Will be one and that phase one will be signed. Cigna has recovered all of its declines come out with a great orderly report today. Sold a bit on the news, perhaps some people taking profits. If you want to hear what David Cordani had to say, it is on the bloomberg terminal. We spoke to them a little earlier. Guy stocks are down by just a touch. Chinese pmi data overnight also adding to Downside Pressure here in europe. We also have the oil sector lower. Ell angs out from sh little earlier on is a factor in the market. 41 on the german tenyear. The hero just beginning to slide over the last hour or so. It was up earlier in the day. We are tracking the dxy level at 97. The market seems to be paying a great deal of attention to that one. The fed cutting rates for a third street meeting, and fair for a third street meeting, and fed chair a Third Straight meeting, and fed chair they will signaling pause. Basically, we are in a manufacturing recession, but the u. S. Consumer has been resilient, and that is what he was hanging his hat on. No need for further cuts because the u. S. Consumer has been quite resilient, employment is good, wage growth reasonable. All of those things are slowing, but not deteriorating yet. Hes got a lot of optionality. He is not boxing himself in any corners. Dip on any treasury selloff . Patrick i dont think so. I still dont find them attractive. You are still losing purchasing power by buying the treasury. You are forced into higher risk assets. Youve got premium multiples on a lot of the dividend payers, but we think there are better places for treasuries still. Vonnie patrick, what are your thoughts . Have they changed in terms of the u. S. Economy, the economic outlook, and how strong gdp growth will be Going Forward . Patrick we think the u. S. Will probably come in just under 2 next year, which is probably where most economists put its growth potential. Thats basically the most you can generate without creating any inflation, and there is no inflation to speak of, so it is not shockingly bad. It is not like kudlow and trump were talking about 12 months ago, like 3 or 4 nominal, but that is probably Sustainable Growth for the United States economy. It is going to keep the fed pretty happy where they are right now, where inflation goes to 2 , roast goes to do percent, unemployment growth close to 2 , unemployment at record lows. Vonnie what are you telling your clients . What are their primary concerns these days . Patrick my concern is they dont have enough concern. A lot of our clients still have a lot of leverage and portfolios. Its been a very effective strategy. Have definitely outperformed the cost of your borrowing. I think clients have a bit of complacency that there are risks out there that they are may be underestimating. We are advising clients to take money out of record high prices and move them into regions which have lagged. Japan is our favorite area. We think to mystically orientated we think domestically oriented stocks are driven by the japanese consumer. They are not exporting companies, so this is a region trading at about 25th percentile versus its own history. That is one area the s p looks fairly valued. Guy everybody has been bearish. Theres a lot of concern in the market right now. Theres a risk that we get a melt up towards 3100 on the s p. Patrick 3100 is so close. Guy ok, 3200. Patrick it is definitely possible. We are not actively reducing positions in u. S. Holdings. We own facebook, we own apple. We are selling some of the rest of our holdings, getting softer in our opinion. You get higher yield. Not an outright bearish position, but you participate in a bit of the growth. Guy what gets us up to those kind of levels if we were to get there . If we get a phase one trade deal, where do we . Patrick if we get something that is a real trade deal and trump doesnt change his focus to europe, that is the risk. If you get a deal with china, he starts german carmakers. Then you wont get a sustained rally. If we get a trade deal with china and he focuses on the economy rather than a new target, we probably get to those levels on the s p. Theie at what point will market start to ignore the headlines on trade and move onto Something Like the 2020 election . Patrick they are both going to be very big. I suppose one influences the other. I dont think trump wants to go into a campaign that something that he can at least brand a deal. Strategic issues are solvable. No get some sort of truce, escalation of further tariffs, maybe even a minor rollback of some existing tariffs. The big picture issues are not resolvable. China doesnt want to give, u. S. Doesnt want to give. The u. S. Election is very important. We are buying something that is a big Political Risk in the u. S. Health care is another sector that has lagged. That comes with a democratic president. The s p is growing fast. It is trading below where it got to on the Hillary Clinton tweet in 2016 about price gouging. That is one sector where you get growth at a market multiple. Political risks are overstated. Rhetoric is harsher than policy, so even if we do have a democratic president , those risks are probably overstated. Vonnie we were just talking with cygnus ceo about all of this with cignas ceo with cignas ceo about all of this. If this now i moment for value to take advantage . Patrick it might be. To get a sustained value versus growth reversal, you need much higher Interest Rates or a bear market. These are very long cycles, as weve seen growth outperform value for 10 years in a row now. Youet sustained vergence, need something to change in the economy. I would rather be in value to collect dividends. Theres not as much upside in growth as in the past, but there are some companies we still like. If i had to choose value versus growth in the next five to 10 years, i would definitely have my money on value. Guy where is the dollar going . Patrick the dollar probably weakens slightly. Thats on the assumption that we get a trade deal, and basically some of the other economies that markets are pricing in very pessimistically get some from that. Sterling is seeing a bit of strength recently. I think the euro will probably strengthen against the dollar in that environment. I like yen for different reasons. You get the safe haven if things do go pearshaped. The dollar is not going to be a big move, but i think a gradual unwinding of some premium valuations. Guy Patrick Armstrong joining us from Plurimi Wealth, where is the cio. Vonnie lets get a check on global markets. Heres kailey leinz. Kailey stocks lower across the globe. Part of that is because of concern about the prospects of a longterm trade deal, as well as Economic Data in the u. S. That came in a little weak, and the prospect of a Federal Reserve that may be on hold. The nasdaq 100 actually, even just marginally in the green, you can thank positive earnings. From Tech Companies the ftse 100 down positive earnings from tech companys. The ftse 100 down, and the stoxx 600 in the red as well. If you look over the past nine days, the s p could be set for its first decline today. Thanks to some outside moves from some of the heavyweights. I mentioned weaker Economic Data. I want to take a look at the chicago pmi, disappointing in a big way. The read coming for october at just 43. 2. When we look at this in context on the bloomberg terminal, outside of a scare at the end of 2015, it has not been that low outside of recessionary periods. Boeing is headquartered in chicago. That could have messed with the data a little bit, but still not sending a great signal about the economy. I mentioned some positive tech. Facebook higher by the better part of 3 . You had record sales in the Third Quarter, as well as strong user growth. Apple also higher to the tune of 2 . Strong outlook for iphone demand going into the holiday quarter, as well as the Third Quarter that had no blemishes. Kraft heinz the best performer in the s p 500 today, now up by about 11. 3 . It beat every estimate for adjusted ebita. Haynes brands down lower by hanesbrands lower by about 8 . Vonnie going back to capitol hill now, a preliminary vote you are looking at. Speaker nancy pelosi saying she has the votes needed to pass an impeachment resolution. Can watch it on live or tune in here for context. This is bloomberg. This is bloomberg. Vonnie live from new york, im vonnie quinn. Guy from london, im guy johnson. This is bloomberg markets. Lets check in on the bloomberg first word news. Kailey House Democrats about to hold a historic vote ritika House Democrats about to hold a historic vote on whether to kick off the impeachment inquiry into President Trump. The vote is expected to break down along party lines. It will lay out the rules and procedures for the investigation. Inublicans say the process the democraticcontrolled house will lead to a preordained result. Those four months of protests have taken their toll on hong kong. The city has now entered a recession. Hong kongs economy shrank 3. 2 in the Third Quarter quarter, much worse than expected. Experts say that for hong kong to recover, tourism from Mainland China must revive. In august, it was half of what it was in january. In southern california, more than a dozen brushfires have broken out. The biggest is near the Ronald Reagan president ial library. The fires are being driven by 60 mile an hour winds. In northern california, firefighters are gaining the upper hand on a fire in one country that has burned down more than 76,000 acres and destroyed dozens of homes. It is a deal that will create one of the Worlds Largest automakers. Rivals Fiat Chrysler and frances psa group have revealed a plan to merge. The boards agreed to work towards a binding agreement in the next few weeks. Include peugeot and citroen. Psas ceo will lead to the company. Global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Im ritika gupta. This is bloomberg. Vonnie thank you. Lets stay on that deal now between peugeot and Fiat Chrysler. Joining us is bloombergs milan bureau chief tommaso ebhardt. Finally, we have some kind of deal emerging. Explain to us the details and why this time it worked. This time, it worked because a few months ago, when fiat tried to combine with renault, we had an offer on the table, so the negotiation started after the offer. This time they are coming with a preliminary agreement, which will become a binding likely before christmas. , isdeal, a combination needed because the Auto Industry is facing technological disruption, especially here in europe. At the end of 2020, they will be new rules on emissions which allow the company to boost their presence in electric vehicles, so they need massive investment. We are talking about 200 billion euros for electric vehicles in the next five years. Fiat is behind the competition in electric vehicles. Peugeot is very strong in europe. Arm is coming with its u. S. , jeep and ram, so it is a good fit for the two companies. Fiat is ticking on board what could be guy that is what i want to talk about. Fca is up by about 9 . Peugeot is down by about 11. 5 . The market clearly believes that the french are taking over here. Is that the correct interpretation . Believesthe market that fiat shareholders are gaining from the deal, and peugeot shareholders not. Why . Because fiat shareholders are getting 5 billion euros of special dividends, about 1 4 of the market cap of fiat, and get a premium in the valuation to the for the combined entity of about 5 billion euros. That is why fiat shares are up and peugeot shares are down. The reason why there is this premium is that peugeot is much more valued then fiat by investors. Managed to turn around peugeot, and he is making margins in europe, which is not common for a carmaker for a mass carmaker. Now he needs a bigger canvas, and Fiat Chrysler has the opportunity to give him the assets for the north american and south american market, especially. Vonnie is this the end of partnerships, or could there be more soon . Clearly allean, analysts and investors have been waiting for a round of consolidation in the Auto Industry. If we go back to what sergio what they spent duplicating investment by different brands and different carmakers, now that we are coming to the era of electric, didnt estimates are even more massive than before. Clearly, consolidation is going to happen. Guy tommaso, thank you very much indeed. Little bitit a broader. Still with us come up Patrick Armstrong, Plurimi Wealth cio. You dont have any cars why not. You dont have any cars. Why not . Patrick theres too much capacity. Very cheap on traditional measures. Weve had them in the past. It is a value trap weve decided to get out of. Consolidation is muchneeded for some kind of return on capital. You probably dont want to be buying the bigger ones that might be doing the acquiring. Guy lets talk about the industrial sector more broadly in europe. The data continues to be really grim. Is there any value down there . Is the industrial sector a value trap . Cars are part of it. Patrick we lump them more as consumer discretionary, but airbus we own, schneider electric. These are companies that are trading at reasonable multiples. They are actually growing. Headwinds from a Global Manufacturing slowdown are definitely there. They are trading at about 15, 16 times earnings. I wouldnt be chasing them at this point. Vonnie the president has laid off europe for the moment. What is President Trump turns his attention to europe and begins to talk tariffs in a meaningful way . Patrick it is a huge risk. That is the biggest risk i see with a u. S. China trade deal, is that it changes trumps focus away from china and he moves on to europe. I have no idea what the next step will be for trump if he gets this phase one deal or whatever you want to call it. If he does turn his attention towards europe, weve got recession as a 25 chance in the United States. I think that would definitely put us into a case of a european recession, and maybe a u. S. Recession. Anything bad for global trade is bad for the Global Economy and bad for the stock market. Vonnie what happens with your choices, then . Do you invest in europe . Are you staying away from europe . Are you looking for downturns to maybe get into spots around europe . Patrick there are some stocks we like in europe. Our preferred region is japan right now. We own unilever. Weve got the health cares. Novartis we like. Revenue coming from the United States on diabetes. We Like Companies that arent completely cyclical. I mentioned we have schneider electric. They are more cyclical. Weve got a diverse set of exposure in terms of revenues for those companies as well. Guy patrick is going to stick around. Well get more from him in a moment. We want to take you back to capitol hill. We are waiting for the big vote in the house. It is expect it to happen reasonably shortly. There is the speaker. There you go. That is the timing you should be looking at. This is bloomberg. Be looking at. This is bloomberg. Vonnie lets take you straight to capitol hill now. This is the house preparing to vote on that resolution affirming and impeachment in cory into President Trump impeachment inquiry into President Trump. Nancy pelosi says that she does have the votes to ruled for the next phase of the inquiry and to make it so that we are in a public phase of the impeachment investigation. President trump has been tweeting today. He is not pleased about this. He says the stock market will go down. We will see the results of this vote in just a few moments. It typically doesnt take long for the house to vote. We are not sure if any republicans will actually vote for this. Guy it feels very partisan. The reading ive been doing suggests that it is unlikely. Some may feel that they can cross the aisle on this one. It is fascinating. In some ways, this ticks one box, but not the other. The republicans have been claiming that this process is not open and it is not fair. We are waiting to see exactly what will happen here, but in terms of the details we are getting, the house has the votes to pass the trump impeachment measure. This is goingike to get done. Does this end the process of the fight you have been mounting . Are we going to start to see the trump side being able to get involved in this process . It may be open. The question, is it fair . Danielle the house vonnie the house has the votes on this impeachment measure, but effectively that is done. We have the votes in the house, which means that nancy pelosi has got her way, and what she said earlier on was true. She did have the votes. The impeachment investigation moves to a more public phase now. Lets bring in bloomberg chief washington correspondent Kevin Cirilli. This wasnt unanticipated, but there are consequences that could be pretty explosive. Explain to us what this really means for the president. Kevin this is the first step in the formalized impeachment inquiry process that Speaker Nancy Pelosi has laid out. From here, what happens is a much more public showing of the impeachment process. A lot of these hearings that were behind closed doors with key officials regarding that phone call between President Trump and the you came president , and Rudy Giulianis role in that, now come to a much more public showing. Anticipate that the three congressional committees that are working behind closed doors on the impeachment process are now going to be having much more public hearings. A lot of the transcripts that folks testified on could be released publicly now as democrats continue to move forward with this. We should note, this is a largely partyline vote. Theres rumblings, and we will get the final vote count within the next couple of minutes, that one or two democrats broke with Speaker Pelosi on this. No doubt, that will add to President Trump saying that this is a largely political operation. Where this goes, this will be more public, more contentious, and quite frankly, the timeline on this is very quickly emerging, whether or not they can get this wrapped up by the end of the calendar year remains to be seen. Guy the question is, is this going to be more fair . Given the fact that we are not going to see trumps lawyers be able to be involved in the process until we get to the judiciary committee, the criticism will persist. , the votesbeyond that simply do not exist in the Republican Controlled Senate for there to be a conviction of the impeachment trial, should he get to that point. In terms of procedure, from here , public hearings. From there, articles of impeachment. Then you have that brought to the house floor. Then it goes to the senate. Senate Majority Leader Mitch Mcconnell has suggested that he has no choice but to have that process play out in the senate, but there are a couple procedural items that he could use to quickly move along the process. This is just the first step in what will be a long process. Whether it happens before the end of the calendar year or this january, we do not know. Vonnie we are going to House Speaker now, nancy pelosi. The gentleman from missouri seeks recognition. I request permission to speak for one minute. Any objection . With that, the gentleman is recognized. Vonnie you heard nancy pelosi there. She is obviously overseeing this process. The house has the votes to start the public phase of the trump impeachment inquiry. Theier, she addressed public, saying a decision has not been made on impeachment. There is a long way to go before that would be a question, but now the next phase begins. The more public phase, as you heard Kevin Cirilli mention. Lets get back to our chief washington correspondent, Kevin Cirilli. We have not had an Immediate Reaction from the president on twitter. Obviously we had a tweet earlier on completing about this. There have been a string of tweets almost daily on this. Reaction can the white house have . Kevin i want to bring you some breaking news in terms of the actual vote. No republicans voted with democrats on this but there were two democrats who voted against Speaker Nancy Pelosi. The first is congressman jeff thez jeff kuhn former from new jersey, the latter for minnesota. Both voting with republicans to not move forward with this impeachment inquiry. No doubt the political applications of this will be dissected in the state. In the days to come. Not exactly a partyline vote. The reaction from the white house is a push forward. From here, the president will hold a Campaign Rally in a key battleground state. He will head to pennsylvania. They are labeling this a witchhunt rally. Republicans really holding firm on this. They feel this is largely a partisan political account and from here public here more public hearings will be spent on this. The first step on the process now officially underway. The fear guy the fear for the democrats is that the 2020 election would become about this. Is this now what is being talked about . Is this what is going to dominate the political narrative moving forward . Kevin yes. I spoke with a senior democratic strategist last night about this. What essentially this strategist told me was if you are a member democratic president all campaigns, senator bernie molly harris,or the senators that are part of congress, they are going to want to spend time on the campaign trail. Instead, they will be here in washington, d. C. And the capital as they navigate through all the different complexities and votes with regards to impeachment. That poses significant risk for them as they continue to go through and inch closer on the campaign trail. Beyond that, it prevents a significant hurdle in the sense that they have to get their name out there. They have to use media, give interviews. So much of the coverage will be dominated by the issue of impeachment. You are correct. This does pose significant political hurdles not just for republicans but for democrats. President vin, the actually tweeting just now. The greatest witchhunt in american history. This is something we have heard him say before. Now there has been a vote in congress. Democrats have overwhelmingly made this happen with the exception of two more conservative democrats. There is going to be a public process now and the impeachment inquiry will continue. What is Nancy Pelosis strategy from here . She had been opposed to this and suddenly she did a 180 and is going full steam ahead. She does not want to lose this, does she . Kevin so much of the focus has been on republicans and how they are navigating this. You are correct to point out the significant political challenges that the democratic controlled speaker of the house faces. She has to hold together to from the Democratic Party democraticsocialists like alex alexandria ocasiocortez. Impeachment with something was something the base of the party has wanted, but it was not until the moderates got on board that she jumped in here on this. For the speaker of the house, she has to make sure this is something she can sell not only to the base but also to moderate members. Guy what does this mean for the rest of the agenda, the breadandbutter business that congress would normally be enacting . What is a mean for usmca . What does it mean for the breadandbutter issues . Kevin i have been told repeatedly by lawmakers, by congressional aides, lobbyists, strategists, that the issue of usmca is that impeachment has made it more likely that usmca will pass. Here is why. Democrats want to be able to tell the american people, tell voters that they are able to get through key policy items even as they are going through with the impeachment inquiry. President trump, republicans want to say they have been able to deliver and work with democrats even as they have been dealing with the impeachment process. Be the oneised to area of bipartisanship that lawmakers in both parties are able to get to work on. Vonnie i am going to break in here. We have had a statement from the white house and it does mention some of these other issues that the white house contends democrats should be thinking about rather than being upset with the president. The president has done nothing wrong and the democrats know it. Nancy pelosis unhinged obsession does not hurt President Trump. It hurts the american people. Instead of focusing on issues, the democrats are choosing to waste time on a sham impeachment , a blatant partisan attempt to destroy the president. There is one more paragraph. Vote, Speaker Pelosi and the democrats have done nothing more than an unacceptable violation. The final line is, this is unconstitutional. Will this hurt President Trump at the polls . Kevin what is fascinating about the polls is if you look at National Polls there has been widespread approval in terms of support for their being in impeachment inquiry. So much of the polling questions get more dicey when you look at whether their support to remove President Trump for office. Here is why those are difficult to read. Particularly in conservative states where the president enjoyed widespread republican support in heartland conservative states, those voters are against the impeachment inquiry and the president being removed from office. Election ishe 2016 shaping up to be put centrally the 2020 race to be potentially a 2020 race. That is why youre seeing people like senator Lisbeth Warren and playing torump pa their base. Vonnie we are not seeing much of a reaction. The s p down about half a percent right now. Kevin cirilli, thank you. I want to recap that now there are votes in the house to send donald trump on a house towards but eventually becoming the third president in history to be impeached. The house passed a resolution that kicks off the public face of the inquiry that now is accelerating. Idea and strategy was borne out today in the boat. The president in the vote. The president has reacted, saying this is the greatest witchhunt in history. The white house has issued a statement saying it is unamerican. We will be back in just a moment with more on this and we will return to market coverage as well. We tech vonnie live from new york, im vonnie quinn. Guy this is bloomberg markets. Lets talk about what is happening in the banking sector. Bnp paribas posting a Third Straight gain. It kept costs under control. Bloomberg talked to the banks cfo. Productse go back to g10, weit or on the stay there. There was demand and we have adapted the bank so it could serve the clients in a digital way, in a personal way. That led to a positive relationship. Guy the numbers looked ok. At stock trading lower, 46. 67 right now 46 62 seven cents right now. 46. 67 right now. We had jeff daly say ive got these great numbers in equities but dont get too excited because brexit is around the corner. I have a dodgy u. K. Economy. With ony, bnp came out one hand, on the other hand kind of numbers. Tothe other hand, he pointed the campaign the European Bank ceos have been talking about, which is negative rates. It did not kick in in this quarter but looking toward 2020. To convincemanage people there was another leg up. It has been on a defensive run. It was not quite enough to get that next level. Vonnie it does seem like some of the banks are going into Wealth Management and that will be there baby and religion and they will uber up all the r up allf hoove the wealth of possible. How does Monetary Policy help or hurt them . Keith a year ago or two years ago, we were talking about a bank like bnp becoming the jp morgan of europe. That was the kind of ambition they had. They did not have the same structural problems as a Deutsche Bank. In the Third Quarter, you saw a macro situation that was unsettled. We saw a big change in the attitude of what is going what was going to happen in fed policy. Mr. Draghis tenure and changing to more dovish policy there. Those are the kind of things that in the markets you can say brought in the volatility that these need to make a little bit more money. Guy thanks very much. Vonnie thanks, keith. lets bring in the Patrick Armstrong. You own bmp bnp. Why . It is competing against other investment banks will everyone else is retrenching. German banks cannot compete anymore. It does well in the corporate banking. Retail banking is a headwind with negative Interest Rates. Way bmp can do that at this stage. It is a dividend play. We do not think there is a lot of upside. Very good returns on capital versus the peer group but it is more like utility now. We sold other European Banks one by one but bnp we are more likely to seldom be buying up European Banks. Guy u. K. Banks look cheap with brexit looking easier right now . Patrick . Possibly we have been buying bonds. You get a 7 yield in dollars. That is the kind of return im so iting from banks prefer it with more safety from a bond. Great on a u. K. Unit. I was stunned by how they are at barclays. All around europe, we have more exposure in u. S. Banks. They are more expensive but more sustainable and pretty double. Go over the liberties of the big banks. Ies ofbout validit the big bang spread what about the italian wants . Big banks. Oat about the italian nes . Patrick patrick they are not as big as they were in 2011. It is something we are not investing on the equity side of things. If you want bond side, i would prefer the u. K. And french banks. Patrick u. S. Banks vonnie u. S. Banks any interest there . Patrick we own jp morgan, citigroup. We think they are all reasonable. You get a bit of upside. The economy in the u. S. They have better run banks, less employees. They have good franchises in Investment Banking and Wealth Management. I pay a premium multiple on u. S. Banks than europe. Guy it is halloween. It is my sons birthday and the day brexit was meant to happen. What do you think of u. K. Exits right now assets right now . Are they cheap . Do seeby domestic if you a brexit deal done . Patrick we have changed our view on sterling. We were short and we have closed the shorts this month because the no deal brexit is not a real risk anymore in our opinion. I am not really chasing investment in the u. K. Right now because you still have a lot of issues with an election coming up. Are we going to have another minority government . Are we going to have labour get in . We are past one initial cliff. We have another cliff. If we have a conservative majority, we may have a cliff ahead in December Next year. There are still headwinds for u. K. Assets, u. K. Economy. Ignoreu are prepared to the pop you could get in u. K. Assets were there to be a deal done because you think that will fade. Patrick i think that will fade because the deal that will get done is the bojo proposal and i do not think that is a real deal. That is a transition at a think we have another cliff edge in december 2020 if we do not have another done by then. Do you think the bank of england would cut . Patrick i do not see any scenario where they are hiking. Some are talking about a hike scenario now that weve gotten past this edge, but they had a strong sterling this month and that is doing a hiking point already. I do not think you want to hike with a strong currency right now with political uncertainty. Guy patrick is going to stick around for joining us from to marry wealth plumiri wealth. Vonnie we have Western Digital down 14. 5 , down as much as 18 at one point after providing a disappointing forecast for the quarter. The ceo also announced his retirement. Lets get the taylor riggs in San Francisco to explain more. Taylor the biggest oneday drop at one point going all the way back to a year. This picture today does not look pretty. What analysts are saying is it a sort of a perfect storm of a bunch of things that are going on. There is a lot of concern about prices, recovery. Theres concern about the turnover in the ceo office given their has been other turnover in the cto and cfo office. There have been concerns about end market demands. Some of these are apple, samsung. Sort of all of that painting a picture today the does not look good. One of the fundamentals i want to focus on for those prices and the chartcovery is all about those prices. Western digital gets a lot of the revenue from. The stock is in white. A lot of analysts have thought this recovery in june of 2019 was going to start to improve, except they all started bowling over again in the last few weeks, the last few months. That is the big concern. Those prices were starting to recover. We are not seeing that. Prices and stocks are typical gordon aided. Coordinated. One analyst said some people think on a pullback we would buy but he said we are not sure given the concerns i highlighted. This is what makes markets. Capital analyst said we are advising investors to buy on the dip. They think the recovery is intact. I guess that is what makes markets. Vonnie taylor riggs in San Francisco. Tune in later to see her. Coming up, or global battle of the charts. This is bloomberg. This is bloomberg. Vonnie it is time now for our global battle of the charts. You can see the charts on the bloomberg by running gtv. Kicking things off is guy johnson. Guy lets talk more about the European Banking sector. We were discussing bnp in the last block, talking about what the numbers look like and how analysts have been reacting. Bnp share price is something of an outlier. As Patrick Armstrong talking about, bnp is exiting some of these positions as the year has gone along. Analysts are broadly behind that view. I want to show you that chart. It goes back to 2011. What you have is the European Banking sector and blue. That a share price performance. What youre are looking at is the schechter sector share price expectation. What we now find is a situation where we have the lowest forecast price target for the European Banking sector on record. A lot of people were anticipating this would be a factor give the valuations we were seeing. That was premised on the idea the european economy will be recovering. All the data now suggests that is not going to be something that happens imminently. Through 2019 targets being lowered and lowered. Waslue trap if there ever one, many people would argue. We expected the European Banking sector, the european economy to recover. As the european economy has failed to deliver, that has rolled over. Analysts have tracked that lowered. You only have to look at numbers by the likes of Deutsche Bank to appreciate this. The book values of some of these institutions are incredibly low. Basically, i think what is worth taking away is this is a story that is not recovering anytime soon. Targets are the lowest on record. Vonnie excellent chart. Wonderful presentation. I think it deserves some looking at later on. I am going to throat out to alex. Alex this is the battle of the value charts because this is something similar. The yellow line is wti prices. The blue line is where we are for oil and gas. Are the big guys, oil and gas companies. This is on a normalized basis over the last two years. You can see how big oil has tried to outperform and just barely made it. A big part of that story is dividends. The perfect example is what we saw this week. If you are an e p company and raise your dividend, everybody likes that. If you are a Big Oil Company and , werentlike shell did clear if they were going to meet their target, that wound up hurting you. It is about dividends, not just value. Alix. well done, i cant wait to see what yous got on what youve got on commodities edge. I am giving neither view the winning crown for halloween. I went to be a little wit chy. It is like a tie but a bad tie. Vonnie you will have to go trickortreating to see if you can get a win from 70 else. Happy halloween to both of you and dont forget to join alix steel an hour from now. From new york and london, this is bloomberg. David from bloomberg World Headquarters in new york, i am david westin. China may have given up on the overall trade deal with the United States. The formal house vote to proceed with impeachment inquiry. How impeachment proceedings could complicate things. There is a report that china said we would do this phase i deal but we dont have hopes of doing an overall longterm deal with the United States. This was based on reporting we have done for a few weeks based on chinese officials and people meeting with chinese officials in beijing. The Common Thread that we get at of all of those conversations set the chinese are looking very skeptically at the possibility of anything beyond that phase i agreement, saying they are not going to move off of their
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