doubt the deal comes through. The main sticking points remain when it comes to the dup. It looks as if ground had been made up but perhaps that is not the case. The arithmetic remains difficult. What are we hearing from brussels . I am sure that is their main concern, and what can Boris Johnson even do to win over the dup . Anna to give you the latest signs on what the dup has said, they have three objections, one is customs and the way custom checks would be conducted. Vat is a late entry into the area of disagreement. Consent remains a big issue for the dup. And was topical last week in Northern Ireland, and it remains so. It looks overnight that progress had been made, but maybe that is not the case. The u. K. Government reacting to what the dup has said, and says talks in brussels are still to come. They have somewhat of a holding statement. The dup does say conversations with the government are ongoing. We look for those conversations to continue. Lets get a market perspective. Great to have your perspective. It is exhausting watching the breaking headlines as to whether a deal is close are not. The market is focused on this because october 31 looms. This could get kicked into next week or beyond. It is an ongoing saga as many people are calling it. It shows how big of an issue the irish border is. This issue has been an underlying problem since day one. Adding parliamentary approval for it, theresa may got scuffled three times. It seems there is a lot more work to do to convince the dup that this is worth signing on to. Matt it is amazing we do not see more of a reaction in the pound. I know there is a lot of volatility, but if the dup says no, what is going on . Do you think there is a lot of action in the currency . We have had so much good news ,his week that any setbacks they seem to have overcome them. Everybody is a little cautious. The response we have seen makes sense, but if we get in the coming hours and later in the day were the dup is not on side, the move lower we have seen in sterling that has been modest will gain traction as the day goes on. Dup, any negotiating partner says no until they say yes. We have no idea if they will say yes. We will keep glued to the bloomberg feed to see if we get any further update on their position. The way the stock market has performed recently, u. K. Stocks have been lifted, they have been lifted by expectations of a deal and we see them moving on that. Is that something you focused on . Largecap u. K. E. Tocks move with the pound as it goes lower, though stocks go higher. The midcap stocks are the ones that become interesting because they will rise if we get more optimism on a deal and more resolution. There is a bit of a dichotomy. Still, the main way to gauge brexit sentiment is to look at the currency. What we have seen this week is optimistic. Richard jones, you go back to your keyboard and we will look for your updates. Mliv go on the bloomberg to get his updates. Lets get to an earnings story, eriksson has raised its sales target on signs that spending on a new five g network is speeding up. They have reported thirdquarter results that beat analyst estimates as u. S. Authorities seek to limit huaweis influence over 5g. Eriksson has picked up contractors. Joining us now is borje e. Ekholm, president ceo, telefonaktiebolaget lm ericsson. What kind of increase are we looking at in terms of 5g orders . The fiveyear penetration is rapidly gaining momentum. And over the last two years it has been accelerated by over a year. We see the drastic acceleration of demand of 5g. So far that is driven by north america. Lso korea those markets are driving the 5g demand now. I know youk want to talk about your business and not problems other businesses are having, but do you see evidence of the huawei affect . Is there any evidence about putting your numbers . Borje we cannot see any impact in our order books as of today. , the geopolitical situation has caused more uncertainty, and i would be more uncertain than normal. That is more of what we are seeing. We are not seeing any positive news from this. To see anyou able increase in margins as well . I know a lot of times in order to gain market share to get an edge over your competitors, you will have to give better prices. O customers how do you see margins developing now . Borje we have seen during the or i should say, part of our strategy we laid out in 2017. In important part was to gain market share. We already invested in taking contracts and new market shares. What we tried to do, take contracts where we have a clear competitive advantage and technical advantage. We have seen we continue to gain contracts. Very positive in the longterm, but they may impact the Third Quarter. It is a marginal impact, a small impact. Forward, we seem no dramatics compared to the Third Quarter but we will continue to take those contracts. Confidenceo you have to upgrade your guidance today even with the backdrop of trade tensions threatening Investment Decisions . Why have you decided to be as positive as you are . Borje a couple of reasons. Is the increase of 5g in the world. 5gare seeing big demand and demand developing in other parts of the world, the middle east and asia. We see slow pickup in europe. We see a number of opportunities. Acquisition made an which is safe to us. See a headwind from the currency. When you add that together we forecast toed the 20 billion kroner. Matt borje e. Ekholm, president ceo, telefonaktiebolaget lm ericsson, thank you for your time this morning. Eriksson with earnings at a revised forecast to the upside. Rocky road. Levers we will get analysis of their earnings next. Bloomberg radio is live on your mobile device or dab Digital Radio in the london area. Tune in. This is bloomberg. Anna welcome back to Bloomberg Markets european open. 15 minutes until the start of the equity trading day. But see futures expected to rise because of weakness in the pound. Word get a bloomberg first news update. President trump is defending his decision to pull u. S. Forces from northern syria. He is fine with letting russia filled the void. The president says it is a lot of sand. RebukedParty Resolution the decision. Secretary of state mike pompeo is blaming turkeys president for the crisis. Volvo is electrifying its lineup and footing the bill for customers to plug in. They are launching their all electric vehicle and has a plan to shrink its carbon footprint. It is coping with a global sales slowdown. To cut costs, is merging with a chinese parent company. Profitabled to be but in low volumes you have to understand the cost level will be higher. It might be a lower profit wegin initially, but what believe is that an ev car will have a higher value for the longterm it the is the right thing to do. You need to earn more to be rich, according to one metric to get into the top 1 of u. S. Taxpayers. You need to earn more than 500,000 a year. Since 2011 that has gone up by a third. The only group that beat those gains, people who are even wealthier. Global news, 24 hours a day on air and at tictoc on twitter, powered by 2700 journalists and analysts in more than 120 countries. This is bloomberg. Matt thank you very much. Sales for the Third Quarter trailed estimates, rising 2. 9 . Most analysts are forecasting higher than 3 . The company maintained its fullyear targets of growth at the lower end of its range. Lets speak to one of those analysts now. Alicia forry, consumer analyst, investec bank. What is the problem matt unilever . Atwhat is the problem unilever . Can they get back on track for the full year . Alicia i think it is a bit of a challenge, but the guidance implies there is no need for growth to accelerate in q4. It is worth pointing out that q3 had a very strong comp, a very tough comp. We had good weather in europe which boosted ice cream sales. There were better numbers from brazil that made it tough this quarter. This is a disappointing result this morning, and management needs to show the market that it has a plan for accelerating growth. What does the Product Portfolio look like to you . Food, of course, and increasingly beauty. Where should the business be focused under new management in developing the portfolio . Have an unusual structure in this business. This is an historic reason for this. This combination worked well when they were first breaking in. Now that unilever is entrenched in its emerging market, the rationale for keeping food and health care together has been reduced. It is possible that longerterm there may be a bigger move, but in the meantime what they are doing are the right things. They are focusing on premium brands, acquiring in that space for nietzsche brands for niche brands. They have made about 30 acquisitions over the last 3. 5 years. They are taking actions to diversify their portfolio better, but there is more they can do to streamline as nestle has been doing. Matt what do you want to see before you make a decision to buy more shares . What does unilever have to do to convince you this is a stock to buy . Business, is a great but the issue with unilever has been this tradeoff between growth and margins. What we need to see, the pendulum has swung too far in favor of margins, so we really need to see from the new ceo what his plans are for turning around the Growth Profile of unilever. It is starting to lose momentum versus its peers. We want to see a credible plan in place for how he intends to reverse that situation. Matt alicia forry, consumer analyst, investec bank. We are minutes away from the open. We will talk about stocks to watch. Another consumer name, nestle, ae food giant plans to return giant amount of dollars, 20 billion to investors between next year and 2022. We will explain. This is bloomberg. Anna welcome back to Bloomberg Markets european open. Five minutes until the start of the Equities Trading day. Lets get the individual stocks in focus. Annmarie hordern is looking at ericsson. We are also covering nestle. Swedish two companies that move in different directions, eriksson raising the 2020 forecast. They beat, sales came in soft. Get to sam on nestle. What is the story . Sam as you mentioned, nestle intending to return money to shareholders, 20 billion which is significant. They are also creating a division for m a, they are looking to expand and make deals , and return money to shareholders. Much. Thank you very you can get the latest stock stories from our Equities Team by going to first go on your bloomberg, and get the first word news on your mobile app. Coming up, the market open. Brexit is skewing the scale. Stay tuned. This is bloomberg. Matt we are a minute away from the open of cash Equities Trading this morning across europe and in the u. K. Lets get over to Annmarie Hordern in london with a runup to the open. Annmarie msci asiapacific, asian equities a doll session. We did see a dull session. S p 500 futures pointing to a lower start. Oil down 0. 9 . Chart increase in u. S. Stockpiles sharp increase in u. S. Stockpiles. The dup says they cannot support the brexit deal as it stands. Anna edwards is in brussels. The ftse 100 is green. We are seeing a weaker pound. Dax skechers down. Down. Futures we are seeing a mixed picture in terms of the futures market. It is 8 00 in london. We are looking at the start of european trading. Ftse 100 trading to the upside. Will we not get a deal . There seems to be growing determination, but the dup cannot support it as it stands right now. One big question is vat. Ibex down 0. 2 . Beside the ftse 100, we are seeing weakness across the european sector. British pound down 0. 5 . It is moving on every headline. In the sector picture, it is mixed. Energy and materials are looking in the red. Iron ore, everyone is concerned about the supply on a market that is already oversupplied. Staples is looking at a mixed richer. We are seeing a lot of red. Nestle announces buyback, and unilever falling short. It is not selling enough ice cream in europe. What are you seeing in individual movers . Anna i am seeing more losers matt i am seeing more losers than winners. 200 up, three had 60 down. Ericsson is the biggest gainer and the biggest addition to the stoxx 600 with 5. 5 jump this morning. It added almost a point to the index. Unilever is also a gainer regardless of the ice cream outlook. Unilever is up almost 2 this morning. Glaxo, some oflack those rising incipit the. You do not see nestle on the upside. You see it on the downside. The biggest point loser on the downside this morning is pandora 00 firstquarter sales missed estimates. Then you see lloyds down. Nestle off 0. 2 . It takes points off the stoxx 600. Anna european markets opening lower. The ftse is the sole exception. The pound fell after the dup says it will not support the brexit deal as it stands. It puts the chances of an leaderst in doubt as eu meet here in brussels. What has the dup been saying . It is surprising that we have this pushback on the consent process, because some reporting suggests progress had been made on finding Common Ground on consent. Remind us of what the dup objects to . In Northern Ireland, in the Republican Community wants to join irish republic. In the parliament in northern can blockne party with a third of the seat. It is called a petition of concern. It appears the dup does not want to give up the ability to block something with a third of parliament. The Irish Government is worried about one party having a veto over everything else. They say they need to see a majority the edo. Majority veto. There would have to be a majority of both communities. Dup does not appear to have shut the door completely and support the deal as it stands and it will continue to work with the british government. There is more work to be done. Matt thank you very much. Bill smead,ow is sam unsted ceo cio, Smead Capital Management. Let me get your take on the importance of getting a deal done. How key do you think it is . Seemsin the world it just like political concerns and those things dominate the attitudes of investors. While simultaneously the price of money is microscopic around the world, which causes in moneys to be discounted into higher amounts than it would be if Interest Rates normalized. Puzzle,e piece of the and in the United States is the trade war running simultaneous to that. It gives plenty of uncertainty to people. We just ignore that in general because we cannot control it, and there is always Something Like it going on. There is always something crummy going on that affects the attitude of investors, and that is why we choose not to act on that. High on your radar does this play . For anybody in the u. K. , investors are those exposing themselves to u. K. Assets, they see the crucial story, but from the International Perspective is it something that stays in the background . Bill it ultimately will. Six or seven years from now, people might mention it in some history. Thing that is of critical at the moment. In 10 years people will look back and say, why exactly did we factor that into our Investment Choices . You pay a high price for a cheery consensus. If this is weighing down certain securities that are meritorious, you should be buying them. If it increases the value of other securities, you should avoid them. You went through those staple stocks. In the United States and obviously in europe people are overpricing stability. They are overpricing growth in the absence of growth. And what is compounding that is the incredibly low interestrate. When Interest Rates normalized in 10 years, the discount goes up quite a bit, and secondarily a completely different set of worries will take over. Marketss who used the psychology to their advantage will benefit. Matt we will keep you with us. Bill smead, our guest cohost this morning. We will come back and talk to ,ou more about those stocks more than 1 billion value funded at 18 so far yeartodate. Up next, the stocks on the move including ericsson, they raised their sales target as phone carriers boost their 5g span. This is bloomberg. Matt welcome back to the european open. We are 11 minutes into the trading day looking at a picture of the groups that are moving this morning. You can see more down than up. Resources, food, beverage, oil and gas, banks all down. On the upside you have personal household goods, those will be some of your staples. Staples on the upside. Utilities, tech and health care are rising. Some defensive stocks, but also with tech some growth names. I want to mention quickly a ondline coming out of berlin route to brussels, Angela Merkel will speak to German Parliament ahead of the eu summit. Live pictures there of german chancellor Angela Merkel addressing the bundestag. Behind me here right down the street. Netflix delivered enough good news wednesday to allay concerns over the looming competition from disney and apple. They had strongerthanexpected growth overseas, and earnings topped expectations. The banking sector, bank of america shares rallied after it reported betterthanexpected earnings per share, and flagged its expense management in a positive way. Does cfo said the lender had remained responsible in its approach to underwriting. Investors are focused on costs. Bill smead, ceo cio, Smead Capital Management is still with us. What do you think of earnings season so far . It has only just begun, but we have positive impetus from bank earnings. We own bank of america and j. P. Morgan and wells fargo, and those stocks have been out of andr relative to the market to things people are excited about. Even though as Interest Rates declined, the value of their existing bonds or loans outstanding become more valuable. People are afraid over time the margins between the deposit rates and the lending rates will contract, and they fear what that will mean for the earnings. What you have to understand, markets are anticipating nine to 12 months into the future. We look at these earnings reports for clues of what things might be like in the future rather than how that might make the stock move up or down. To give a comparison, bank of america made 7. 2 billion, and since they are massively over capitalized, they can use all 7. 2 billion on stock buybacks and raising dividends, because there is so much capital in the business that there is none required to operate the business. On the opposite side of that picture, netflix claimed to have but then they burned through 550 million of negative free cash flow. To ownwere rich enough the entire bank of america corporation, you got to do 7. 2ever you wanted to with billion dollars. If you owned netflix, you had to million to send to the people you own money to, and that is what you got out of owning the whole company. When the day comes when people value these businesses based on what they earn and what cash flow they generate, we could have an adjusting set of circumstances because there is a massive amount of capitalization tied up in the United States in negative free cash flow. Really interesting thoughts there. Catalyst thathe means the rest of the market comes around to your way of thinking, and decides that banking stocks are more than in the doldrums because of low yields . What will it take to make the rest of the Investment Community to see these stocks as you do . I love you for asking that question, if you were in the room, i would probably hug you. Here is the deal, it is inevitable that everyone will be 10 years older in 10 years. That means 90 million american millennials instead of averaging 29 will average 39 years old, and you have taken out a lot of the debt for your first or second home and bought cars by 39 that you did not at 29. These big inks have yet to have these millennials these big banks have yet to add these millennial customers. They have yet to borrow from them. They use the credit card and pay it off at the end of the month. When they get farther along and buy houses and cars, they will carry balances on those are the cards to make life work on necessity spending. As you saw from the chart before, staples are doing well, utilities and tech are doing well, those are things that do not benefit from the subsidy spending. The stuff at the bottom of the list are things that benefit from benefit spending. Matt food and beverage to be sure. Bill smead, ceo cio, Smead Capital Management is our guest will host for the hour. Stories. Idual stock is one of thesson biggest gainers on the stoxx 600, up more than 5. 5 . It lifts is 2020 outlook and it comes down to the 5g network. Card kicked off the year on a tepid note. This is a slowdown in cognac sales. Very different from last year when they had stellar performance for that drink. Nestle down 0. 7 . That is surprising, the company out with a huge buyback, 20 billion swiss francs. They had growth acceleration, yet we are seeing the stock tick lower. Reporter and there looking at some of the movers for us. Weak u. S. Retail sales could be the Tipping Point for another. Ed cut this month where should investors put their money now . We will get the top trades with. Ill smead, our guest cohost you are looking at live pictures of Angela Merkel down the street from me, the german chancellor addressing the bundestag and sang we saying we are not there yet in terms of brexit. She is ready for an emergency summit if needed. There will be a regularly scheduled summit already. She is saying russia and iran have been strengthened by the u. S. , piling on the criticism of president trump. This is bloomberg. Anna welcome back to Bloomberg Markets european open. 22 minutes into the trading day and the picture looks pretty flat. A little divergence but fairly flat on european markets. Ftse 100 almost entirely flat. There was a decline in september u. S. Retail sales. It could indicate consumers are starting to become shaky as a driver of growth. It could lead to a Third Straight cap. Straight cut in Interest Rates. Outlooke tempered their for growth in the next six to 12 months. Should investors position for a slowdown . Bill smead, ceo cio, Smead Capital Management is still with us. Your thoughts on the state of the u. S. Economy. You are fairly optimistic and that we will see a good period for main street in the u. S. Why so much confidence when the most recent data points look worrying . Bill you have what is going on in the short run. And itan be slowdowns appears that statistic was possibly affected by swings in Energy Prices and General Motors has been on strike. I do not know how that might have affected the numbers, but think of it this way. Is underlying force household formation, and therefore the fiveyear picture looks bright. Defined as is Economic Activity contracting for two consecutive quarters. I tell people the economy contracts for six months and people sell their stocks, would you divorce your spouse if they loved you too percent less over the next six months . The answer is not likely. What is spending going to be in the United States the next five years . As Wayne Gretzky would say, where is the puck going to be . The composition of spending will move from single 27 years old living in an expensive coastal u. S. City paying high rent, buying apple devices, eating burritos and drinking craft beer. That is the spending composition that is my dream come true and i am 45. When you say puck, you have to be careful because the brits are watching and i do not think they know what i sake is. Do you think i do not think they know what ice hockey is. Do you think we will see drops in stocks that you want to buy . Bill this is a great irony. The reason the economic recovery in the United States was so 22018 isom 2009 because it did not include housing. There was no historical gravitation to normal homebuilding and household formation levels. Endmight argue this is the of that phase. Gasp of thelast phase where we were relying on all of the serviceoriented businesses to provide Economic Activity, and we will move toward household formation and everything that comes with it. Likeoose to look at it this is the last time you will get great prices on things banks, people that would benefit from a pickup in Economic Activity, you are getting great prices on them now. Youre not getting great prices on companies that have taken the most advantage the last 10 years, amazon, netflix, the set, mastercard. Mastercard. When a 27yearold uses their critic are, they want the points to travel and they pay it off at the end of the month. When they get married and have kids, they buy a house and all the furnishings, then they use their American Express to get to higher limits and leave a balance outstanding for a while. That is a great profitable business that American Express has not had yet. To get you back, it has been a pleasure. Bill smead, ceo cio, Smead Capital Management, value updated 18 . We will bring you updates on brexit. 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. Headlines for you. Sterling slides as Boris Johnsons Northern Irish allies say they cannot support his brexit deal. Return 20 it will aslion to shareholders 2022 unilever mrs. Sales estimates misses Sales Estimates. And nancy pelosi accuses donald trump of hurling insults at her after lawmakers on both sides criticize his withdrawal from syria. Republicans say the speaker herself was at fault for walking out of the meeting. Good morning, and welcome to Bloomberg Markets. Berlintt miller in alongside anna edwards at the European Commission in brussels. Anna they came from the dup. Have heard more positive signals and more noise than we saw the dup pour cold water on that, suggesting they still have issues. There are still put together the infrastructure here as you can see the areas they disagree on etsy andd customs, the somerocess of consent so of the stuff still remains contentious and there are a couple of new things. Interesting to see Angela Merkel giving her thoughts. Saying we are not there yet and she would not allow a hard border in ireland. Reminder from the german chancellor that this is just not all about brexit. Turkey and says russia and iran have been strengthened by u. S. Withdrawal from syria. This is going to be a big topic of conversation here as well. Can they come to a united voice on turkey . That is in focus, as well as the news flow around brexit. Lets get your first word news update. President trump is defending his decision to paul u. S. Forces from syria. He is also fine with letting russia fill the void. The house of representatives took a different feel, passing a cross Party Resolution rebuking the decision. Mike pompeo lands turkeys president for the crisis. Mark carney says negative rates are not a policy option for the does not think the subzero move will hurt banks. He is added to the chorus for more fiscal policy given the amount of centralbank easing. They say it is now time for governments to expand their budgets. Netflix is jumping after overseas growth helped calm investor concerns. They signed up over 6 million new users outside the u. S. These internationalnetflix is jr overseas growth helped calm investor concerns. Markets will be more important as netflix faces competition from the likes of disney and apple. Overall, they missed out on subscriber numbers and forecast a tepid fourth quarter. Nestle plans to return 20 billion to shareholders by 2022. Toy may look at acquisitions help grow and maintain better profit margins. The swiss food giant is flushed with cash and the 10 billion sale of a unit earlier this month. It is starting a new Share Buyback program alongside special dividend payments. Global news, 24 hours a day on air, on tictoc, and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Anna, matt . Anna thank you. Lets talk more about the brexit negotiations being discussed here. Up has cast fresh doubt over the chances of a deal. Boris johnsons warned they wont support the current agreement. That comes as leaders meet in brussels to continue negotiations the managing director of research at a firm joins us on set. Lines, you these still think that a deal is possible . Do. Es, i i think it is too early to say and too early to call this off and assume were headed to no deal or towards an extension. Broughtce theresa may back the initial version of that Withdrawal Agreement one year , i am of the view that we will see the withdrawal of that agreement and that new elections are more likely after passage of that deal. If you look at the logistics in brussels, the summits are still a couple of hours again a away. If think of what Angela Merkel , thetold the bundestag europeans are ready for an emergency summit next week if required. Matt do you expect this deal to result in Northern Ireland being subject to the European Unions having noegime sovereignty when it comes to tariffs . I think the overall direction of travel back towards Michel Barniers original proposal, we would not call it a backstop any longer. I think that direction of travel is clear. The question is now the devil is in the details and we are looking specifically at the question of mechanisms. The big question we need to keep an eye on is the overall political driver. Its the question of the relationship between unionism and the centerright in great britain. They are looking at workingclass eurosceptics interested in a clean break. Have you get these two dimensions of policy realignment . Thats the biggest story going on right now. Anna very interesting to see in these hard brexiteers English Conservative Party respond to a dup rejection. You, if theres something to vote on in the there is talkns, of attaching a clause to the approval saying we need a second referendum. When does that happen in the timescale . I still dont think this is realistic, to be honest. We have been a before, there has never been a majority. Pass, there needs to be a coherent opposition in favor of a second referendum. Policy realignment means that labor has not made up its mind whether it wants to be a party for the eurosceptics or the proeu urban liberals. That tension has never been resolved and wont be resolved pass a general election. Unless resolved, i cant see labor coming out in favor of a second referendum. How do you think all of this is going to affect trade . Global trade has obviously been hurt by the u. S. China trade war and certainly the uncertainty from brexit thats far has not helped global growth. Do you see a recovery after a solution is found . The trade story you can look at the u. S. China story. Were looking at individual iterations. Well there be a brexit Withdrawal Agreement . This is just a smallscale iteration. Trade is becoming politicized across rich democracies. If we are in a benign scenario, we are going into a transition and then need to hash out and fda. Tensions under trade are here with us to stay. Time. Thank you for your sten is the managing director of research at teneo. Coming up, and interview with mark carney. That is one you wont want to miss as rates are in question. And up next, we bring you stock movers, including this Swiss Software maker. Slumping after thirdquarter earnings. Right now, down more than 12 . This is bloomberg. Anna welcome back to the european open. 43 minutes into the trading day, things looked fairly flat. Latest twists the and turns of brexit from here in london. Netflix jumped nearly 10 in late trading after restoring face with thirdquarter results. Overseas growth helped calm concerns about a slowdown at home. They signed up 6. 3 million new users, beating forecasts. An overall miss on subscribers and light fourthquarter forecast was tonight for shares. But a different story for ibm. Thirdquarter revenue missed estimates despite a longawaited infusion from an open Source Software provider they bought for 34 million. Lets talk about netflix. Broadly in line thirdquarter results. A muted outlook. What is going on . Was that there u. S. Subscriber base it grew again after the shrinkage. It has reassured people they have it back under grips. That outlook was below the street but investors are concerned the weakness might be more permanent. Encouraging growth in q4 talking about a strong lineup. It will help bring a lot of customers back to the platform. I was talking with a sayst this morning who they can win this war if they have the right ai software. Is that what netflix needs to survive . It is definitely that but it is also content. The User Experience has been a to helpoint for them them find value in the platform. Any to continue investing in their own content. They would need to keep that breadth of content to create that mass appeal that drives the big Customer Base a need. They have really signaled that and the results. Heavily. Inue to invest heavily in local content and beyond. They have huge stars coming in some content slated for q4. Anna local language content for the u. K. In case we cant speak american. Lets ask about ibm. How worried should investors be . We mentioned it at the top. 34 million on red hat, thats the real focus. Can they make that investment work to close the gap on markt leaders . It is a big bet, and so far, kind of going ok. They are cautious about what to expect from that merger. They really need to make that deal work to justify the price tag. I think the jurys still out on how quickly they can do that and if they can do that at all. ,att thank you for your time matthew, a bloomberg tech intelligence analyst. Lets go to Annmarie Hordern in london. Annmarie we have to start with temenos. Plunging 13 , the software in the missed estimates biggest fall for the stock since january of 2015. Telia is down 5 with soft sales. They are saying they will stop the buyback program. They are pointing to weaker economic outlooks as well as the slow first half of the year. Smith to the upside up more than 4. 5 . They are looking at and bought a travel company in the u. S. They said they want to boost goes growth in the states. It is a strong start to the financial year. Matt, anna . Anna thanks so much. Lets talk about whats coming up. Matt we can both talk about whats coming up. We both know. Anna go ahead. Matt u. S. Talks to contain the Syrian Crisis have taken a dramatic turn. The meeting with donald trump and congressional leaders broke down with the president allegedly hurling insults at nancy pelosi. She accused the speaker of having a meltdown. Joining us is Kathleen Hunter heard hunter. How surprising is this . Id say we seen it from that the closing before. I say we have seen it from both sides. We have had examples of the democrats getting tense from donald trump, and all dates back to when the democrats actually got a pretty good deal in a debt limit. Its not surprising the word impeachment did not come up. Obviously, trump has been very angry about the inquiry. In some ways, its not surprising tensions were running high. Pelosi may be responded the way she did, i think. Given that she is someone who is also prone to having strong responses to things. If its true he was hurling insults at her, its not surprising she did not sit there and take it. She does a lot of things for political effect. Anna how will it play out for the democratic audience . Matt sorry. Anna how will this play out on the democrat side . There are some risks for the democrats potentially. When it comes to serious specifically syria specifically, the story line is that republicans are unhappy with trump. Course, butcrats of trump is getting flack from his own party. Some ways, the events that transpired yesterday dont necessarily help democrats. Now people are talking about the fight between pelosi and trump and not necessarily about trump getting flack from his own party. We will see how that plays out but it may not have been the most strategic move from a political standpoint. Thanks very much, bloombergs Kathleen Hunter with us on the bloomberg political story. A couple of lines coming through from jeanclaude juncker. Saying he spoke to johnson and quote we want a deal. Not entirely clear what that means. We continue to track the possibility of a deal and the extent of dup objections. Matt we are going to talk next about the dollar selloff. We will put that question to richard jones, our fx and rate strategist next. This is bloomberg. Matt welcome back to Bloomberg Markets. We are looking at gains across indexes, including the ftse, up. 1 . As we follow each and every brexit headline. Cacee the dax and cap moving less. Joining us to talk about all is richardnd rates jones here in berlin. First, lets get to brexit before we touch on the dollar. Wehave seen the volatility, now see the dup saying no to a deal. Our traders betting that can change . The jury is still out. There is still hope a deal will get done. A lot of the positive moves we have seen is embedded in the price of the pound. We do get confirmation of bigger troubles ahead and then we could see a bigger selloff in the pound. For now, the moves we see could make sense and it depends on what the dup decide. Matt it is a twosided street, obviously, at the dollar has been moving a lot lately. In fact, we are back to 1200 on the dollar index. Why is that . The pound movek against the dollar has been a big driver and there is further room to decline. 23 . Ssively, but another the u. S. Economic data is starting to turn. Not only the survey data, but the hard data. I see that weighing on the dollar and towards the next few months towards your and also weighing on u. S. Stocks. Got badata turns Economic News will be bad news for stocks and the dollar. Matt why cant bad news the good news . If the fed is going to come in and save the day with more rate cuts. Richard i think that cushions the down move which is why i am not gung ho saying these moves will be massive. The fed hasnk limited ammunition and will deploy all the ammunition they can i think it will be challenging as they dont have much in their toolkit. Matt what about spending . We talk a lot about spending here. The u. S. Could do something along those lines as well as another possible tax cut. Richard never rule that out, but having just done that, thats a pretty big thing to go back to the trough again to do. Cannot we have got a lot of room to spend and theres a lot more to do that. Matt thanks so much. Richard jones, our mliv fx and rate strategist. And remember, you can join the debates. We talked about the dollar selloff and how far it has to go. Reach out to us and the mliv team by typing mliv td. Coming up, and interview with mark carney. An interview dont want to miss. I am headed to radio. Surveillance is up next. Boris johnsons Northern Irish allies say they cannot support his brexit deal. Nancy pelosi accuses donald trump of hurling insults at her after lawmakers on both sides criticized his withdraw from syria. And netflixs streaming success. International growth figures senate shares of soaring bubble apple and disney take a bite out of global profits