Transcripts For BLOOMBERG Bloomberg Surveillance 20240713

This is bloomberg surveillance. Im Francine Lacqua here in london. These are your markets. Global chief economist. A lot of the focus is on the next, the mastercard trade war. A lot of the focus is on data executive vice chair on out. We see pound. Diversity and her thoughts on we are of course watching that because we are one month exactly the apple card gender bias issue. From the early election, this is bloomberg. December 12, and the u. K. After the brexit party said they will not expand conservative seats. 1. 93. 0 year yield at coming up, we will be speaking to musabbeh al kaabi, the chairman of Mubadala Petroleum at 9 30 a. M. U. K. Time. That is manus cranny bringing that live. Lets kick off the show with the latest from hong kong. Rn that the city is on the brink of total breakdown as protesters rocked the citys financial district to a standstill. The chaos follows a flareup in violence after the first fatality linked to the protests. Is it different from yesterday . Is the mood better or worse . Be it is ato little bit better in the sense that someone has not been shot. That is a good day these days in hong kong. There has been a lot of clashes, a lot of students gathering oncampus, growing things out of bridges, trying to block roads. There were a lot of protesters storming into the central financial district, closing roads, clashing with police. Police fired tear gas a short while ago. We are still in a situation of sort of turmoil and chaos here. Maybe not as chaotic as yesterday but still pretty bad. Francine have carrie lams words fallen on deaf ears . I think so. She came out and said both this morning and last night in a press briefing, it was nothing new to the people of hong kong. She condemned violence, stood behind police, urged people to be calm, rational, not to participate in illegal rallies. She is not really addressing the protesters. Protesters have kind of long stopped listening to what she is saying. She is addressing the moderates and others in the city hoping that intellectual tide will turn against these protesters as violence increases. We have seen signs of worrying mob violence in the last couple of days, including one man set on fire yesterday after an argument and a couple of other attacks which police have pointed out. It is still a very tense situation at the moment. Francine thank you so much. We will of course continue following these developments very closely. Lets get straight to the bloomberg firstorder news. Good morning. Angela merkel has signaled support for a European Banking Union. Official an francine bloomberg surveillance. From london and endorsement, her approval of the finance ministers plans suggests new york. Tom bloomberg hosting the under suggests a willingness breakaway economic summit to explore the policy. Discussing challenges building a years of debate have failed to produce any results. Diverse and inclusive community. I am joined by the executive eu Foreign Ministers have voiced mastercard nice chair who has concern over irans uranium enrichment activities. Done vice chair, who has done enrichntrys capacity to a lot for inclusion and has grown 25 fold since it began diversity in the workplace. Thank you for joining as. Violating the landmark nuclear deal. We have had conversations about continues tot what to do to keep women in the cooperate with the International Workplace and track them. Atomic energy agency. In the last couple of days there Steve Wozniak says the company was a story about the apple card he helped start is guilty of having gender bias issues gender bias after its credit because of artificial intelligence. When you read this, and when you looked into it, is this one of card was alleged to discriminate based on gender. He told bloomberg that the the problems we have not algorithm was not at fault. I dont believe looking into foreseen . That algorithms could be gender bias . The discussion about the algorithm is a solution. Algorithms and how we design i dont believe changing the them is well discussed in the algorithm is a solution. It is somehow able to get industry. Today many people are rising programs that protect bias and individual attention in cases the algorithm misses. The threats of wildfire in detect by assigning australia has intensified. Algorithms and take it out. Francine when you look at the authorities have issued multiple emergency warnings for blazes breakaway summits, you have gone on the record speaking about about 300 kilometers north of sydney and further up the coast, issues that you faced up the sang in some cases it may be too career ladder, are we getting late for residents to leave better or is it still too slow . Safely. Global news 24 hours a day, but it is still too slow onair and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Everyone i meet in industry wants to address this issue. There is a feeling we need to be this is bloomberg. Francine . Paying attention to inclusion. Francine thank you so much. I think ceos are very clear in President Trump is expected to their mind that it is all about delay imposing tariffs on european cars. The culture of their companies. He said he would decide on the tariffs by the middle of this when it comes to that i know month last spring. That at mastercard we talk about decency rather than diversity the eu threaded to retaliate and inclusion. With duties on 39 billion of american goods. Decency if you apply efforts by german automakers to highlight their new investments dealing with people you cover all those issues. Francine our Financial Services in the u. S. Have helped in is james athey behind because of some of the from aberdeen standard culture changes we were investment. Expecting that are a little great to have you in the studio. Slower . Ann financial are definitely when we look at the trade behind. Concerns, they kind of escalated a little bit and deescalate. You can see that in the numbers. In britain the numbers are how would you describe them now . James yes, a little bit like a published of gender pay gaps and so on, and we havent seen little tango. Women move up as quickly in this sector as in other sectors. It is quite a lot of stuff that seems of substantiated that eyes with the coo of Intercontinental Hotels group. Seems unsubstantiated. I think you have to be careful he has a very different a and make sure you are listening to the right folk. Range of both gender and it seems like yesterday between different cultures and so one in President Trump and peter navarro, they poured a little his group. Francine do quotas work . Bit of cold water on the ann i think quotas do change markets assumption that phase i was done at tariffs work going to get done and tariffs were things in countries. You see that in germany and going to get rolled back to a fairly large degree. France. In britain we dont like quotas learn aboutted to because we would rather get the culture change to work to have people move into positions, but in the 30 lobe we move from 12 the eu tariffs. The reality is that underneath to 30 women onboard board all of this, there are still putting a problems which are over and above this spat. Francine what do you see without quotas. We convinced the ceo and chairman and board that this was happening with the car tariffs . This is a great chart looking at a good thing to do and they auto imports making up about 23 moved. Francine when you look at of u. S. Auto sales. Investors, do they ask about ere tariffs, does diversity . Should that be a prerequisite . Will that make things move quicker . This hurt european car sales ann the thing about investors disproportionately . James you would think so. Is they look at the numbers. The european Auto Industry looks they are real data freaks. In pretty grand distress at the moment anyway. They see the companies that have there are so many factors at play. Autos incredibly cyclical. Diverse boards and management in many western countries, we that and the companies have policies in the immediate dont. Aftermath of the crisis which what that causes is investor pressure to get the company they forward demand for autos. You have problems in germany are investing into Pay Attention with emissions standards. To this, because it is good for you have the move towards business. Francine thank you for giving electric vehicles and that is not great for those that manage us a little of your time. Internal Combustion Engine executive mastercard vice chair driven autos. And 30 club global vice chair. Unemployment has been falling but it is falling at a much tom we are looking at the slower pace premuch everywhere. Ination is not markets on Foreign Exchange this morning. We have pretty much flat across moran exchange. An. The next hour, ed hymja good for european automakers. Francine because we are looking when it comes to using data, at elections in the u. S. , for jodys in the chinese economy, is your base case problems in the chinese economy, is the base case james i think the phase i agreement is just the veneer of anything relevant. The titfortat escalation was obviously not getting anywhere. It was just increasing distressed between the various distrustisc trust between the various parties. I think six months down the line, we will be having this conversation again and it is all about election. Dealing with china is a bipartisan issue in the u. S. Cash even as u. S. Stocks climbed. That is my chart of the week probably. Last time so much money went into cash was in 2008 as a financial crisis was heating up. You look at this chart, as a market participant, you forgot. Freak out. James i do not freak out at all because it is something we have been forecasting. Recession is inevitable. Youre are dealing with complex systems, very dynamic the relationships between all sorts of variables. I dont like economic models at all. I think they are worse than useless. There is not long left to go in the cycle. I think we have seen the best of it. Forwardlooking investors are looking at things and saying, you know what, i am on the right side of the debate at the moment. Francine why not go to cash . James that should form part of a balanced portfolio at the moment. Everyone is different. Having 100 cash at this stage is extreme. Which is why Xfinity Mobile is a different kind of wireless having 100 equities is extreme. Network that lets you design your own data. We advise longterm investors to choose unlimited, shared data, be quite diversified. Or mix lines of each and switch any line, anytime. Cash returns in the u. S. , u. S. Investor cash returns are reasonable. Giving you more choice and control i think you should have an compared to other top wireless carriers. Allocation of that. Ey stays james ath save up to 400 a year when you switch. With us. Plenty more coming up, including plus, get 50 off when you buy any new lg phone. Could it be at the end of the impact . Xfinity mobile. Click, call or visit a store today. Is a European Banking Union about to happen . We will discuss that next. The streaming shutdown showdown heats up. Today unches launches today. Can it catch up with netflix . This is bloomberg. This morning, s p futures near a record high with this bull market, how far behind you how far behind are you and what would you do about it. Kong will add a tipping point. Protests at the university of hong kong. The president was pizza wall street will speak to wall street. Im tom keene in london and Francine Lacqua german Economic Data came out in a sort of like all clear like maybe things are getting better. Francine they are more hopeful about afterwards. This is partly due to to what we heard with some of the politicking and maybe germany is a microcosm of other parts of the world. Ticket with salt. Tom always to the moving average. In london, with our first word news. Reporter good morning. Trade. President trump expected to delay imposing tariffs on european cars. Last spring he said he would decide on them by the middle of the month. In return, the eu threatened to 38liate with tariffs on billion of american goods. Helped inomakers have francine economics, finance, politics, this is bloomberg surveillance. Im Francine Lacqua here in london. Negotiations. Lets get straight to the Bloomberg Business flash. Assassinated a senior good morning, francine. Gazander of a group in french phone carrier iliad is returning money to investors. City. The company will pursue a 1. 4 palestinians fired billion euro buyback financed by its founder in a move that could rockets. Significantly boost the in australia, the threat from billionaires controlling stake in the company. Wildfires is even worse. Shares rose the most in 15 years. They were bearing down on rural the owner of Jaguar Land Rover communities along the east coast. A fire broke out in a suburb of has made no attempts to find sydney. Partners for the beleaguered brand. Soaring temperatures and strong tata group has approached wind could make conditions more carmakers, including geely and dangerous. Global news 24 hours a day on air and tictoc on twitter, powered by more than 2700 journalists and analysts in more bmw. Than 120 countries. It is hoped an alliance would this is bloomberg. Geely says no talks have been tom thanks. Held. Wework is looking for a new ceo. Equities, bonds, currencies, candidates included the tmobile had and he has a ready spoken to commodities, movement in the the company about the role. They stress the company intends market, futures up 3. Oil does nothing. To consider a larger pool of francine . Potential leaders. Burger kings fake meat burger francine pound, one of the biggest things we should be has landed in europe. They start offering the rebel watching tour december 12. One month away. Whopper today in more than 2500 shows, according outlets across the region. It is one of the biggest product to analysts, that the nigel launches in burger king history faraj news yesterday has been and the first big restaurant deal for you know lever priced in. Unilevers plantbased patty. Stocks edging up. Less headlines on the trade war than the last couple days. Francine . Francine chancellor angela tension in hong kong affecting trading. Merkel has signaled her support for European Banking Union. While not an official that,le bit of focus on endorsement, the german leaders when it came to asian markets. Tom graphic representation. Approval suggests a willingness to score the policy. A Bank Deposit Insurance scheme between deficit last year. This year, customs receipts of was the keep other of europes the usa. Strategy to overcome the sovereign debt crisis. Years of debate have actually it is rare to have such a wellbehaved trend from 40 failed to produce results. Ingo straight to years. Form, two, 3, 5 standard deviations up. Germany now. Is Angela Merkel signaling a that hockey stick is how you breakthrough . Yes. Define a trade war. Francine protesters gathering she basically says europe needs to move ahead. She is aware that germany has in the Central District of hong kong. For an update, joining us now, been standing on the brink largely because of her own party our bluebird asia government , because the party is basically editing manager. Opposed to committing to a deposit scheme. Yesterday, it seemed like a she knows exactly this internal blockade needs to be broken up. Day of turning points. She has signaled for that reason support for scholz to move are things quieter today . Ahead. Francine you spoke to germanys that seems quieter. Finance minister recently. What has prompted all of this . Domestick there is the pretty much the same. Teargas in central again. Debate is basically overwhelming. Stance. Eeds to make a it could have been worse. Protesters were using bows and he needs to show that he is in arrows, dropping heavy objects the news. He wants to run his spd party. From bridges. We could have seen some horrific this is vital for the government things. Basically. This is also why Angela Merkel they didnt play out like that. Is supportive. We did not see any gunshots. In that sense, it was better. She knows that she cannot afford at the moment that internal the morning rush hour commute debate in the which was disrupted. Is going to cause a disruption znd might lead to failing schol another day of chaos in hong kong. Tom what does tomorrow bring . As a Party Chairman and as a dan it could bring more of the consequence the ground coalition. We should look really on a same. They might take a break. European level, germany has been neither side is giving in. Standing on the brink, but at the protesters are sticking with the same time, it does not mean their demands, still taking to that germany is actually making the streets, still using necessarily the concessions that violence as a strategy to the Banking Union and the achieve their political goals. Beijing says it will not work. Deposit scheme is coming soon. They are not budging on their that still needs to be negotiated. Francine thank you so much. Side either. We will have plenty more from tom thank you. Eda moment, we will speak to berlin throughout the day. Still with us, james athey from about his view in his ear aberdeen standard investment. We saw the opinion piece from olaf scholz last week, it was a forward year forward. Bit of a surprise. He is absolutely definitive in a lot of people poured cold water on it, saying this is the market economics. First step, certainly does not mean they are ready to play he stands with a black pen at their part in the insurance scheme. Will we have a Banking Union his desk telling us what is that works in our lifetime . James can i pour a different going on. Right now, we need to look at type of cold water on instead . Asia. Francine go for it. You have always had an american james the political will is one centric view. Thing. The political will across the do you look to the asian turmoil Broad Spectrum is another. I am not sure that it isnt and see this as an opportunity necessarily solving the problem. Essentially, one of the problems for International Equities or do you stay away from hong kong and of the euro zone Banking System focus more on the u. S. . Ed i think you stay away from is not the problem of the euro zone Banking System, the hong kong. Fragmentation and persistence of nonperforming assets and the asia will be where it is at for the next decade. We have to get china resolved price at which they are being marked. Before that can be true. Essentially, you still have not u. S. ,ill grow faster than cleared the decks from the damage done in 2007 onwards. A the u. S. , you had tarp, then anyone else. Right now, i am focused on u. S. Fed easing. Very large and Successful Program in taking away these growth is bottoming. Underperforming or nonperforming assets in a way whereby it will pick up 2. 5 next year. Banks can recapitalize and tom what are your thoughts on get back to the business of using u. S. Multinationals as lending. That has not happened in the euro zone. A Banking Union will not resolve proxies for International Investment . That. Francine will it resolve consolidation . James i dont think so. You have to recognize there is a big hole in the balance sheet. Can i express an Asian Investment with u. S. Big companies . Ed that sounds right. The other key thing is that investing in china is difficult there is conditionality from the now. German side to be attached to any Banking Union anyway. That is to say it seems they government is cracking down more would like risk weighting or than in the past. Domestic sovereign bonds not to as they say, i dont investing be zero. That is a huge problem, because countries. I invest in companies. Suddenly, the italian banking i will stick with that. Model of recent years, which has francine you investing just been to load up on btps, borrow money for cheap or Free Companies affected by countries. From the ecb and play the carry trade, that does not look like if something turns ugly and hong quite a successful model. Whateverple cant buy conditionality, they by, how much does that that looks like a bit of a showstopper already. Francine what do you do with european banks . Impact investors invested in james i certainly would not own luxury stocks or companies that have a base and hong kong . Them. Youre talking about the end of ed there is a situation that is a long cycle, a cyclical asset, very ugly and hong kong. A sector which has got huge problems structurally and i do not see with the end game as. Cyclically. Whether it is hong kong or it does not seem to me there is a huge lot of value there anyway. Companies like Luxury Brands you factor in the low yields, lowflat curve, the lack of impacted, it is a big world. Placesre lots of other interest margin availability, it Luxury Companies can do sales does not look like a place i want to be. What is there to in. How do youverall, consolidate . I know it is a catch22 what look at geopolitics impacting if they consolidate . Markets . We have a big story saying ubs i know it is a catch22. James if you go back to the Wealth Managers are worried that consolidation we have seen thus the worlds rich get out of far, and italy the biggest stocks and go to cash. Ed i dont think so. Quantity and percentage of nonperforming loans are held outside of the agreed use it has been the story for the mples in cyprus and greece past decade. Right now, market is climbing a egregious examples in cyprus and wall of worry. Greece. May be if you get to the other i travel around the world. I was in japan this past week. Side and have a consolidated Banking System in the euro zone and have cleared the decks in people are not pessimistic. Terms of bad assets, potentially theyre not optimistic on what there is a good investment there but that seems years, if not decades of. Francine james athey from the stock market will do. Cleveland, people aberdeen standard investment stays with us. Nigel farage agrees not to are cautious. Tom two birds with one stone. Candidates in more than 300 constituencies. Pmis, we remember m1, we will discuss what that means for the u. K. Election. This is bloomberg. M3, my m2 has slowed down. Change everything. Now it is pmis. Many recession, bottoming process within global pmis. Do you believe in pmis . Three favorite economic indicators. Pmis are one of them. Of the three, there the weakest now. Tom ok. Pmis of value. Talk about a mini recession bottoming process. Re out of a mini recession . Ed we are not out of it. It is a bottoming process. Central banks started to ease beginning of this year, at it for 10 months now, 11 months. Globally, 50 emerging markets in my work indicates that is lifting the stock market, like the dax. Up 25 this year. The dow is up. The Economic Data will be better. Tom we will talk about the forecast. I want to ask and when we come back, simply, how do you catch up . Mr. Hyman with us through this forward 2020. The president of the u. S. On trade and Economic Policy, today, i am sure he will have a few other themes as well. This is bloomberg. Francine this is francine this is bloomberg surveillance. Im Francine Lacqua here in london. Lets focus on germany. We get the survey out shortly which may shed light on the economy. Lets get back to james athey from aberdeen standard investment. I had someone yesterday coming on, an economist saying that tom good morning. Europe presents a great opportunity because it is unloved at the moment and Francine Lacqua in london, im germany will start growing again tom keene in new york. Because of the cycle we are in. Ed hyman is with us. James poor thing. That is one way of looking at a market look. It. To be per jordan for about a percolations with a wide little bit, there is an element about it apejorative disparity of where Economic Growth will be of a bottoming process. Little bit, there is an how does that occur . One, it has mainly element of that. Been central bank policy. The fed tightened. My concern would be european equities have been outperforming recently. That does not tell you everybody now they have cut rates back is negative on the european outlook. I think that is a trap. Down. Tightening,ss of p. E. s are lower in europe than stock market got clocked in the u. S. And therefore europe is Fourth Quarter last year. Consumer net worth, the economy has more value than the u. S. Slowed down. I would disagree completely. Recession mini corporate earnings are a function of the economy in almost all cases. Recession. That simplistic analysis is now, markets are beginning to pick up. Missing the woods for the trees. You look for a collage of francine what can germany do . Indicators like the korean stock what can christine lagarde, you market, the price of oil, copper. Know, sway germany to do . All of those are doing better. Is it fiscal spending . Is it trying to keep the ecb we are in a bottoming process. The companies we survey every Board Members on side so they dont look so divisive . Week, that is doing a little james mario draghi has moved better for the past couple weeks. On. The has got to be some i am slightly encouraged. We need more time. Forgiveness amongst the tom you have provided a public governing council, Board Members for madame lagarde as she settles into the role. Commitment to the Economic Club they have just eased. Of new york. What question would u. S. The there will be not much pressure president would you ask the on them to do much more. During that time, she can get comfortable in the role. President of the u. S. Today . What can be done . Be fort his plans might somethingicy would do fiscal stimulus . Towards helping growth and tom how can you do stimulus potentially if it was investment in infrastructure, it could be longterm productive. With a 1 trillion deficit . Ed easy. That still does not deal with issues. Rlying tom print money . Ed [laughter] you are trapped into this onesizefitsall Monetary Union which does not fit anybody. That is passe. It is inevitable you will continue to see stresses, strains, volatility in the euro zone essentially exporting destabilizing forces into the genuine tax cut for low income economy. People. Francine coming up, the streaming showdown heats up. That would be hard for democrats disney. To vote against. launches today. That is what i would ask. Francine what would you ask him can the new kid on the block actually catch up with netflix . About the fed . We will talk about exactly what ed i would ask him to stay you need to be watching. Plenty more on that. Away. We will have plenty more on he makes their job more corporate stories. Next. Cussed brexit difficult, not easier. Fed isetty sure the we look at gdp and we hear from the chancellor. This is bloomberg. This is bloomberg. Tuning that out as best they can. Their main goal is to try and repeat 1995 cycle adjustment extending expansion for five years. Does the trade war get better or worse from here . Ed stays the same. Iny will not add new tariffs december. I dont know if they will come up with a deal before the elections. If it is a deal, it will be small. Issue, that is receding a bit, as you can tell, because markets are up pretty much around the world. Hymanne stay with us, ed of ever core. Could it be the end of the impasse after years of discussion into European Banking Unions . Caney launches today but the new kid on the block catch up . This is bloomberg. Kongs financial district is paralyzed for a second day. Protesters block subway lines and clash with police. The city is on the brink of a total breakdown. Expect delays, President Trump push back on deals with automakers. Boris johnson seeks to capitalize on Mario Draghis epic decision. It action day is one month to date election day is one month away. Good afternoon. This is bloomberg surveillance. Im Francine Lacqua in london. The unlimit rate between july and september fell into three point 8 , a little bit better than expected. Basic estimated 3. 9 wage, this is the one you watch out for to see any possible slowdown consumption, so wage ratherhas slowed to 3. 6 than the estimated 3. 8 , so still above inflation. This is for the month of july, august, and september. I would suggest pound probably moving on the back of polls regarding the early elections rather than wage growth for the moment. Lets check on the biggest suck movers. The biggest stock movers. The biggest on the stoxx 600 today, the biggest is iliad, the french carrier. ,. 4 billion euro buyback guaranteed by their billionaire backer, exam fear neil. We are seeing shares rally. 6. 5 to meet the buyback price, which is 120 years. Francine this is bloomberg survillance. 120 euros. We are not there yet. Angela merkel has signaled Semiconductor Sees a support for the finance ministers plan. Ine for midteens growth, overcomekey pillar to 2020 now it is trading at the highest price since may. The sovereign debt crisis. Years of debate have failed to produce results. Infineon, also a bright and joining us from berlin, our outlook. They reported a b on their segment profit. German news government reporter. They see about 5 growth in when you look at the idea, that 2020. The ceo said they are feeling the effects of a weaker auto the eu will have a wide bank market. Deposit insurance, this will and says that the market is likely not going to recover only happen if germany backs it until the second half of next is there appetite for . Year, but still, shares rally reporter the appetite has been and within 5 today, francine. Tom dani burger limited. Francine dani burger with your they have broken a taboo. Stock movers. Leighann gerrans . It was almost impossible to mention it in germany. Leighann good morning. They have come out and said this anald trump give himself will be at the end of the road. We will see if we want to make arrest in europe progress in deadline of mid november to make a call, but the white house has europe generally. Reportedly been talking with maybe at the end of the year, carmakers in the region about this is going to break the boosting the u. S. Investment and workforce. Backlog. Tom thank you. Broughtrs in hong kong too short with you today but i am sure it will be most the citys financial district to interesting. A standstill, following clashes with police. Ed hyman, looking at the tensions have been up since a markets. Demonstrator but shot yesterday by police. Windows shot to those of you who do not understand cj lawrence 101. Carrie lam says this months this is how you do it. Election should still go ahead. This is like the bible at David Rubensteins library of we still hope we can hold the congress. This is ed hyman on existing election or try our best to do so. House prices. Because it is an important i do not see any black marks. Election with the right of 4 million voters to respect and somewhere in formations, the safeguard. There is an issue of safety and granularity of what ed hyman order. Tohave to work hard to does in his highly coveted research notes. Ed first chart is interesting. Satisfy these two requirements. It is human. With september existing the german chancellors house price, 273,000, which approval suggest a willingness people can relate to. Bank years of debate one decade ago it was 160,000. Terrific run over a decade. I have seen that in city after have failed to produce results. City. Wasehold formation i rans and radium enrichment 1. 3 Million People are now moving out of their parents houses. Tom every friday, the gloom crew comes out of the woodwork writing on the blogs, fearing the walls of worry. Steve wozniak said the company is not guilty of antibias. Push against that as the arch says the credit card bias is market optimist. Ed i am not always optimistic. Alleged to have just ruminated based on gender. Tom agreed. Ed i am now. Told i dont is to be basic tenants believe looking into the a contrarian. Algorithm is a solution to it i dont believe that change in the francine was asking earlier algorithm is a solution. Somehow it is being able to get about that. Individual attention in cases people are generally cautious that the algorithm misses. About what is going to happen. Country,y, in this inflation is low, Central Banks pushing back. There are many negatives, which global news 24 hours a day, on air and at tictoc on twitter, is the reason banks are pushing powered by more than 2700 journalists and analysts in more back. Than 120 countries, i am mini recession. Leighann gerrans. Francine . The third general election in less than five years or Boris Johnson will today seek to capitalize on brexit party under nigel for rods announcement we might be in a bottoming process. That he will not contest the u. S. In general has weathered seat. This well. Francine did you think economists are too pessimistic it needs to lend in the about what we are going through . I guess i would say, i do majority. Then interview with conservative party is fiscally not think they are optimistic enough about what is unfolding. Responsible. We have been in this for a decade. Im on the verge of being bored. I set up a Spending Review, which increased spending by 30. 4 billion pounds a year. I think that was needed. The same, over and over and i think it was a welcome input over. Into the strength of the economy this is the third mini we have as well. Had in this decade. Again, you need to keep spending 16 and now this one. Under control. More investment in roads, and we keep on plugging. Rail, in fiberoptic connections. The consensus is this expansion certainly you give a real big boost to the economy. Will lapse for another three in due course. Years. Will be almost 15 what we also want to see is spending being kept at a control . We can do that without fiscal years old. We will be challenging australia rules it under labor they will at that point. Be out of control. Francine until we normalize policy, Central Banks start geico the worlds biggest bond normalizing interestrate, do we funds are avoiding u. K. Guilt because they said whoever wins really know what kind of economy the election, there will be more we are left with . Ed we dont. Spending and more issuance peered why cant you clarify that at this point . Fiscal rules will be next 3, 4, 5 years that should be that she would win the one thing in particular. Election is to give that do we normalize rates . Confidence to the businesses in are they still negative in three years in europe . International investors peered i dont take for granted if they are, it will still feel International Investment as well. Like glass halfempty or we need to show clearly with the unstable or certainly not normal. Economic policies are for the government. That will be a critical factor Going Forward to see if rates that they have come up a little. They are still negative in europe. Tom here is the alltime ed Francine James athey is still hyman page. Here. M2 is on there. First, have we gotten rid of a small probability that i had a got to have it, linear off the no deal brexit. Crisis. Retail money funds up as well. Dont know if we can trust the polls with what happened on is the wall of money a good or bad thing . December 12. James it is difficult ed good thing. With the best of times. This particular issue, that that, thed thing in really does confuse the top chart, the amount of money pollsters models come and you can understand why that is the people have in retail money case. Funds, which is easy to haveas you say, what we understand. It was 600 billion. Agreed to so far, what was put forward to parliament and it is up 25 in the past 12 essentially angry agreed in a months to 1 trillion. Soft way, we can discuss the people are sitting on 1 trillion they are scared to put future relationship. In bonds, stocks, real estate. Cliff edge the that is 1 billion. Of a no deal brexit. The broad money is 15 trillion, it is not terminally off the table. Up 7 , the fastest in a long of course reelection is the most time. Important factor right now. There is a lot of money out there. You see in deals all the time, if francine if the markets are not like the walgreens deal yesterday. Francine plenty more on that. Of the table, how are the markets pricing it . Thank you, ed hyman of ever james pretty well. It is not completely off the core. Lets look at the movers. Table. The tory party essentially has rallied around the Withdrawal Agreement bill that was put forward. Theres no reason to believe for boeing, interesting. The moment that would not pass, and there is really no reason to a lot of questions about when think we could not come to a the 737 max 8 will fly again. Mutually supple agreement within is linda chemical 12 months. Francine company gaining 2. 3 . Francine do you trust the polls . Do you have to figure out as a money manager whats going on . James theres been so many polls. I find it difficult to believe that the tories are not in front. The pro brexit traditionally workingclass, traditionally labor supporting constituencies, of which there are many. You need to understand or try to understand the order of preference of some of those voters. Do they preferred the brexit party over the tories . Refer the labour party over the tories. I do not think that analysis will yield particularly good results . I still believe results. I still believe the brexit party to some degree has shown is not willing or capable to be in government. A vote for the brexit party is a protest and a bit of a waste. I think that will encourage some fission people to vote tory encourage sufficient people to vote tory. Francine when you look at the other things in the manifesto apart from brexit, does that move pound depending on who gets elected . What are the chances of a majority led by labour . James very low indeed. A labour majority is very low indeed. Some coalition, there is a greater chance of that. That would move the market in quite a dramatic fashion. The Spending Plans we have seen so far from the labour side, they do appear to be some telephone numbers. That will be concerning for markets. It does look like both parties are going to loosen the purse strings. That is a desirable at this stage if you look at the problems the u. K. Economy is facing. Some of them do fall on the public sector. Francine james athey from aberdeen standard investment stays with us. Manus cranny spoke to the total chief executive. He said all price volatility and weak demand growth for crude are likely to weigh on Global Markets next year. Volatility. I think the market, you have a risk. L the demand is not good because of the economic macroeconomic trends, the trade war. We see an impact on demand. People are worried globally, even if Financial Markets are pushed up by the low Interest Rates or negative money communal. Did trade wars really hit your demand this year . Did it affect your numbers . The increase of demand, month plus month, it was 1. 4 1. 4 million from the beginning of the. Under 1e will end million. Less Economic Growth, there is a direct link. Beus where could the floor tom good morning. Bloomberg surveillance, tom for these prices . I dont know. Side, we know that the keene and Francine Lacqua in london and new york. News. Don, our first word opec policy is quite clear. Reporter good morning. I think opec countries want to top stores. Price about 60 per barrel. Kong on the brink of a they have been very disappointed. Very disciplined. Breakdown. Teargas was fired in the financial district battling with as my feeling is that opec will react with a price under 60 per protesters. Todays demonstrations led barrel. Francine that was the total 260 arrests, leaving 100 people chief executive speaking to manus cranny. Injured. Up next, streaming showdown. President trump and president erdogan meeting tomorrow. Disney is now live. Systems willissile bob iger has staked his legacy on it but how will it compare to top the agenda. Netflix . Congress has been pushing the that is coming up next. Administration to impose sanctions on turkey for buying this is bloomberg. Russian military hardware. Lawmakers say it poses a risk to the f 35 fighter jet. Granted asylum in mexico. The Mexican Foreign minister life was at stake. The military stepped into push him aside. Jimmy carter has been hospitalized in atlanta. He will undergo surgery to relieve pressure on his brain. Mr. Carter has fallen three times this year. He is 95. Global news 24 hours a day on air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Tom thank you. Once,cirilli said to me over a beverage of my choice, you need to lawyer up. Lets talk about it. Withashington post leads dissent in the white house over how the president should move forward. Is the president lawyered up . Kevin he has. I will be frank. The president nor his supporters feel he is in great danger of being removed from office. Hearings begin tomorrow with top diplomats, top ambassadors set to testify on wednesday and friday of this week. Nothing has changed in the senate. Wall street has not been reacting. They are watching the u. S. China trade war. Tom voices supporting the president as well but the normal thing is the guy has seven lawyers, maybe one visible, out there driving his conversation. In my correct that that is not occurring this time around . What has been driving this is media coverage. Tomorrow, there is a public hearing. It is a media show. The president likes that environment in terms of dominating coverage. Quite frankly, it will be 50 50 split. Republicans will have just as much time as democrats at these francine this is bloomberg hearings to take their swings at surveillance. People like joe biden and to im Francine Lacqua here in defend the president. London. Hearine what will we the streaming showdown is heating up and disney launches today. The price tag, 6. 99 per month. Today . Yesterday, i was talking that undercuts pick rivals like with sources. They noted the ability the big rivals like amazon and netflix. President has to drive coverage. It is more expensive than hulu and apple tv plus. If you look at his public tweets the Service Features at least 25 in the past 72 hours, he has new tv shows and 10 new films taken a more teleprompter tone. Along with a huge archive. That might be more measured, when it comes to new content, netflix, amazon, apple tv, and akin to rhetorical approach at hulu all have bigger estimated the yuan the united nations. Budgets next year. Bob iger is not letting that if he were to go off script and worry him. Use it as an opportunity to he says, too late to worry criticize jay powell, that is now. Something wall street would james athey is still with us. React to. Ago,the president , moments does disney actually have what i will be releasing the it takes to succeed with this string service . Transcript of the phone call i think it does streaming with ukrainian president before weeks end. Service . I think it does. Within the testimony congress has heard, that the house has other platforms are spending billions of dollars on content. Heard, does the veracity of the disney has a huge library of its transcript under question . Own content. Kevin no question, that is the billi 885 billion on 21st century fox. Case, in terms of whether or not there was quick or quote quid Something Like 7. 5 thousand pro quo. Look for nancy pelosi and other Television Shows including the democrats to convince the American People this is something that warrants impeachment. Tom we will look for kevin simpsons. Everybody is playing catch up cirilli today. The content on the platform. Francine who has the most to lose . Is it netflix . I think they do. Look for coverage of the president speech near the noon perhaps the pace of growth going hour. Isi, to with ever core forward. Netflix already has 150 million or so customers. Your point of fiscal stimulus, i guess the question is whether my chart of the year last year. Something like disney, and not trying to get out front of just disney , but that whatever the debate is the year ahead. Combination with espn plus and the twin deficits. Hulu can slow their growth. Stephen roach of morgan stanley, now at yale, making good effect i think probably there is enough of this. Between deficit as a first and room for both of them to continue to grow. Second derivative, not pretty. Thats what most analysts expect. Francine do you own any of Interest Rates are low. These . This industry . Is there concern if we get rate i am not asking if you watch it. No. Normalization, this chart actually matters . Ed at the moment it doesnt feel like it does. Seems to me this is the disruptor becoming the disruptive. The industry behemoth fighting back. The back catalog is unbelievable. As i was mentioning earlier, it would be good if rates were higher. Still the most watched show on there would be a cost. Netflix is friends. That levels on the corporate side, the Government Debt, would in spite of the fact that new be a problem at that point. Content is highly desirable, low,e moment, rates are so there is a huge demand for oldschool content and disney still below 2 , still negative has that in abundance. In germany. It occurs to me that disneys 6. 99 will be a real challenge. Lets sit back and wait for that to happen. Francine you have seen new content flop as well. Yearst guess is rates next if you are a big company and you are spending millions, in are 2. 25, which is not enough to certain cases hundreds of ring the bell. Millions to make a new show and market it, how do you make sure francine how confident and it is not a flop . You just need eyeballs to watch her stuff at the end of the day. Strong is the u. S. Consumer . If Interest Rates go up, would apple has had mixed reviews with some of its new shows on you not worry about the the platform. Consumer, that allimportant they have got decades of shows. Nce in making hit American Consumer . Ed the general lay of the land. Employment is the driving force. I think perhaps one of the things that has been a pleasant surprise for disney over the last 12 months or so is that i watch it like a hawk and worry they know what works in the cinema come on tv sinema, on about it. , on tv. Nema this is where people could pull back. Francine is it too much the Small Business business measure came out this morning. It was up a little. Content . At some point, will they have to that gives employment and consolidate . I think we will see more consumer some firepower. Before we get less. There is still a whole bunch of rates side, side new streaming platforms coming online, certainly in the u. S. Next year. I think there will be a couple to the extent they go up, it of years of people getting lots will be because the economy is of choice and ultimately there getting better. Will be some kind of shakeup. The consumer is there. Francine do you like the media nearterm basis, one of the industry in general or is it difficult to predict . The interesting thing about higher correlations there is, is this is that some of these between holiday sales in the Business Models have not been stock Market Performance in the tested through cyclicality. Fourth quarter. My viewpoint is that we have seen the best of it. We are likely to be in steady right now we are laying decline or more rapid decline. Some of these Business Models, groundwork for a decent holiday season. We have the number one retail we dont quite know how they behave when the cycle turns. Analyst in our shop, greg malik, if unemployment is at 3. 5 he just raised his forecast for today, what do netflix retail sales for holiday and subscribers look like at 7 or next year. 8 on employment . Francine we are focusing a lot we are looking a little bit more on the u. S. Up than down on that topic. Francine that is despite the is the market in europe significantly different or is it trade war . Just smaller . I. Choice right now only if we have a phase i deal . Ed it is in spite of the trade i think we have less choice war and the phase deal. Right now. There is a range of services houseivers, increase in coming. Disney will launch in the u. K. At the end of march next year. Prices and stock prices, lifting Apple Tv Services now available. The consumer net worth. Consumer net worth, one year we are catching up quickly. Ago, unchanged year on year, i think there is a big challenge zero. Now it is up 10 year on year. To the traditional broadcasts. Lists gdpehandedly eyeballs are increasingly switching away from those traditional tv shows towards growth by a percentage point. 4 , nominal gdp over these streaming platforms. That will be a big threat for next year and beyond. Measured optimism, 4. 2 . Francine thank you both. Is that the new normal or can we james athey from aberdeen actually get up to something we standard investment stays with us. We will speak to ann cairns, have a collective memory of . Ed im going for slow and steady. Vicechairman of mastercard coming up shortly after 10 30 as you are pointing out, tom, a. M. U. K. Time. End, itrectly, at the she is here at bloomberg for an investment summit. We will talk about bias in is nominal gdp. Algorithms. This is bloomberg. Sales, incomes, spending. That is always in nominal terms. 4 is right at the dmz. We looked at the money supply. Up 7 . There is room for money growth to pick up nominal gdp growth. Tom Charles Evans of chicago suggests we need to boost inflation. We need to get to 2. 5 level and sustain. Do you agree with president evans that we can overshoot inflation and with confidence not repeat the 1960s . Ed i do not think we go to 2. 5 . I have been an inflation junkie. Tracking closely. Every day. No particular avail. Last week, the fed said that is what they are watching the closest. I look at inflation data everywhere. Tom you do. Ed everywhere. You will be thrilled to know the cti in dubai declined. Tom [laughter] ed decline 3 year on year. Tom oh. I didnt know that. Ed everywhere i look, whether it is europe china, cti export is up a percent and a half. Tom he thinks this is commercial free. It is not public division. Looking at dubai disinflation. Bloomberg surveillance, breaks loose coverage of the president of the United States tweeting on impeachment and trade. This is bloomberg. Francine economics, finance, politics, this is bloomberg surveillance. Im Francine Lacqua here in london. Lets talk about the big item to arch a little bit later today. That is President Trumpss speech tonight at the new york Economic Club as well as listening closely about trade talks with china. It is no secret that President Trump is highly critical of the central bank and its policies. Still with us is james athey from aberdeen standard investment. James, what do you want to hear from President Trump . Is a trade . Is it Something Else is it trade . Is it Something Else . James what i want to hear is not necessarily good for the Global Markets are Global Economy because of how i am positioned. What do we expect to hear . These press conferences are actually quite entertaining. Hes bombastic, unpredictable. There is some entertainment value to them. Quite often light on content, however. Does he mention anything about auto tariffs or tariffs in general on the eu . Does he mention anything on progress with respect to china and specifically rollback of and between now francine is it very difficult francine this is bloomberg survillance. To trade on the back of it . Tom and francine from london and youre not quite sure what his new york. Policy and what is his own. Ersonal feeling streaming showdown heating up. Disney launching today. Tom great. If he says something about month,e six dollars a china, do you sell on it, sit on it . James to steal the words of a republican congressman, you have undercutting netflix and amazon. To play the ball and not the man. You have to understand the riskiest product political situation, the policies of the party, etc. Launch. That is a bit more difficult on trade because obviously there is a lot of executive power. President trump do things this here, bob iger bought most himself. I still think as an investor, not a traitor, i am an investor of 21st century fox. R, i am an investor. Disney still on the back foot. Disney out with i dont believe that President Trump is in a position now where he can win politically by Technological Innovations today. Single best chart. Folding, and therefore, i see it the times we live in. Very unlikely that tariffs get isi,man of evercore completely removed. Youre talking about the degrees of freedom around that where he decades of experience. Can sell it has a win. Single best chart is painful. Francine how strong is the u. S. Economy . James stronger than most if not a bond. All. The price of the bond off a there are still huge imbalances and vulnerabilities which have built up. Cliff, down to a new low, 13. 6 the cyclical basis of unemployment at three. 5 and ,ield, a train wreck for all consumption strong in a consumer economy is not a bad place to the lord building just down the be. The economy looks decent. When you look at the corporate block. How is this different from debt buildup, the fiscal february, 2001 . There was a frenzy. Deficit, slumping confidence across a number of industries. Unicorns a and Francine James manufacturing is entrepreneurial frenzy. How are they different . Ed i dont think the animal james exactly. Spirits today are anything like manufacturing is a secondary sector. They were. Tom strongly agree. The only reason 2016 had a v 30 on the overall shape is because it china through the book at in terms of fiscal stimulus. Stock market as opposed to 18 to me, the trajectories now. There are bubbles. Different. Nothing like a huge bubble. Francine they are not doing it because they dont need to know . James they dont want to. I dont think it is a policy i was in tokyo last week. Mistake. They have for too long prioritized shortterm growth. I was reminded of the super bubble then. I think the numbers to try to we talked about inflation. Each the price war, streaming, arbitrary targets i think they disney, netflix, incredible. Are now looking into the distant future, as chinas able to do, those businesses are driving and seeing that debt is a huge issue. Francine james athey, senior local economies. Tom does Silicon Valley play by investment manager aberdeen standard investment. Tom keene joins me out of new a different rulebook . York. We will be speaking to ann 19992001. Scence of cairns, the vice chair of mastercard. We will also hear about bias to ipo offeringtrived algorithms. European stocks edging higher. A lot of the asian shares rose issue that we have today is it contrived by arrogance or is amid the trade war headlines. We are seeing simmering tensions in hong kong. It actually the animal spirits of the street . Treasuries fluctuating. Ed for the latter. This is bloomberg. I remember the crazy things going on in the last tech whether youre out here on lte. Bubble. There are crazy things going on. We work is one of the examples. They got way off the rails. Doesnt seem to me to be as crazy as it was then in the companies now are much more Real Companies with real revenue. Maybe not real earnings. They are Bigger Companies than they were, more substantial than they were in the last boom. Francine when it comes to streaming and media, we see more consolidation. We saw part of it. Will we see more now . If we are, what does it mean for investors in the industry . Ed that is not my wheelhouse. For howhave a feeling much consolidation there will be. Where, likemple of in many industries, there is intense competition keeping prices down. Oddly enough, it is also in a boom state. People are spending billions and billions of dollars on content. You see it show up in different local communities like atlanta. They have a lot of moviemaking going with netflix. That is driving the local economy. I dont know how much they will have to consolidate in the next few years. Tom another chart with ed hyman out of yale university, helping to codify the definitive. Well backogged spxs, over 110 years on the markets. You have to climb on and stay on board. Here,carter so ill at 95 there is in the middle, the carter malaise, even though that is not about james carter. Or here on a wifi hotspot. It was about a different time. We have risk of malaise . Xfinity mobile has more coverage to keep you connected to what matters most. The chart tells me we dont. Nd i dont have a thats because its the only Wireless Network that automatically connects you to millions of secure wifi hotspots and the best lte everywhere else. Intrinsically optimistic way of going about things. In a now, i think we are switch now and see how you could save up to 400 a year. And get 50 off when you buy any new lg phone. Sustainable upturn. Xfinity mobile. Click, call or visit a store today. Years, peoplefew will go to the view that there are no more recessions. The market will go up. Lets go to australia. They have not had recession in 28 years. The market, 18 times could go higher. Tech companies are driving it. Etc. General, we are in a situation where people think the glass is halfempty. It is looking like half full to me. Tom the banks of new york, the merchant banks, the two big to fail banks, are they too big or should we let them go internationally . Wheelhouse. Y i would guess they are too big. Kongs financial i do not see any political appetite to attack them. Jamie dimon have a great district is paralyzed for second interview sunday evening. Day, protesters blocked subway wellcapitalized lines and police warn the cities on the brink of a breakdown. And participating in the President Trump might push expansion ok. Francine you are too modest, back his decision for tariffs. Ed. Everything is in your wheelhouse. Nigelpitalizing on this is what pound is doing. A lot of focus on Boris Johnson farajs decision not to send the and that the Prime Minister is seeking to capitalize on the candidates 300 seats. This is bloomberg nigel faraj announcement surveillance. Yesterday. London, tomqua in 1. 2833. Keene in new york. We are protesters continuing to gather in central hong kong. This is bloomberg. We will have a full update shortly. That permeates through a little bit of the risk on moves we are seeing in the market. We dont have trade headlines, but the focus is on tensions in hong kong. Tom i had to take the car down fifth avenue, and there was the preparation for the president to speak at the Economic Club of the u. S. , front and center will be comments on trade the president will make in new york. Francine we will have plenty more on trade and whether President Trump decides to maybe forgo european tariffs on, carmakers. Tom yesterday was extremely difficult. Today may be more so. I see that the ew numbers. My nonhong kong, jodi snyder kong right now on hong jodi snyder has decades of experience. What is today versus yesterday of these protests . Think it is we are seeing another day of disruption and really chaos in the central part of hong kong in the financial district. One day was a surprise and shocking. Two days makes you wonder this is going to become part of the new normal we started experiencing in hong kong. For five months we have had protests largely not during the week and not in the central financial district. They have been all over the city. In some ways people have gotten used to that. Now it is downtown in the central part of the city in the Financial Hub. That has been the escalation in the past two days. Chinese tear gas at the university of hong kong versus teargas outside of the Louis Vuitton store in the Central District. Is there a distinction to the authorities . The authorities are basically saying that things have escalated to a point where it is difficult to control things. Part of that is the fact you are seeing these spring up all over. We saw it on the Chinese University campus, the Hong Kong University campus, even though classes were canceled. We have seen it in various places around the city. We have seen a lot of disruption at transit hubs. We have seen they are being suspended and canceled subway lines during the week has been unusual. The Central Business district, the Financial Hub is something different. That is something we havent seen much of before. That is why we are hearing about that distinction. Francine we heard from carrie lam. Did anything she said did anything that she said appease the protesters . Francine Hong Kong Police firing tear gas in the financial district. Second straight day after demonstrators blocked roads, she had a very short press briefing, less than half an hour where basically she condemned disrupting the commute and the violence, as she has continued to do. She thanked some residents for helping to clean up. Clashing with police. Live pictures. She has asked people to be calm. It is chaotic following the she has told everyone to be flareup in violence after hong safe. She did the one thing of note today that she hoped the november 24 District Council kong suffered the first mentality linked to protests, elections would go forward. That started in june. There has been a lot of discussion on social media as to ed hyman, evercore isi chairman. Whether that would happen. Joshua wong has been he knows china and the companies disqualified from running in the involved. Doesng at those pictures, District Council elections, which led to some of the unrest this give you a sense of how over the past two weekends. She did say she wanted this to this ends . Is it impossible to call . Go forward. She didnt give any real policy the u. S. And china in a trade war is hong kong a prescriptions. It was more of the same of the press conference she gave last distraction for china or is it a evening. Bloombergthank you, bigger problem than the trade war . Ed it is a distraction for Senior International editor china. It is ugly. Joining us from hong kong. Lets get to the bloomberg first i cannot tell how it will work out. Word news here in london. Good morning. Xi,s not a major factor for lets start with trade. President trump is expected to but it is a distraction. Delay imposing tariffs on up 150 . Of pork is european cars. The president said he would decide on the tariffs by the then you have trade issues. Middle of this month. The eu threatened to retaliate china has many negatives. With duties on 39 million of we survey companies that do business in china. They say business is continuing american goods. Bloomberg has learned the to get weaker. Efforts by german automakers to forad, this week, the sales highlight new investments in the u. S. Have helped negotiations. A missile strike alibaba. They were up 26 to something billion. Killed him. He was described as the master it is a reminder. Mind of hundreds of Huge Consumer sector in china. Attacks. Palestinians fired rockets at an slower,omy, although israeli community. Had a pretty rapid pace. Francine when you look at a report says equity trading they fear the worst. Alibaba and the consumption in china, if you are a western down 50 from a year ago. Company, do you need access to china . Do you need to be present in equity underwriters could see a 10 drop. Fixed income traders may do china to make sure you continue growing in the next 20 years . Slightly better. Bonuses may the client just 5 . Can you do without china . Ed it is mixed. Global news, 24 hours a day onair and on tic toc on doing business in china today twitter, powered by more than 2,700 journalists and analysts in more than 120 countries. This is bloomberg. And tomorrow is not the way it was yesterday. It used to be very open, tom thank you. Encouraging u. S. Companies to come in. Equities, bonds, currencies, theyre developing their commodities. Own ability to develop products aeing with the news giving doubt lift, futures up three, made in china, so it is more difficult for u. S. And foreign curve steepening overall. Oil, the vix was a 13 handle. Companies to do business. Me,bond market excuse it is not as it was. For Companies Like disney, it is the vix is 12. 72 showing a bit still a huge market for them. Of a rally yesterday. One day,a sales show, treasuries are up 26 , already growing like crazy for a decade, it is a huge actually fluctuating a little bit after this long weekend. Market for people. Francine how much bigger can i am looking at the european alibaba become . Ed i dont know. Stocks edging higher. There arent that many about 10 times bigger than i thought they would be three headlines involving the trade years ago. War. Which i spent a the focus will be on what President Trump says this afternoon. Fair amount of time looking at i am looking at stocks, modest yesterday, i could not believe they were up that much. Gains in shanghai, outperforming when the final tallies were in, in seoul. They were up 27 . Hyman, thank you so delayent trump may much for joining us today, the decision on whether to slap ever core isi chair. Tariffs on european auto parts. Were are looking at pictures of last spring the president said hong kong. He would decide on the tariffs protesters gathering in the by the end of this month. Central district. In return the eu threatened to intense clashes yesterday retaliate on 30 9 billion of leading to 260 arrests, leaving u. S. Goods. 100 people injured, including President Trump is expected to touch on trade relations in an two critically. Address today or the Economic Club of new york. One man was shot by officer joining us now is the hsbc chief yesterday during the morning commute, another was set on fire by protesters. Economist who stays with us for the hour. We have been hearing from the it is great to have you on the chief executive saying program. When you look at possible auto protesters would not achieve their goals through violence. Tariffs on europe, how difficult is it to measure where we stand live pictures out of hong kong given the one step forward, two through cable news, a lot of steps backward, one step disruption, smoke coming out forward . It is difficult because we with fire in the middle of the financial district. Are operating in a different plenty more on hong kong and globalization what that means for trade negotiations. Coming up, President Trump delivers a speech on trade and trends. Have not met an investor in the last month that thinks these Economic Policy at the Economic Club of new york at noon in new auto tariffs is going to be imposed. A lot of the improving mood in york, 5 00 p. M. And london. This is bloomberg. The market is helped by the Economic Data assuming, on the nearterm, including the auto tariffs, which we should find out one way or another this week , should not pose an issue. The Bigger Picture will be with us in the coming year. Francine a little bit on the tariff, you look at survey expectations, expectations are as we wereead of 13 expecting. 24current situation is rather than 22. At the moment the 2019 story has been about trade, the 2018 particularly the german industrial recession that began cars. 8, was all about investment in capital goods, germany and the german economy, half its exports industry. Everything that has been deteriorating in the Global Economy germany has been heavily exposed to. The survey is a financial analysts. If you look at the scaling back autotations on atup tariffs, it doesnt surprise me. Henry can give us a wonderful perspective. Receipts of the United States of america. Within a well constructed trend, a five standard deviation move is meaningful. The key question, and this goes to ed heineman with a more constructive outlook, is this old news or indicate a further slowdown and disruption . Janet i didnt quite catch what the charts are. Tom customs receipts of the United States incoming and the explosion of receipts due to tariffs we have seen. Does it indicate a story in the pastor to extrapolate it forward . In the past or do we extrapolate it forward . Janet china has been reducing some of its tariffs elsewhere. We will have to find out how much of these tariffs are rolled back, or if any are. It seems we will get a phase one between the u. S. And china, some degree of rollback will have to be part of that deal. Is that the end of tariffs . I expect some will remain in place and we will see ongoing trade tensions, perhaps in a growing number of areas. A lot is looking through the rearview mirror, and inevitably we will have seen front loading into the u. S. Ahead of tariffs in the middle of december. In the same way the u. K. Data in the first and Third Quarter to some degree ahead of anticipated brexit deadlines. Companies will frontload ahead of these deadlines regarding the trade tariffs. Withmuch to talk about janet henry. The news flow is extraordinary. Well. S up, german data as alix hong kong on the brink of later today the president of the United States, a speech to the total breakdown. As police and gas Economic Club of new york. Why in anticipation of that to drive forward trade war protesters clash. Discussions widespread President Trump, the optimist or the skeptic . Anticipation of that to drive forward trade war discussions. Which president shows up at the this is bloomberg. Economic club of new york . To equities on the road nowhere. Investors look for a catalyst to the up or down side as money pours into money market funds. Welcome to bloomberg daybreak on this tuesday, november 12. P futures right at 3088 you still have endoftheyear performance that you have to catch up on. That dynamic potentially playing out across asset classes. It is time for global exchange, where we bring you todays market moving news from all around the world, from hong kong to berlin to new york and washington. Our bloomberg voices are on the ground with this is bloomberg surveillance. Lets get the Bloomberg Business flash. Nissan is struggling to get back therack almost a year after arrest of carlos ghosn. The automaker slashed its Sales Forecast for the current fiscal year and withdrew its dividend outlook. The company is undecided on a payout. Is looking forer strategic partners. They have approached carmakers indiasg bmw and china, largest conglomerate wants to share the burden of investing in electric vehicles. Talks are still at an early stage. That is the Bloomberg Business flash. Tom janet henry of hsbc is with us. Lets open the discussion on the uncertainty. This is this green that i use on the fed show every fed meeting. Go on bloomberg go. 2, three, very britishlike over here. What does the dissent signal if the united dissent signal of the United States . Janet every central bank has a divergence of opinion in the fed has been no exception. You have had some not wanting to cut rates at all, some wanting to cut rates more aggressively. In the last meeting you had no one wanting to cut rates more aggressively, but still had not wanting to cut rates at all. Broadly there seems to be a general consensus on the butrity of the somc, proudly they are all on board the idea of some sort of pause, and they hope period. Up ne consumer hold will the u. S. Consumer hold up . If they dont hold up, where do you see it first . Janet it is global, are we going to see a stabilization of industry because of increasing confidence and an industry rebuild over the next couple of quarters . The u. S. Is less industrially exposed. Employers have held up well. The rest of the economy employment growth is firm. For me, in 2020, the big story will be about profits. Expectations. Andline growth is slowing expectations are rising. The labor market could be a casualty. It is a slightly slower Consumer Spending out of the 202020 19, but it holds up. Francine that is under the assumption of the trade one deal phase one deal with china . Janet a phase one deal with china helps Financial Markets and Companies Remain confident start scheduling too quickly. When unemployment is low companies dont rush into shedding labor because it has been so difficult to hire people in the first place. A lack of excavation on the trade front is critical to that backdrop. Should we get and escalation. Tom what is your call and gdp forward for the United States of america . I both 2 , but how far . Is average. It is fractionally below. With unemployment only at 3. 5 , that is a good number. Tom there are a lot of people that really disagree. Give us the distinction of your 1. 7 versus ed heineman 2. 5, or others that are twoish. How do you get to 1. 7 from a consensus twoish . Janet we dont follow the consensus. Tom ill say. Janet when you have unemployment at 3. 5 , that is the low full employment. The people that tend to be employed at that level, while it is important, the labor market will get higher wage gains have not benefited from the recovery so far. They often arent the most productive. It is easy to get the labor input to gdp growth and we dont see investment reviving quickly. The u. S. Has said over the countries in the last decade but a lot has been in energy and tech. The rest of the economy has been weak on the investment front. They read is a bit on investment and a bit on consumption, but i havent seen them break that. Tom a different view in the next hour. Edward heineman will join us, and every core i an every isi. Evercore this is bloomberg. Francine this is bloomberg surveillance. London andncine from new york. Chancellor merkel has signaled support for her finance ministrys plan for European Banking Union. The scheme was a key pillar to overcome the sovereign debt crisis but years of debate has failed to produce results. Janet, what are the chances we get a working Banking Union in our lifetime, and how important is it to show the rest of the world that europe means business . Janet i think its critical. Sinceght it was critical before 2012 when they first started to make significant progress on the various areas of integration. Very little on the fiscal front Banking Union breaking the link between the sovereigns and the is absolutely an important change to the institutional architecture of europe. We have made little progress in seven years. There is still a long way to go, but should the euro zone go into a severe downturn, that kind of Banking Union will be a resolution mechanism that is critical to addressing it. Francine will we get it . Does that mean germany is softening, has a softer position on various things . Fiscal spending and banking . Concessionimportant we see from the german finance minister is the suggestion that germany is open to an insurance deposit. Previously, germany had been dragging its feet a little bit. Andthis is only one area, as much as the economy is keen to hear that germany is open to deposit insurance, there are related issues. Particularly is banks can buy large amount of Government Debt without Additional Capital requirements. I think we will get it, i dont think we will get it quickly. It is good they are making progress on it again. Francine what will christine life be made easier by . Thet any improvement in infrastructure. Anything in place to prevent a rerun of what we had during the financial crisis, which a Banking Union could help that with the resolution mechanism, but also something on the fiscal front. She made it clear before she took office that central banking is not the only game in town. That fiscal policy and fiscal stimulus, appropriate fiscal policy and measures, can help the central bank meet its inflation targets. The fiscal for her will be almost as important. The fiscal integration. I think she is realistic in her outlook that that is going to be even slower and smaller before it comes on stream. Tom i want to mention boeing. Yesterday boeing with a big move. This is a nuanced story. Boeing is simply about maybe getting deliveries underway in december, but shifting into january to study a pilot materials as well. Boeing having a real effect on the dow yesterday. From london, new york, and worldwide with reports from hong kong, this is bloomberg. Tom good morning. Bloomberg surveillance. From london and new york. Our first word news in london. Good morning, tom. Lets start with one of our top stories. Police in hong kong are warning the city is on the brink of a total breakdown. For the second day they fired tear gas in the financial district and battled with protesters. Mondays demonstrations led to 260 arrests and left 100 people injured. President trump and president erdogan our meeting tomorrow. Turkeys purchase of an advanced Russian Missile system will top the agenda according to an erdogan advisor. Congress has been pushing the administration to impose sanctions on turkey for buying Russian Military hardware that lawmakers say poses a risk to the f35 fighter jet. Italys president has been granted asylum in mexico. The Mexican Foreign minister says his life was at stake. Morales step down after election irregularities that led to weeks of violence. The bolivian military pushed him aside. Jimmy carter has been hospitalized in atlanta. He will undergo surgery to relieve pressure on his brain. Mr. Carter has fallen at least three times this year. He is 95. Global news, 24 hours a day onair and on tic toc on twitter, powered by more than 2,700 journalists and analysts in more than 120 countries. This is bloomberg. Francine thank you so much. Chancellorhe u. K. Spoke with bloombergs guy johnson the u. K. Gdp and some of the spending, whether that was hurtful for the budget. Economic times have already added to the growth figures a few months ago. I sent out my Spending Review which increased spending by 30. 4 billion pounds a year. I think it was a welcome input into the strength of the economy and needed. You need to keep spending under control. The plans for an infrastructure revolution, more investment in roads and fiber optics connections, will give a big boost to the economy in due course. What we also want to see is is the spending being kept under control . We can do that with our fiscal rules. With labor they would be out of control. Some of the worlds biggest bond funds are avoiding u. K. Worrybecause they whoever wins the election there will be more spending and issuance. Why can you clarify that . Our fiscal rules will be should we win the election is precisely to give that confidence to businesses and international investors. I dont take for granted International Investment. I am a former business person know you need to show the economic policies of the government and work hard to attract and keep that investment in the u. K. U. K. Ine that was the chancellor speaking with guy johnson. It is exactly one month until the u. K. Vote in its third general election in less than five years. Toest johnson will seek capitalize on nigel farajs announcement he will not contest won by the conservatives in 2017. Johnsons tories are still left fighting for seats they need to form a majority. At the polls,ook do you trust them . We have any idea because of the Brexit Party Tory deal we found out yesterday, whether that means a bigger win for Boris Johnson . Polls are unreliable and can change as theresa may found out. On the impact of nigel farajs decision it helps Boris Johnson get to the 317 he had before. He was fighting marginals where the brexit party could have deprived him of a brexit party. He will still contest the tory party seats. Johnson will try to get a bigger majority than before. Psychologically speaking, the polls put out, faraj running doesnt make a huge difference. Politically it does make a huge difference because the message has changed. Faraj has compromise saying if you want brexit you have to vote for the tories. That is harder to say if you want to vote for brexit vote for another party instead. Francine what is he promised in return . Nothing. The key video was sunday night when he promised the super candidate plus the freetrade deal. We dont know if the Prime Minister will stick to that plan. Faraj has done all the running and the pact is unilateral on his side. Johnson has given very little. You arent seeing the tories pulling candidates. Johnson has not walked back from his deal and has not said a clean deal, clean break brexit. Tom i want to bring up five polls. It is too early in the morning for me to do the math. 39 plus nine and 27 plus 16. At the bottom is four plus four equals eight. Is there to point where s ps or greens really makes a difference . S p and dup only run in scotland and Northern Ireland respectively. The greens are 4 of the vote. Withre not likely to see that kind of level greens getting very many seats. Where it can get interesting is if the greens or the brexit party poll a small amount in a marginal constituency. That is where you see the effect on the tories and the labour party when they are deprived of a seat they otherwise would have won. Tom janet henry with us, she doesnt want to talk the politics of this. Headlines over the weekend into monday of the Economic Growth recession meter and how it folds into politics, how recessiony is the recession and worries for the Prime Minister in the United Kingdom . Government wants to preside over a recession. The u. K. Economy avoided one so quarter. The third the economy is still very sluggish, any growth just over 1 is below half of what the bank of england use to argue was the potential growth rate for the u. K. Even with some fiscal stimulus it seems likely for 2020 and some deal on brexit or continued uncertainty on brexit it will continue to run around that kind of growth rate. Balletlook at janet, the of this december 12 and afterward. What is it United Kingdom is forecasting for hsbc in the next year . You have to do it without knowing the election, but how are you going to write the year and year forward piece on the United Kingdom year end year forward piece on the United Kingdom . Janet we arent planning to publish until december 12. We typically publish our year ahead final numbers in middecember. Mike the bank of england when they are making their forecasts, at the moment they make them based on policy. They have to base it on the income but governments view we will be leaving the eu with a brexit deal at the end of january, and by the end of 2021 we will be in some sort of canada trade deal. That is current levels were a stronger. Those are the kinds of assumptions we are making in our forecast at the moment, and depending on the election outcome we would accordingly alter our forecasts. Francine what does this mean for pound . ,anet our currency strategists he likes to say he doesnt have a forecast for the pound he has a framework on baseweighted probabilities for electoral outcomes. He things at the moment the pound is currently fairly valued at around current levels of 128 based on the probabilities there is a brexit with a deal he would look for the currency to be a little firmer on the back of it. Of hsbcenry stays with us. President tru a speech on trade and Economic Policy at the Economic Club of new york at 12 00 p. M. In new york, 5 00 p. M. In london. This is bloomberg. Tom good morning. Bloomberg surveillance. Tuesday, bonds trading in america, the president will speak in new york at the noon hour. Francine lacqua in london. Tom keene in new york. In dubai with decades of america,ve on latin over the weekend in bolivia debate of a coup or noncoup. And argentinarest being argentina, are they idiosyncratic or are some of the parts at this moment for the consummate . Cofor the ntinent . Idiosyncraticse do all of these stories. The most eyecatching ones being bolivia and chile which have been in the news for several weeks now. Those are very different. In bolivia you have clearly a president who has resigned, and perhaps a shift to perhaps more fiscal responsibility. In chile you have an unhappy population about the levels of austerity that have been prevailing in the prospect of a shift towards a more populist measure, less fiscal responsibility ultimately. Bolivia, i mean, it is not. Ntial, but its explain bolivia and what that symbolizes to adjacent nations. Justin lets be frank. This is a small economy. Bolivia is a 40 billion economy and doesnt rank anywhere close rank anywhere close to some of its neighbors. Chile is 300 billion, a much bigger market. Brazil is in the trillions. We are looking at a very small justnt of the not emergingmarket landscape, but the latin american landscape. Otherms of how it impacts countries, probably very little. It does have debts, dollar debt, and investors are keeping a close eye on that situation and how long this uncertainty before the country holds fresh elections, if that is what its going to be. During that period they will be looking at if they want to hold onto these bonds. Bolivia has a good record of paying its debts and has not defaulted since the late 1980s, so its not like some of its neighbors. Francine overall can you infer what happened in bolivia to other parts of latin america . We are trying to figure out exactly what happened in argentina and if that would spill into neighboring countries. Is this a similar thing . it is similar in the sense that it is political turmoil. Investors dont like uncertainty. There are popular protests involved. When you look below the surface, some of the dynamics are very different indeed. As they say in bolivia, you have a situation where a president had really been the guy running the whole show for the past beent 14 years and has perceived as hanging around for too long by the populace. Now the country is headed towards fresh elections. In chile, it is different. Newcomer, but the system is under the microscope in chile. They are asking for change, and going to look at drawing up a constitution. Argentina is about a new electoral change and shifting towards less fiscal responsibility and how to sort out the heavy debt load. Venezuela, if we want to talk about venezuela, venezuela is always there and is likely to be a problem for some time to come. Francine thank you. Justin carrigan in dubai. We are back to janet henry of hsbc. Away from the idiosyncratic stories, this is a dollar story, a fed story when it comes to emerging markets. What does dollar do from here . Janet we have a very stable dollar. 1. 10 levelone poin for the foreseeable future. Some investors are getting more euro. Ve on the that is a quite good story for emerging markets because it means a weaker dollar, but thats not our forecast. The risk will take a turn for the worse as the dollar rallies. That changes the em outlook for markets. Francine how about trade . Some countries must benefit from trade because they are automatic, like china is number two for exports . Janet a lot of those are within asia, and some strictly speaking arent emerging markets, but the more exposed economies like korea and taiwan would benefit because of the china trade. It depends on the product. Taiwan has done better than korea. Tom this brings up an important point. In particular, with the president speaking today in new york we believe on trade, he believes you can set up strict bilateral agreements. But there are leakages. The leakages you describe in asia, are they the same in europe . If we go germanyu. S. On autos and the same leakages happen . Janet leakages can always happen, but it is difficult given the framework of the eu that we get any concept of a bilateral trade deal between the United States and germany. Any supply from the german side to the United States has to apply to the whole eu. Youall other trade areas would expect potentially some sort of linkages, but it is difficult to get into a backdrop of ana different set of rules ad