Not joe biden, Elizabeth Warren, or even impeachment, its recession. Carol and 2020 is sure to bring about the great antitrust awakening. The question is not just whether to break up Companies Like facebook, google and amazon but how the laws are enforced. Kailey much more ahead. We begin with joel weber. 2020 start of a new decade, what , are the big things we needed we need to be watching . Recession . You hit a couple. Recession is one thing everyone is really wary of. It has huge implications for the Trump Presidency and the u. S. Economy and the Global Economy as a whole. So our interest to gives a survey of the World Outlook as a whole. 2 growth is what has been a projected for the u. S. But , theres always a chance of it being revised downward. It comes down to the u. S. Consumer is capable of. In many ways, the Global Economy is on the back of the u. S. Consumer. Carol we go from the economy to elections. You guys cover that rightfully so. And the u. S. Is not the only place where there will be no worthy elections. That is an expected story. We can all look at 2020 and say elections, thats going to be a , choppy sea. One of the more interesting places that will take up a lot of bandwidth especially among investors is going to be the antitrust conversation. This will dominate dc in a way that only really harkens back to the 1990s and the last time antitrust dominated news. And we think that this might have a different takeaways that than it did in the 1990s where ultimately nothing significant happened. We think there are more serious things that could happen during an Election Year of course. Kailey that could be a big implication for the markets when it comes to these big tech names. A rude awakening could be coming. We basically tried to take antitrust as a theme and look at it from every possible way you can do so from how elizabeth , warren can break things up to the players you need to know about to actually like going back and looking at case studies of how the laws could be enforced. Carol i have been telling everybody, it is kind of a mustread. If you want to understand the players, issues, and the law. It is all there. The other mustread is 50 companies. We do it every year. We start with 2000 companies that Bloomberg Intelligence evaluates and filters it down the companies they are bearish on, bullish on. We are not making calls, but they are ones we feel will be interesting and everybody should keep in mind. Carol what i love about it, if you go online as well. You can go online and kind of play with the list. The sorting ability is neat. You can find out companies that excel at women or earnings. It is fun. Carol and for a look at the year ahead in politics and trumps scariest component lets , turn to josh green who joins us from our washington bureau. Lets talk about it. What is it that President Trump needs to be worried about when it comes to reelection. Needs to be worried about that the economy by most , forecasts, is trending in the wrong direction. In particular, manufacturing is trending in the wrong direction. It is in a recession. That is key in the group of swing states in the upper midwest that will probably decide the next election. Kailey the demographics, the geographics are all important here. When trump considers that, is it too late for him to change the game . Are we too far gone . Too much damage done . I dont think so, necessarily. I break this into two lanes. When you look at what trump promised coming in, during his first year as president he , promised 5 even 6 growth , across the economy and that is not going to happen. On the other hand, he has had positives. Unemployment is at a 50 year low. The stock market is treading water near alltime highs. And he has managed to keep republican sentiment behind him even as he faces a slowing economy and impeachment. I think the big unknown is what are the effects of the trade war going to be Going Forward . We are seeing them bite into growth and the economy, hurt state economies in states trump needs to win. However, theres still time to strike a modest trade deal with china. If he could do that, it would turn sentiment around. Benefit his reelection choice. Carol what i love is that you break it down into kind of what happened after he came in to the white house and you did see manufacturing jobs coming back. That was a lot of momentum and the tax cuts had an impact. In the last year or so, you have seen that shift. And as you say, in the key states he won, it has gotten tougher in terms of some of the manufacturing jobs. If you go back and look at his term from a macro level, it is really interesting. Trump delivered. He had the stock market up, you had manufacturing jobs growing. As jamie dimon said in trump had 2016, succeeded in unleashing animal spirits partly because of his tax cuts. The problem is that all of that has stalled out in large part due to the trade war that he started. You have animal spirits have gone away, companies are not investing. We are now in a manufacturing recession. That has hurt the economy in states like wisconsin, michigan, pennsylvania, where recent polls show all of the top democrats, biden, warren, sanders, beating trump in a headtohead matchup. That is a flashing red warning signal for trump as he looks ahead to the election. But again, there are bright spots. He has still got time to turn the ship around pull another upset. Kailey lets talk about polling and where exactly owners stand what kind of job they think the president has done. Are they still behind him . Do they still approve . Trumps approval has been remarkably consistent. 40 to 43 approval, 52 to 56 disapproval, that has been true throughout everything. Through the Mueller Investigation and now the impeachment drama. He has managed to keep most importantly, he has managed to keep Republican Voters pretty much behind him. He has got a solid 90 approval rating. As of now his voters are not abandoning him. As we saw in 2016, the Electoral College favors a republican candidate like trump. There are areas he has to worry. He has lost enormous amounts of support from noncollege white women which were instrumental in 2016. He is driving away voters in the suburbs who i think will be really important in but he has 2020, brought new people into the political process. His campaign believes they can excite voters who do not usually vote, like trump, like that he fights like what he stands for. , it will be a test of whether he can turn out enough Republican Voters to overcome what is undoubtedly a blue wave of democrats. Carol your story, a reminder with everything that is going on globally and in the u. S. , we have seen this in past elections, it is truly ultimately about the economy and how everybody feels. It really is. If you look at the three president s in the 20th century who lost reelection races, all of them were running in a recession. It cost them the election. Trump is not there yet, but all forecasts show things trending in a bad direction. Carol josh green, thank you. Carol appreciate checking in with you. Josh green, thank you. More on that coming up. Also, the stock market has a lot riding on the elections. Kailey but there is the one thing that could stand in the way of a u. S. Recession, your shopping habits. This is Bloomberg Businessweek. Kailey welcome back to Bloomberg Businessweek. I am kailey leinz. Carol i am carol massar. Join us every day on the radio starting at 2 00 p. M. Wall street time. You can also catch up on our daily show by listening to our podcast on apple podcast, soundcloud and of course bloomberg. Com. Kailey you can also find us online and on our mobile app. Carol back to the year ahead issue. For better or worse markets have become entwined with american politics ever since the 2016 residential campaign. Kailey that shows no signs of changing in 2020. Here is senior markets editor michael graham. It is an awkward position investors and analysts have been thrust into. Now they sort of have to have a sideline as a political scientist and gauge where the politics market or the politics world are headed. It is turning into a market of its own almost. There are these prediction sites where you can track where the betting community believes the horse race lies in politics. Carol tell us about one strategist you visited. You start off your story with that. I think it tells its funny, a woman at rbc wrote in a note how she looks at these political polling charts almost like stock charts right now. She is looking at Elizabeth Warren as like a momentum stock. She is really rising in the polls. She said she would advise shorting joe biden. My comrade from the university of delaware unfortunately. But just because he is waning in the polls. What is fascinating is that so much is at stake with politics right now. Obviously, when President Trump was elected, politics ruled everything in Global Markets ever since. But now some of these Democratic Candidates have platforms that threaten to upend a lot of the Main Industries in the u. S. Carol lets talk about medicare for all. That will have implications. Absolutely. Thats why Elizabeth Warrens ascent in the polls has people scrambling to decipher what it could mean as her plans are all over the place. So broad reaching that you have the kind of figure out her , what will they be and what will she be able to accomplish. A lot depends on what congress looks like. But a hypothetical Elizabeth Warren presidency has wall street scrambling to figure out all of the ripple effects. Obviously as you said medicare , for all would have major implications for the healthcare sector. She also wants to raise the minimum wage which would pressure margins but also provide a lot more spending in the economy. There would be winners and losers. Carol i think it used to be it was we thought that if there was a democrat, it was not good for business. If there was a republican, it was. Markets would play off of that. But in recent years, we have not seen that. Democrat versus republican, is it all good or there are so many different variables and scenarios. Is it a democrat with a full Democratic Senate and house behind them or mixed . There are so many different scenarios. I dont put a lot of faith in any of them because every situation is so unique and the candidates and the economic environments going into the elections are unique. We have gotten into uncharted territory with President Trump doing stuff that no president has done before, aggressively hitting china with tariffs, threatening them elsewhere. He broke what i think would be the paradigm of the past. You have to just play cards on the table now. Carol one big factor standing between the u. S. And a downturn is Consumer Spending. It makes almost 70 of the economy, higher than almost any other country. Kailey it is true. While shoppers have been crucial for u. S. Economic growth, that is particularly the case now as we look ahead to next year. Here is matt townsend. The u. S. Economy has always relied on Consumer Spending as a big chunk of the economy. One interesting stat is 70 of the u. S. Economy is spending and in china it is 40 . Now the u. S. Economy is relying on consumers even more so, the things like manufacturing are in contraction right now, cutting jobs with less output. U. S. Consumer, that is what is propping up the economy. Kailey is the consumer feeling good still to this point . They are, and thats one of the counterintuitive aspects of the story. Broadly, economists at big banks like goldman sachs, they dont see recession coming next year. The few bears on the case that sort of see one coming, they are basically pointing to consumers being hurt by job losses and slowing on spending. But broadly speaking, economists do not see a recession coming because the u. S. Consumer is so strong. Carol you go through a lot of Economic Data points. Consumers are optimistic, right . Yeah, Consumer Confidence is the highest levels in a decade since before the recession. Carol its remarkable considering how long the expansion has gone on. Longest on record, hit that over the summer and yet they are still optimistic. Still optimistic the data is , showing more wage gains coming. If you look at a stat on job openings, its over 7 million jobs open right now. That means theres a big demand for labor all across the economy. People are able to negotiate raises or leave for better jobs. Or they get raises. That is raising wages, lifting up the economic fortunes of america. And you know as long as thats , happening, its hard to see where this is going to change. Carol how do you get recession if you have got that going on . Exactly. Some of the cracks in the armor, so to speak, housing. Housing prices are going up, them going up has been a boon to Consumer Spending because people are spending more on homes, many furniture, contractors, and that is slowing down. Home prices are decelerating. Carol is it because of a lack of demand, not lack of supply . Depends on the market. Some market like new york, for , example, the concern is too much supply is driving down. Kailey and you have more and more people renting rather than buying. Exactly. Things Like Health Care costs. If those keep going up. If there is some sort of repeal of obamacare and people have to pay more out of pocket. Think about the people on obamacare, those are the people low income, middle income that , could stretch their wallets. And the job growth. Job growth while still positive, has slowed down. If you are a bear on the u. S. Consumer, you see that continue to slow down. The trade war uncertainty about , the economy freezes hiring and job growth slowing and slowing. That could create a cycle of people worried about the economy and maybe cutting back on investment spending. Kailey coming up can the 737 , max 8 regain altitude . Carol it is a good question. And what happens when the plane is cleared to return to the sky . Kailey this is Bloomberg Businessweek. Carol welcome back to Bloomberg Businessweek. I am carol massar. Kailey i am kailey leinz. You can also listen to us on the radio on sirius xm channel 119, and on a. M. 1130 in new york, 106. 1 in boston, 99. 1 f. M. In washington, d. C. Carol a. M. 960 in the bay area, also over in london on dab digital and of course on the Bloomberg Business app. Kailey boeing reported earnings in the company says it is confident the 737 max 8 will be cleared to fly this year. Carol while thats good news for carriers, the question remains if travelers will be nervous about flying in this plane involved in fatal crashes. Here is justin in dallas on what is to come. It was grounded for most of the year following two fatal accidents that killed 346 people. Are saying noines regulator is letting it in their airspace. It has been a tough year for boeing in terms of the max. Kailey it is not just the fact they need to get planes back in the air. It is that they need to get travelers willing to go back, right . Right. The Airline Customers really need to face up to how much isa public fear and concern there about this airplane. The old saying is that the safest airplane is the one with the most attention, but a lot of the public does not Pay Attention to what they are flying. But in this case, they might. There is good evidence people will be asking and will be cognizant of what they are flying and want to know if it is a max. If it is not a max, they will not care. They do want to know if it will be that aircraft and if it is, what do airlines have to do to get those people comfortable . Carol lets talk about what the airlines are doing. They are going to lay it out. If you make a reservation, they are going to let you know if you are flying one of these. Yeah. The three u. S. Airlines that have it, southwest, american, and united, all say that they are going to be very transparent in this process and want everybody to know up front when you are a buying ticket. The idea is practical because they dont want people getting on the plane and then having a sort of a freak out incident on the aircraft with the crew, social media, etc. It makes a lot more sense to separate those folks early as possible even if that is at the airport at check in. They are going to let you book without a fee or penalty to go on another aircraft if you are not comfortable flying on the max. We dont know how long that will last. They have been hesitant to disclose how long that policy will last. But for several months, it will be the case where you are allowed to rebook. Kailey how much of a burden to do the airlines have to bear in restoring confidence or is that mostly boeings prerogative . It is definitely a shared responsibility. I think what happens is once the government say, in the u. S. And europe and china this airplane , can fly, the airlines are eager to get back into service for financial reasons. Then it becomes the Airline Issue because they are dealing with their own customers and their own customers fears and concerns, and questions. Boeing will be involved in doing what airlines ask them to do but , at that point, it becomes an airlinecentered issue. That is probably where we will see the most outreach. Carol from the global skies to the supply chain. Kailey here is austin carr about what chipmakers tell us about the undoing of the great semiconductor supply chain. The crazy thing about the Semi Conductor and chip market is you dont realize how embedded in the market is every single device we use, whether it is windows pcs are all the teeny parts that control memory and processing speed. They all come from a global set of partners mostly in asia yet they power so much of what we have in the u. S. So the big thing we are focusing on is whether or not there will this great divide great , unwinding for a market headed towards more interconnectedness that now might be pulled apart. Create a great firewall between china and the u. S. Kailey so they are in everything, but they are not necessarily made everywhere. These things are heavily concentrated. So can you kind of map that out for us . Totally. One thing we highlight is this big ip lawsuit between global foundries, which is a Semi Conductor foundry kailey these guys are always suing. There is a back and forth. There is a lot of legitimacy about the arguments of these lawsuits. But what they are highlighting, and finding reception on, is not just the growing corporate consolidation of these parts but also regional. The company they are suing, tsmc, based in taiwan, they own about 74 of outsourced chip production. That means basically, you know, a company designs the chip that wants them to manufacture it. That is massive. Global foundries says for the most advanced chips at Something Like 90 . So they are playing up the geopolitical concerns. How concerned should we be that basically our iphones could not run if we got cut off from the market, manufacturer, region . They kept referring to the company as being from Greater China although they are from taiwan. They want to play into those geopolitical fears about carol the trade war. We have seen that play out, right . Semi conductors have been a volatile sector for the duration of this trade war. A lot of the conversation has been, how do we get the supply chains out of china . Where do they go and can they really do that that quickly . Its complicated. One of the analysts we talked to said the Immediate Impact would be nearly one third of manufacturing would move out of china to places like vietnam, india, taiwan, elsewhere. Which is a compelling, massive shift. The downside to that is that normally takes a couple quarters, if not years, to relocate some of those centers. It also means supply chain and component cost will go up quite materially, which has an impact on customers. This holiday season, you might not see prices raised, but fewer discounts. That is one of the things i heard from analysts. The greater concern i think is some of these companies are having to find their own suppliers or create new supply chains, huawei being a major example in china because of these sort of corporate blacklists and tariffs people argue have been weaponize to a degree. Kailey in will big tech survive 2020, antitrust . Carol more from this weeks issue. This is Bloomberg Businessweek. Carol welcome back to Bloomberg Businessweek. Kailey still ahead, the year ahead will be a big one for elon musk and his quiet courtship of china. Carol looking forward to that. 2020 looks primed to be a great year for consumer gadgets. We will get a preview. Battle for a big tech giants in the year ahead we , begin with antitrust. Carol social media and Tech Companies remain on lawmakers radars. Mark zuckerberg testified this week and got a lashing on just about every controversy facing the social media giant. The tremendous power amassed by facebook and other companies gets an entire section in the special year ahead issue. Here is one of the editors of the section. It really was a very short discussion. Because antitrust is going to be so important next year that nobody really argued against having a special section. It was like, yes when we proposed it yeah. Yes what can you do . Carol because of the focus on big Tech Companies. Exactly. They are a big part of the economy and political conversation and 2020 elections. It was pushing on an open door. Kailey talk to us about the politics of little bit more. We know this is a big issue for President Trump and his attorney battle attorney general who has his own background in this. This is a bipartisan issue. One of the rare issues were both parties seem to agree that big tech has gotten too big and too powerful. But they come at it from different angles. And so President Trump thinks they are biased against him. Especially facebook and google. And then he really has it in for jeff bezos, the founder of amazon. He personally owns the washington post, and so trump likes to refer to it as the amazon washington post. And he things the post is biased against him. Carol thats interesting. There is a lot of folks who think this is just a political thing and this is the president and his administration carrying out what the president wants. But there are some serious antitrust concerns. Exactly. And so from the democratic side, you see them focusing more on the basic antitrust and economic issues. They are looking at Academic Studies that have connected low wage growth, and low levels of innovation and productivity to big tech. They see that those companies are so dominant, so powerful, would control so much of consumer data, that others cant compete. That that is the reason for all of the economic problems we have had. Their issue is coming from a classic antitrust examination. The republican issue does seem to be coming from these companies are biased against us, they are so powerful they are controlling the political conversation and keeping out conservative points of view. So it is an antitrust issue to them, but to others, they see this is political. Kailey this is a new way of thinking about consumer welfare. It is no longer about prices, but issues of privacy and control of information. Yeah. Another reason why antitrust is so important is that the laws allow cases to be brought if the Consumer Experience has eroded. And so privacy, obviously, has eroded. There are antitrust experts who say you can now make privacy part of antitrust, which is a new thing. They are connecting those two issues. Carol the question is not just to break up the companies but how the laws are enforced. Kailey exactly right. Here to tell us more is our reporter. We are talking about coming out of an antitrust slumber. The last time the department of justice went after a company was microsoft, 20 years ago. And since then and even before then, antitrust had been evolving into this thing where if it did not harm the consumer or if it did not push up prices, the country, legal profession, and the courts said it was ok. Now you have google, facebook, amazon, other Tech Companies and all of this consolidation that has taken place. People are saying you cant use the consumer welfare standard because people are getting everything for free. Rights. Different. And that is not really get at its power, and what it can do and what we should do about it. So there is this whole movement. A lot of young economists, but others as well, who are saying we need to start thinking about antitrust in a different way. We need to go back to the way we thought about it where just bigness alone is a problem. We need a different set of solutions. Kailey why is now the moment . Why 2020 . Why is this the year of the great reawakening . I think there are two reasons. One is the growing awareness of income inequality. I know that may sound strange, but if you think about airlines, there used to be 20. Now there are four. That gives them incredible Pricing Power and control over the labor force. A lot of people are thinking, maybe this has something to do with income inequality. The second reason has to do with the problems facebook in particular has had. The privacy problems data, Cambridge Analytica, the election. The head of the house antitrust told mettee specifically he had been thinking about these issues, but when Cambridge Analytica came on, the lightbulb came on and he knew he had to do something. Kailey and netflix get some serious competition in the new year. Kailey apple smart glasses could make 2020 the year of a. R. This is Bloomberg Businessweek. Carol welcome back to Bloomberg Businessweek. I am carol massar. Kailey i am kailey leinz. Join us every day on the radio starting at 2 00 p. M. Wall street time. You can also catch up on our daily show by listening to our podcast at apple podcast, soundcloud and bloomberg. Carol and you can find us online and on our mobile app. Back to our special issue. The year ahead. In the next 12 months, four new streaming services are coming online. Here is this weeks businessweek explainer on the upcoming streaming war. It is the talk of hollywood and wall street, the streaming wars. A battle that pits the biggest names in entertainment. In the next 12 months, four streaming services will debut. Disney plus, apple tv plus, comcast peacock, and atts hbo max. For years Media Companies downplayed the impact of netflix. Now, they appear to be going after the largest paid streaming service. Who will come out on top . Most surveys suggest the average customer will pay for 3 to 5 streaming services. Netflix, amazon, and hulu are well entrenched, leaving room for one or two more winners. Disney plus is the favorite amongst analysts and executives. It will charge 6. 99 a month, that is about half as much as netflix and it will offer a library that appeals to every kid. Everything from the avengers and star wars to the simpsons and toy story. One big winner in this fight may be tv show producers. Netflix is spending 15 billion on programming this year while amazon, at t, comcast, and disney are expected to boost their spending to comparable levels. Kailey for more on the Subscription Services coming online next year and if there , are enough media hungry consumers to support them all we , checked in with our reporter. The perception of other people in hollywood and wall street is that disney plus is the most formidable. In part because of pricing, but just what it has. Disney operates the most powerful movie studio in the world and has these brands, pixar, lucasfilm, that mean a lot to customers. Mean a lot to kids. The on ramp for disney plus seems quite easy. It will be very hard if you are a parent not to buy this. Just to save money a little bit because you are probably having to rent or buy movies over and over again to show your kids. That being said, i am most interested i think in hbo max. Disney plus could still be an additive to netflix. It is cheap and targeted. It is not trying to be everything. Netflixs enemy is cable. It wants to replace Cable Television with Internet Television and have netflix as the number one network. Disney plus is a little bit more like a Cable Network in a traditional sense. You stick with that analogy or metaphor, because it super serves a particular audience. Hbo max is the only one of these new services that is trying to be all things to all people. Carol they have a wide array of programming from the getgo. Yeah. Hbo max combines what you already get with hbo. Library of sopranos, game of thrones, the watchmen, the catherine the great show that has just come out, and fuld in fold in other programming from what was once time warner. Oft, that includes kind movies from warner brothers, aquaman, harry potter, all things like that. That includes cartoon network. It seems like every day, i get a new announcement about a new series or a new licensing deal they have struck. The amount of press that they are putting out about these new projects dwarfs disney, apple, and comcast combined. Kailey there is just so much content out there. The question is are people willing to pay for more streaming services to get to that content . Is there room for everyone . Theres room for a lot of them. If it is everybody, im not sure. Most research suggests, when i talked to the guy overseeing at t, their research suggested people will spend about 100 for tv. Some people are paying for traditional cable, a lot of people are paying for cable and satellite. The number is kind of in the 80 million range, maybe higher. It will continue to go down, but you have people who want news, sports, and live tv. But lets say people will pay for three or four services, maybe five if they have a lot of disposable income. That probably means netflix, which is just builtin. Amazon, which barely counts. And then they add on a couple others. Maybe thats hulu with disney plus, those two can be sold together maybe hbo max. , its hard to see every single one of these services knocking it out of the park. Carol someone who knows a lot about the cable broadcast and streaming areas, the founder of bbb ventures. She weighed in on the future of cable. I think disney is really interesting now. Im probably biased because i worked for the company. But i do think they have unique assets. That is one of the things iger has done that is incredibly smart. If you look at the movie business that disney has, because of the companies they have acquired, because of pixar, because of marvel, because of the star wars franchise, they have more than half of the billion dollar films that have come out in the last five years. Rights. And now with fox, they have an even bigger library. So i think they are going to be hard to beat among the new entrants. Carol is cable dead . Or getting slowly towards that . There are still like 80 million cable subscribers, but what happens . I think it is going to take time, but i look at my children, and they are not cable customers. So this is largely a generational shift. I think that people who have grown up with Digital Assets and who understand how to use apple tv and how to use roku can put together their own, you know, what would have been a cable assortment. They can do that themselves for less money. Carol their own bundling. Some say you could ultimately see a bundling of streaming services. I think thats very possible. Why not . Carol staying with entertainment, after several sleepy product cycles 2020 looks , primed to be a great year for consumer gadgets. Get ready. Kailey i am so ready. Mark gurman in l. A. It will be like the proliferation of faster 5g networks and the devices enabled by that as well as a big push into augmented reality. Kailey lets talk about augmented reality, specifically apples a. R. Glasses. What are they and what are they going to do . Apple has been working on this pair of a. R. Glasses since about 2016. They have a massive team of hundreds of people working on this project. And the idea is that it is basically like an apple watch or iphone for your face. Right . You are able to put those glasses on and it will have depth of field cameras with different degrees of freedom, as well as holographic lenses. Able to sort of get emails, Text Messages like games, maps and such, to be in your field of view. You are not looking at your wrist or pulling out your phone. What you are doing is seeing it in front of you. In your line of sight. Augmented reality differs because you do have that line of sight. I could be wearing these right now and looking at you as we are talking and still getting information. Carol talk to me about microsoft. I dont always like think about them when i think about innovative products. They have got a new surface duo coming out. This looks like it could be pretty interesting. They are trying to change the narrative there and i think this , is under told. We did have a few stories on it, but it is a theme some are missing. These new devices run on android. That means it actually has a chance to be sold, right, a chance for people to use this thing and buy it. If they launch their new foldable phone on another proprietary operating system, it would be dead on arrival. But because it happens the App Ecosystem and backing, its a phone people will look at. It is an interesting new concept. I think it is a different variation from what weve seen from samsung. I think it will be must less much less prone to breaking far , more optimized, and overall, a better product and better offering to consumers than what samsung is offering. Carol what are you most excited about . Anytime there are big new categories for multiple technology companies, its a very exciting time. What we have seen for years is apple being the only one able to usher in cool new hardware. But what we have seen is a lot more competition from samsung, microsoft, amazon, all of these players upping their game. Increasing competition. Its no longer the point where apple is the Market Leader in hardware necessarily. Thats the most exciting thing. Everyone is trying to make each other better. Its not something we have seen in a long time. There is more parity than ever which is going to make everything better. Better products for consumers. Kailey up next, two car stories to watch in the year ahead. Including why elon musk is holding teslas in shanghai. Carol and daimlers designers on leading the way to sustainable luxury. Kailey this is Bloomberg Businessweek. Carol welcome back to Bloomberg Businessweek. I am carol massar. Kailey i am kailey leinz. You can also listen to Bloomberg Businessweek live on the radio on sirius xm channel 119, and on a. M. 1130 in new york, 106. 1 in boston, 99. 1 f. M. In washington, dc. Carol also a. M. 960 in the bay area, in london on dab digital, and of course, on the Bloomberg Business app. Tesla surprised markets this week. They posted earnings at the most in years. The Company Announced it is already producing vehicles at the shanghai giga factory. Kailey if elon musk delivers the first chinesemade tesla model three for customers this year, it will be a rare case in which the companys famously scattered a ceo will hit one of his notoriously ambitious deadlines. Carol reporter dana hull. The first foreign owned automotive plant in china. Its in shanghai and the factory was built in record time. Roughly six months. Carol talk to us about the pace at which this all came together, now ready to roll off the assembly line. China is interested in showing it can open its economy and tesla is interested in china because china is the Worlds Largest auto market. Elon musk traveled to china in 2019 for this official groundbreaking, and since then, we have seen all kinds of drone footage and photographs of this massive building. Carol take a step back. Here we are, right, we spent so much time talking about the u. S. China trade war out there, and yet, elon musk, in record time, said he was going to do it and actually built a facility over in china. How did he do that . Well really you need the , support of the Chinese Government. China is known for fast construction. I mean they are masters at , building cities seemingly overnight. But to get a factory up and running, you need a lot of support from the government for permits and power. Tesla basically, they secured the land. They secured financing. Construction began. Power was connected. This would not have been possible without the support of the Chinese Government officials. Carol he got support. What about u. S. Government officials . Here im thinking any executive in the United States, if they talk about manufacturing in china, there is a lot of criticism that comes from washington. Absolutely. But what has been interesting is you have not seen musk, who is known for his have it on twitter, really talking about the trade war, except that he has been complimentary about the Chinese Government. He has remarked several times about the speed at which china gets things done. He has been enormously complimentary, and President Trump has stayed totally quiet on tesla. Kailey lets talk about elon musk and his twitter, and the expectations he sets that are not always on target, especially when it comes to production. He has had some difficulties. Walk us through the capacity expected at this factory. How many cars are going to roll off a week . In april during the Earnings Call musk said he was feeling , very optimistic. He expected the shanghai giga factory to produce 1000 cars, possibly 2000, cars a week by the end of 2019. If they do produce cars in that volume, he would hit his target which is not something he is known for. Carol talk to us about how china, specifically as a market, what it means for teslas future. China is teslas second largest market outside the United States and then followed by norway and the netherlands. So just in terms of raw volume, tesla is china is hugely important to tesla. Secondly as we are seeing signs of a possible economic slowdown in car sales, both in the United States and abroad, you have to focus on the markets where car ownership is still new. In china, thats the case. You have a growing middle class and aspirational buyers. And it is just a huge wealth of opportunity for tesla. Carol staying with sustainable cars for the year ahead, and when it comes to luxury, our resident car expert caught up with daimlers chief officer to talk about what is to come. He is a superstar in the car world for his designs. Of course if you drive basically any mercedes these days, he has class, all of the suvs, he has designed all of those. He has been very influential. Carol been there for a long time . Since 1997. But he is still pretty young and he is the one who has been doing these crazy, conceptual cars you may have seen. If you follow him on instagram, its great. He will put up photos of taxi drones that are like flying devices that he has conceived. That possibly could happen. I spoke with him, and hes great. Carol i love concept cars. You do wonder about how much of this will be a reality. You talked to him a little bit about that. He is great to talk to because he looks like a very cleancut staunch kind of german man. But he is a really open, freethinker, and he says look, i am already living in the future. And it is not going to happen next year but within the next 20 years we can certainly expect to see flying taxi drones, and if you think about it, planes are already using autopilot technologies to fly most of the time. So autopilot, self driving vehicles are easier to do in the air than on the ground. We already use that. So thats kind of exciting. Kailey i want to shift gears to sustainability. You asked pointedly is the sustainable luxury was an oxymoron. Immediately, he said no. Actually the key to luxury is sustainability. He said luxury is being admired by society for any number of things. For your success, intelligence, your wealth, whatever. Part of that admiration requires the responsibility to society and sustainability is how you show the responsibility. Does that make sense . He basically says, look, if luxury is going to continue, it well it has to be sustainable. , carol Bloomberg Businessweek is available on newsstands now. Kailey and also online at businessweek. Com and on the mobile app. Carol find more on the year ahead including the 50 companies to watch. The analysts who tracked 2000 identified the businesses that will make news next year. So much great stuff. What is your mustread . Kailey for me it is all about the recession. Are we going to get it in 2020 . What are the implications for the election . I loved that piece this week. Carol just a reminder, its about the economy, stupid. I think about that slogan. Other campaigns in the past, ultimately how voters go to the polls. Kailey that will be true. What is yours . Carol mine was the deep dive into antitrust. I think this will be a big issue on the campaign trail and its already a big issue in washington. What will happen to big tech . Could we see it broken up . I just feel like the magazine went into all of the issues and the players what you need to , know. A little bit of history i loved , it. Kailey it takes us through every single detail. Of course you can also check out our daily businessweek podcast, available on apple podcast, and soundcloud and bloomberg. Com. Carol more Bloomberg Television starts now. Taylor i am taylor riggs. This is best of bloomberg technology, where we bring you all of our top interviews from this week. Coming up it is a very complex project, and as you say, it is risky. Taylor Facebook Ceo Mark Zuckerberg describes a libra as complex and risky. More on his testimony in front of a house panel wednesday on capitol hill. Plus, amazons big bet