World. Our bloomberg voices are on the ground with this mornings top stories. We want to start in hong kong, where the chaos continues. Police and protesters clashed again after violent weekend standups. The Chinese Foreign Ministry Spokesman reiterated beijings support for the police force, calling the protesters extremely violent criminals. Precedent, you can see what is happening in hong kong right now is not a peaceful demonstration. It has turned into a violent protest against ordinary people led by a small group of extreme violent criminals. Alix joining me from hong kong is karen leigh. Walk us through the significance of what happened over the weekend in terms of escalation at the university. Anotherong kong had week of chaos after a week that has paralyzed part of the city. Carrie lam and other officials are urging protesters at the university to surrender, even as activists are calling for more rallies near the campus to support these demonstrators cured police and protesters have clashed around the university for much of the day. It has legible people arrests and injuries. Dozens have tried to flee. There been battles. Better news for protesters, Hong Kongs High Court found the government controversial mask ban is unconstitutional. This delivers a fresh blow to the Carrie Lam Administration as they try to contain these increasingly violent demonstrations. All of these scenes is hong kong braces for another delay another day of destruction after it was brought to a halt for much of last week. Alix thank you very much for the reporting. We want to stay in asia. The peoples bank of china trimmed its shortterm policy rate for the First Time Since 2014 after the pboc warned the chinese economy was facing greater difficulties from the slower investment and sluggish Industrial Production. Joining me on the phone from hong kong is bloombergs chief agent economics correspondent. The significance of what happened over the weekend and the warning about the influence of Monetary Policy on the economy . There is no doubt it was another warning from the pboc that chinas economy continues to face downward pressure. We know some of that is domestic driven. We also know some of it is external. The slowing World Economy and the trade war with the u. S. Pboc used its Quarterly Report and the actions and the money market to single they are concerned but they are not panicking. They will pull a lever to ensure the economy keeps ticking over, that growth remains stable. They will not rush and roll out the stimulus we saw in previous downturn. There is no hint of cutting the benchmark rate or rolling out major stimulus beyond what theyve been talking about in recent months. That concernsis about Monetary Policy transmission, the system is working in china. Some concerns with pork price impact and the broader inflation, but theyre not hitting the panic button yet. Alix you get any sense that if there is a trade deal, even a phase one trade deal, it would help stabilize the economy, over these be structural issues irrespective of what is happening with trade . Enda is all of the above. Theres a view that a deal would boost the manufacturing sector. But there is also the view that these issues are domestic driven and china. Will not change because of the trade war. It could even embolden the hawks in the chinese government. Theres a view it would take a rolling back of all of the tariffs the u. S. Has imposed for there to be a material lift in chinas economy. I say it would be taken as a positive but not a game changer. Alix thank you appreciate that. We want to head to washington. Impeachment battle continues. Speaking on cbs face the nation, nancy pelosi says she is giving President Trump the case to make the chance to make his case to the intelligence committee. I want to make sure he does not intimidate the whistleblower. And before the committee speak all the truth he wants. You cannot expect them to do that . If he wants to take the oath of office. He could do that in writing. He has every opportunity to present his case. Alix joining us with more from the white house is kevin cirilli, bloomberg chief washington correspondent. It was all the rage of the weekend and on snl. What will we find out this week . Kevin three days of testimony set to kick start tomorrow is the impeachment inquiry public phase begins week two. Tomorrow one of the Top National Security officials advising the administration on ukraine, who was on the call in july of this summer when President Trump spoke with ukraine president is set to testify publicly before the house intelligence committee. On wednesday, and key figure in all of this set to testify publicly. That is gordon sondland, he is the ambassador to the European Union who reportedly now, according to public and private testimony, spoke with President Trump for an update regarding where president zelinski was with regards to investigating possibly joe biden and his son hunter biden. All this comes as republican still sticking by the president. The president not at risk of losing key republican support. According to sources spoken with throughout the weekend, wednesday Gordon Sondlands testimony will be crucial. Very quickly, new political news. Louisiana democratic Governor John Bel Edwards won a second term, defeating republican challenger eddie wrist bone. Eddie rispone. This comes as the president made three trips to louisiana to campaign for republicans. Alix kevin cirilli, thank you very much. We do want to turn to one of the largest ipos in history. Saudi aramcos race to go public. Devaluation to 1. 6 trillion, one below the initial 2 trillion goal. Joining me on the phone is bloombergs Matthew Martin. What did we learn from the launch of the roadshow . Matthew the Company Kicked off the ipo yesterday with a meeting of investors in react. What is notable from the meeting is that the price range will top out around 1. 7 trillion, which if they reach that range would mean aramco should be the biggest ipo in history. Looking at the investors in the room yesterday, no surprise they are coming from saudi arabia. An international roadshow has been canceled. The focus will be entirely on raising money from saudi investors. The International Investors were very reluctant to invest in the company above a valuation of 1. 5 trillion. Now the books are open and local investors will be submitting their bids around two weeks from now. We should start to see where the final pricing is likely to come out. Alix bloombergs Matthew Martin joining us. Now we turn to sherlock up where lankaose early sri thee the it shows country remains deeply divided along ethnic lines. Joining me is bloomberg south asia government editor. Walk me through the significance of what happened over the weekend. What we have seen is a return to a government which is exploiting those racial and cultural divides you have talked about. He won the presidency when his brother was president , he was defense secretary. He oversaw the army, which brought an end to the brutal civil war, a three decade long civil war with separatist. Many in the Community Welcome to the end of that war, but the tactics the army used were he hascriticized and been accused of serious human rights violations. Accusations he brushes off and these things never happened. The voters are presented with a stark choice in that election. They went with the guy he was known for getting things done at any cost. Bullard,ombergs ruth thank you very much. We will rabbit out in london. Less than a month from the u. K. General election. Aking from the british Boris Johnson canceled 2020 tax cuts for businesses and spoke about brexit. One of the advantages of voting conservative in this election is we can and will get it done, and get it done in a matter of weeks. We have a deal that is ready to go. Just add hot water, stir in pop. It is there. What did we learn so far at cbi and how does that influence the election in less than a month . Leaders, two Party Current Prime Minister Boris Johnson and labors Jeremy Corbyn have been speaking at the cpi event, making their pitch to businesses. Johnsons conservatives, traditionally the party of tax s, have unveiled a a pause on a tax cut, which would keep 6 Million Pounds in government funds, which he says he wants to use for government spending, health care provisions. Jeremy corbyn has been trying to convince that business audience he is a friend of theirs and his policies, which include nationalization of key Public Utilities and broadband, will not harm business interest and could be good for britain in the long run. They have been making this competing arguments to the audience. Alix thank you very much. Stay tuned with bloomberg. We will hear from Jeremy Corbyn. We will have that exclusive interview within the next hour. And driving into profitability. Heres Something Else that caught my eye. Willceo says their new ev turn a profit on day one. Point with aprice package in the mid 30,000. It will be attractive to customers. It will make a contribution. Ford has fallen behind in the ev race, where carmakers are struggling making automobiles without turning a sustainable profit. One thing that will help ev adoption rates are more models. Lnc automotive says there will be 110 choices by 2025. At the same time, they see sales quadrupling in the u. S. How willing how much are you willing to pay . Carking the mustang muscle to gain a foothold in the eb race. Coming up, much more on your morning trades and analysis on the market. This is bloomberg. Alix time for the bloomberg first take. We will give you the news and the trade analysis and markets. ,oining me is Damian Sassower the vincent cignarella, former fx and rates trader, and joining us is ian harnett, absolute Strategy Research keep investment strategist. Happy monday. It was a lot of news over the weekend but the narrative stayed the same. I want to start with hong kong. Vincent, if you are trader, the narrative is it is starting to bleed into other markets. Do you see that . Vincent not just yet. Friends of mine on the ground tell me they are concerned the China Military may have to come in before the end of the year. Kowloon bay is shut down. The violence is getting worse and worse. , hehat were to be the case would certainly see it impact markets. You would certainly see it impact markets. We saw threemonth yield differentials between the u. S. And hong kong blowout. We saw the hong kong curve flattened sharply. Will seene way you default expectations get pulled forward ever so slightly, maybe from the fiveyear to the two year, the two your the one year. That is one thing traders are looking at. Hong kong has been are black swan for the next 12 months. You have a Global Manufacturing system based on china. The Global Financial system based on american dollars. Hong kong is where these things meet. It is the fulcrum that can explode to damage things good vincent if the militant to damage things. Vincent if the military needs to go in, getting a u. S. China trade deal at that point will be impossible. Either the deal gets done soon and then china can do what they need to do to control the situation in hong kong, or that goes and the deal is off the table. Ian that is the optimism there in the market. Situation, the trade deal gets off the table, then you get a big reversal on the equity market, not just the fx market. Damian it is rate differentials. If you look at the china yuan versus the u. S. Dollar, it tracks closely. We were at 30 basis points in january. Now we are at 130 basis points. That is a huge move, and the yuan has not play ball. It is undervalued or yields are high. Ian we will have to see adjustment in these markets coming through quickly. Alix what i continually get confused on his who has the leverage . The narrative is you have impeachment on all of that that will squeeze President Trump. Also the governor election in louisiana. The flipside, you also have the bbc over the weekend the pboc warning about growing growth and inflation. Who will win that . Vincent the scary part is both sides think they have the upper hand. [laughter] vincent neither one does. They both need to get something done quickly. The u. S. Plays hardball and then china backs off, and then china plays hardball and the u. S. Backs off. Someone needs to get between them at this point and say lets have a deal and get it going goo. Ian china has all the cards. President trump needs to get elected. President xi has a lifetime tenure. China has longer game to play. Our view is there may be a trade deal but it will be on chinas terms and chinas timing. Damian if you talk about that sevenday overnight repo rate cut, which is basically nothing. They cut rates than they showed we have a bigger warchest of tools to use, in the same breath, there released there thirdquarter Monetary Policy report and talk about not using as much because there are structural impediments to the cross cyclical in any event, it is funny because china can cut rates and sound hawkish and vice versa. Ian they are happy to deal ever. There are stresses in the system. They are worried about the debt level. They will not do a big easing. Do not hope that will be the drive in these markets. Vincent we do not know what that debt level is, only they do. Everybody looks to look at the situation and say china has three chili dollars in reserves. We do not know how much of that 3 trillion in reserves. We do not know how much that is already pledged to the debt. Alix that is the macro backdrop. How would you position . Vincent this week, to start the day . What looks good to meet his shortterm sterling. I would not get married to that trade. We will see a kneejerk reaction pop higher as the conservatives more likely than not take the helm. They will run into thick water between 1 30 and 133 and the realization that they have to do trade deals with the group they just left on shaky ground that the pound and British Assets may not be as attractive as they first seem to be. Damian from my perspective, and a world where you have negative yield and risk of recession, it is difficult to move down and credit quality reach for more yield. You want to lean into some of those dislocations and take a relative value perspective. One of the things we like, to your point, and you made the right point last week, comparing hong kong to places like italy, may be two a fiveyear cbf flatters might be a good way to play because if china does come in, you will see that curve flattened severely. Ian for us, ira muff rate we are saying for us, im afraid we are saying look at the optimism levels. Look at the sentiment on the vix, it is dragged down. We think volatility will kick back in. Vincent this is a good point. Alix great conversation. Did you see that damien called you vin . His mom is not going to like that. [laughter] alix bloombergs vincent sassower. , damian ian harnett of absolute Strategy Research will be sticking with me. Any charts we use rather show you can check out on gtv. This is bloomberg. You are viviana watching bloomberg daybreak. The board of hp unanimously rejected a takeover offer from xerox. The company says the bid is too low, plus it raise question about xeroxs prospects in the printing industry. Hp says it is open to a merger but says fundamental questions need to be answered. Spend 4. 4 billion dollars on its new factory in berlin according to a german newspaper. The paper says the first production line up the plant will fact will manufacture suvs companywide. It could roll off the Assembly Line as early as 2021. Chinese consumers are rediscovering their appetite for iphones. Bloomberg crunching the numbers and finding during september and october apple shifting 10 million iphones to china from a year earlier. That is a 6 increase. That confirms the iphone 11 is selling more strongly than its predecessor. That is her Bloomberg Business flash. Alix thanks so much. I still cannot got my new iphone. I have an ipo i have an iphone five. With apple posting a record high. One of the stocks leading toward the dow getting to 28,000. How do you think about those things . Ian look at the concentration of this market. That is one of the things we want to concentrate on. Apple, microsoft have been leading the market. I still worry that when we look at the tech stocks, they are not consumer stocks. They are also advertising stocks good what we found in 2000 with the tech bubble is we did not think the tech stocks were cyclical. Their end buyers work. That is the thing that worries us. If Economic Growth is slowing, if earnings are coming down and cash flow starts to get hit, the consumer side, perhaps the apple side will hold of will hold up. These are luxury goods, remember. The Software Stocks will come under pressure because the advertising will be under pressure at that point. Inx do like other areas tech . Ian i think it will be the apples that hold up relatively well compared to the advertising based stocks. But ie tech on a neutral, think there is a risk if the markets come down there will be a role for the tech stops to play. Alix ian harnett of absolute research will be sticking with me. Ipoi aramco setting its well below the initial to trillion dollar goal. Our next guest says money raised is relevant. Ellen wald tells us why. This is bloomberg. Alix this is bloomberg daybreak. I am alix steel. Happy monday. S p futures going nowhere. You at health care, you had tech , you had industrial setting new records. Not seeing a lot of movement otherwise. That 28,000 at the dow, Retail Investors be into that. The dax flat. In other asset classes, quiet with the exception of the cable rate, jumping one for present. That is not jumping 1. 4 . Other than that, not seeing a lot of movement, whether you are in commodities, fx, or rates. One thing that did happen is u. S. Stocks had a record high, but worries they may underperform going into next year. That is according to morgan stanley. Morgan stanley sees 3000 on the s p and they write we see the biggest potential upside in markets with a clear path to achievable earnings of like japan and em or multiple rewriting on falling political ope. Like europe or car do you agree it is more about em in europe . Ian no. We think you are an environment where global Economic Growth is slowing you have a risk of a u. S. Recession. In those environments, where markets come under pressure, the u. S. Equity market continues to outperform, the dollar continues to outperform. Flipside, talking about the 2020 outlook, the fed cuts will bleed through the economy in a good way. It is easy financial conditions. I think tariffs will peak. The idiosyncratic events like oil prices will stabilize. How do you think of those things . Ian what we have is the fact that the ism, you are looking at ceo confidence. These are recessionary levels. So far all we have is Interest Rates down half a percent year on year. Normally if you get that slow down, if Interest Rates come down 400 basis points, bond yields down 200 basis points, a lot more monetary easing that needs to be done to rescue the economy. Pex has been down for the last quarters. We are looking at an environment where if unemployment starts to rise, announcements like the we work announcement this morning, that is not great news for the economy. You will have an earnings recession in the united states. You already have negative earnings year on year. People are ignoring this and all this rise in the equity market has been multiple based. That only works of Economic Growth picks up her inflation starts to come down. We do not think that is the case. Alix pushing back on the earnings part, we will have easy comps year . You are laughing at me. It does not matter . Ian if you get a recession, earnings in the recessions in the last 70 years, the median decline has been 15 . While we are talking about the u. S. Markets being at new highs, that s p 500, i want to give a worry forng heartfelt the 129 ceos who share prices are in bear market territory. That is almost a quarter of the s p. Half of the s p are in correction territory relative to january 2018. This is not a broadbased bull market. Active managers have been having a tough time. There is a different narrative underneath the surface of these markets. Alix to that point, lets take a look at this chart. This looks at different regions like the u. S. , europe, and em on a value versus growth index. What i was most interested in is what has happened with the value outperform the s p. Youve seen value trying to outperform. Are you fading that . Ian absolutely. Look at the trend on that chart. It is still downwards. We had a bigger value rally in the first three months of this year, a much bigger value rally at the end of 2017. This is a very muted cyclical rally and we would be selling into that. We think you still have muted Economic Growth. If you have muted Economic Growth and economic environment, growth dominates value. You need to reach escape velocity to believe those value stocks will go up. Half of the Worlds Largest Financial Institutions are still down 20 . Alix does that mean youre buying the long end, you will by durations, you will buy gold . Ian yes. 1. 9ear treasury at 1. 8, actually look like a good place to lock in some yields. Alix do you still seat 1. 25 . Ian i still see 1. 25. The fact that short rates have stabilized at this 1. 5 level, 1. 25 the end of next year, that could be closer to. 5 or. 25 if growth slows. That will lead to Growth Stocks continuing to outperform value. Value is unlikely to explode until we have all of those earnings downgrades out of the way. All of the earnings weakness, and we can see in previous recessions the time you wanted to buy equities relative to bonds was two thirds of the way through a recession and not until the fed had completely slashed their Monetary Policy framework. Alix glass halfempty. I knew it. Ian less than half. Alix a quarter full, maybe. Ian harnett, you will be sticking with me. We want to get an update on what is making headlines outside the business world. Viviana hurtado is here. Viviana we begin in hong kong where hundreds of demonstrators are holed up at a university after police and protesters battle throughout the weekend. Police demand they drop their weapons and leave peacefully. They are warning live ammo could be used. Please have fired rubber bullets and tear gas of the protesters. Demonstrators have thrown gasoline bombs and bricks. Over the weekend, signs of progress in u. S. China trade talks. Chinas key negotiator speaking by phone with Steven Mnuchin and robert lighthizer. Beijing says they had constructive discussions about concerns in the interim deal. Six months ago, the two sides were close to an agreement. Then it fell apart. After getting the aramco ipo done, saudi arabia swallowing its pride. The valuation targets set below well below crown prince salmans goal of 2 trillion. S is to ensure the largest aramco also canceled the london leg of its roadshow. That is another sign the deal will mainly rely on richard sallys and other local investors. Sallysews on rich and other on rich saudis and other local investors. 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. I am Viviana Hurtado. This is bloomberg. Alix for more on the saudi aramco ipo, ellen wald joins us on the phone. Great to chat with you. The valuation is it right . Ellen the valuation is going to be whatever the market can handle. What is interesting is the big question is can it rise from where they are setting that valuation right now . They are not looking at international roadshows anymore. The reports are they have canceled all of those international roadshows. Europe, the united states, asia, and they will be relying just on saudi capital. That could mean there is not going to be a lot of liquidity once the shares hit the market. That could mean we might actually see the price rise in the beginning of this ipo, possibly up to 2 trillion. It could be they are playing it right to hit that valuation after the ipo. They could be creating a bubble. Alix is there a way for an investor to play that, especially if a longerterm valuation may not be too trillion dollars . Ian exactly. An interesting situation ellen exactly. An interesting situation is emerging. It is possible that with low liquidity going into this the price could rise in valuation could go up. There could be an opportunity for Foreign Investors to make money, considering the fact saudi arabia is putting a lot of incentive on saudi investors not to trade. For Retail Investors, there is an incentive if they do not sony shares in the First Six Months if they do not sell any shares in the First Six Months it would get bonus shares. Within the First Six Months theres a possibility for Foreign Investors to get in at the ipo and cell as the price goes up. That could mean that within a couple months we could see a big drop in the share price for saudi aramco, which is not what the saudi government wants. We see bankslix are willing to lend more money so individuals can go and leverage up more to buy the shares. There been rumors that russia and chinese investors will also be getting in. What does that tell you of the risk for the individuals that are buying the stop versus the sovereign funds . Ellen this is a huge problem for Retail Investors. I have had people asking me, even individual saudis saying should i invest in this aramco ipo . The real question is do not invest money you do not have in this ipo because it could go down and you could lose everything. That creates a troubling prospect for the future of the saudi economy. This ipo, the money is supposed to be use to diversify the saudi economy. Instead what we are looking at is a transfer of wealth from big Financial Institutions, big businesses, rich families, and individual sallys to the government individual saudis to the government. That does not look like Economic Diversification. Alix fairpoint. To push back, it is like we will do is that a real conversation to be had within saudi aramco . Ellen saudi aramco is not in charge of where the money is going. It is going to the saudi government according to the the ipo prospectus. How much money is this going to generate . 25 billion dollars to 30 billion . That is not that much in the grand scheme of the saudi budget or the saudi sovereign wealth fund. What kind of projects are going to get done with this money . Work you have done so much on saudi arabia and its government and its country. What happens if it doesnt work out . They do not get the Economic Diversification they are looking for, they get a little bit of a bubble. What did the saudis do . Ellen we could be looking at interesting but quite serious geopolitical situation developing because we are seeing across the region, we are seeing Economic Issues at the forefront for many people. The lack of Economic Opportunity. How long can saudi arabia continue with its current plans if there are not Economic Opportunities . If it is not delivering on Economic Opportunity on jobs, on growth, on development or its people, how long are they going to be satisfied with the Current Situation . That is a question. They can spin the ipo is a political win. That is all it is. It is a political ipo to satisfy promises made. Once the promises do not yield any benefits for the people, they could be looking at serious political issues. Alix ian, weigh in on this. What did you make of the valuation spread . Ian we are looking at a market where oil stocks were already yielding close to 5 globally. It will be a demanding position for saudi aramco to hit this good what we have seen is a flattening of the oil price over last year. The saudis have been working hard to maintain these levels. What we are looking at now part what we are, looking at now is a very domestic issue. The idea that the ipo indices which have collapsed, ipo etfs down 20 in the second half of this year there is not a great demand for ipos. A recognition it will be difficult if we get an economic slowdown to keep the oil price high. Our view is wti could reach 50, and that that point you hit the fiscal balance on the sallys. On the saudis. We are looking at a situation of saudi saying we need to do this for domestic reasons. The democratization of access to wealth. They are trying to do it for those reasons. Globally, it will be a tricky situation. The last parallel i like to give you is 1987. The u. K. Government did the same thing with bp and pricing on october 3. Three weeks later, the markets crash. Alix we have to leave it there because i cannot crash because i cannot top that. Ian harnett and ellen wald, thank you for joining us. Great insight. Coming up, taylor swift bad blood with her record label prompts her to ask the Carlyle Group for help. If you have a bloomberg. Al, check out tv you can scroll through and check on anything you may have missed. This is bloomberg. Viviana youre watching bloomberg daybreak. A couple of big deals for airbus. Bloomberg has learned it is poised to announce in order for more than 100 narrowbody planes for air arabia. The list price more than 10 billion. Everett announcing in order for 50 airbus a350s. The list price . 16 billion. The first deal to be unveiled at the dubai air show. Hsbc closing a corporate account that help fund protest related activities in hong kong according to the Hong Kong Economic journal. Hsbc will not talk about the account in the story, but did point regulatory environments to ensure client money is used for stated purposes. Hsbc says if there is a discrepancy, the account can be closed. I am Viviana Hurtado and that is your Bloomberg Business flash. Alix we turn to wall street beat and cover three things this morning. Vision fund 2. 0 starts life small. Softbanks second tech fund raises a fraction of its target 108 billion. From taylor swift to major league baseball, we will take a look at pes reach into sports and entertainment. At the Hong Kongbased pe firm Hillhouse Capital bids for prized elevator unit with a 17 billion valuation. Basak. Me is sonali explain this to billion dollar softbank second fund. That is not totally what they will raise, right . They wouldtbank said put billions of their own money into this as well. Let me put 2 billion into perspective. Not only did they raise 100 billion for their first font, you have kkr raising 2 billion. You have tiger global targeting almost 4 billion. 2 billion at the low end compared to all of the other private equity firms targeting the same arena overall is not a lot to work with. Alix especially when there are out that in china, funds are pulling back but not investing. The pie is smaller for them to buy stuff. Is a hope that the valuation story would change in Silicon Valley, but it shows you there is still a lot of money pouring into Silicon Valley and a lot of people playing in the market with a lot less to work with. The market is a lot less hot than it was. Alix can they get to 100 billion . Sonali 2 billion to 100 is a go. Way to we will see how far they get. They said they do not know what they will do. Unclear what saudi arabia will do. How long until you go. We will see how far they get. Alix you do not you say i do not want to put my funny in a fun my money no fund that only raised 2 billion. Next, walk us through was one with Jerry Cardinale and redbird partners. Jerry was known for his work with jerry jones and George Steinbrenner when he was still working at goldman sachs. Now you have all of the players, not the owners of the firms striking out and saying we want more ownership over our brand, our rights. Show lasthing a rods night. It is about helping disgraced players come back and manage their finances. It is known a lot of players are not good at managing their finances and other people have so much control over the brand. This is them taking it back. Alix interesting. On the flipside, you have taylor swift fighting with carlisle to get more money out of the song she has. Sonali she made the appeal with carlisle. She is upset with scooter brown with Scooter Braun who has ownership over her earlier songs and will not let her use them. Now Elizabeth Warren and aoc have said something about this. She did not even say anything of badly about carlisle, she just appealed to them to try to help her out. Whyur last story is is the unit so hot . Sonali cash flow. This elevator unit is one of the crown jewels and will be why so hot . Another interesting name is 3g. Known mostly for consumer brands. In the next couple of weeks it will get hotter because they are wheedling down the buyers. You can see the set of buyers are global, from blackstone to hillhouse in asia to 3g. Alix sonali basak, thank you very much. ,n todays women on wall street numbers tell a story. Women are deserting trading floors because they say biases blocking the path to management. None of the top 10 banks has a woman as global fx chief. Banks say they are trying to hire and promote women. Upper levels of management do not show it. In the u. K. , the pay gap has put a spotlight on the lack of women in senior positions. Women make up more than 57 of the bottom pay quartile in just over 30 of the top pay quartile. Much more work to do there. We are looking at the euro mexican peso. That is as the fate of usmca hangs over the market. If youre heading out and jumping of your car, tune into bluebird radio hernych class the u. S. Unserious at Linda Bloomberg radio heard across the u. S. On sirius xm channel 119. This is bloomberg. Alix joining me as vincent cignarella, voice of the bloomberg audio squad. Check about every day by typing o. Sq ua autos in the middle of the election. My thoughts, most people think i eurosng, is i think the are set up for a downturn. Not so much against the dollar, but against other currencies. With the peso, you earn on the trade. If the usmca comes through, it should be a good thing for the mexican peso. Alix theres a lot of optimism baked into the euro . Vincent a lot of optimism baked into the euro and it has been baked in with the eurosterling close so that will see pressure if the conservative party wins elections, more likely than not. Alix bloombergs vincent cignarella, thank you very much. , watchup, denise prism denise chris home. What she is doing with industrials. This is bloomberg. Three days of testimony said to be kick started tomorrow as the impeachment phase begins week two. Gordon sondland is set to testify. Alix driving into profitability. Ford Ceo Jim Hackett says their eb will turn a profit someday. We have a price point with a proxy based package in the mid 30 thousands. It will be attractive to customers, it will make a contribution margin. Alix ford is revamping its marquee model mustang muscle car to gain a foothold in the eb race. In the ev race. Desperate for an ipo. Saudi aramco makes concessions to get to the public market. The international roadshow has been canceled. The focus will be on raising money from saudi investors. International investors were reluctant to invest in the companys joint alix the saudis the Oil Valuation and scrap the london leg of its roadshow. At the market, what you do with stocks at record highs. It has been a Selective Group of stocks Like Health Care and tech leading the s p higher but now you go nowhere. What will be the next catalyst . Joining me for the hour is Brooke Sutherland of bloomberg opinion. Happy monday. Brooke happy monday, we have ourselves a merger monday. Takeover bid monday. Brooke you are seeing more and more bidders come out of the woodwork. We have the report last week that free g, which is better known for its food takeovers is now you haveid hillside putting its name and the rating. It is interesting you are seeing these assets draw so much interest. On the health care side you have qiagen saying it is hearing interest from multiple bidders. Alix doesnt mean we are Good Environment when that happens . Brooke i think it is healthy. It depends on the Pacific Assets on the specific assets. In the case of qiagen, it has been beaten up. Alix you have to wonder what the 3g synergy will be with elevators. Brooke catch up and elevators and kraft macaroni and cheese . Alix can you eat in the elevator . Maybe. Stocks edging higher. Bloomberg Sarah Ponczek is looking at what is behind the rally. Sarah six straight weeks of gains for the s p is the longest 2017. Street since my nasdaq and dow included. If you look since early october, which indices have driven the rally . That is when the rally picked up steam. It is cyclical areas of the market. Industrials, financials, tech, health care, materials all up 7 . On the flipside, the trade off yearstart earlier on the all underperforming. , inou mentioned the dow october we were in the 26,000 areas. Three companies have accounted for 70 of those gains, that being united health, apple, and caterpillar. I also want to point out microsoft. Microsoft and apple are trading at record highs. If you add the market cap together, it supersedes that if the entire russell 2000. Astounding if you think of the numbers, but it is also been a calm ride higher. The vix is anchored closely to that what 12 level. Straight days where the s p 500 has gone without back to back declines. That is the longest streak since 2005. Alix good perspective. Thank you very much. Also joining brooke and i is Denise Chisholm. That is the question. If you have tech and industrials at near record highs, what do you do . What is key to remember is the starting point evaluation is advantageous to cyclicals. If you look at historic valuations going back to the 1960s, especially for group staples and there top valuation levels, only a few number of data points have led to a decisive rotation back to cyclicals Like Technology and financials over the next year. The starting point evaluation matter. The second point is the stimulus that has been put in place over the last year also matters. We can look at manufacturing globally or for the u. S. Specifically. The stimulus we see, and you can measure it by the number of Central Banks leads by nine months to a year. That is nine months to a year ago we started seeing that inflection higher, which means this is the exact point we should be on the lookout for a recovery. If that is true, that is the point at which we historically wanted to extend your time horizon to capture double the average market returns for the overall market, usually led by cyclicals like industrials and financials. Brooke to dig a little deeper on the industrial front, i think it is been interesting because we have seen a strong rally in cyclicals, and theres been talk of a bottoming in the slow down. If that is the case, it is a shallow slow down. As the earnings trajectory from here that robust . Denise it would be a shallow slow down if it stop here. It is nothing like 2016 as measured by orders Industrial Production or durable goods orders. The valuation level is different, meaning sales on a relative basis back historically and relative forward pe is in the bottom quintile levels. The valuation is different than we saw in 2016. Even if you do not get a vshaped earnings recovery out of that, you might get more from the valuation expansion then you are thinking of. The risk reward is still positive given the valuation backdrop. Alix in cyclicals, where you want to get into . We have seen banks and tech hardware outperforming the most. Where is there still opportunity for catch up or where the valuation still ok . Inise i like to denise like to focus on four sectors generally. Technology, Consumer Discretionary. The more interesting sectors are financial and industrial. That is giving the value focus i say. I just talked about the industrial the same can be said for financials. That is historically led to 7 performance. What is interesting about the 70 odds is that 70 steps regardless of the bad news we typically see, meaning even after yield curve conversion, even after the fed cuts Interest Rates, which you may think impairs bank earnings, historically speaking, valuation has been the point at which even though the news get worse, the stocks generally outperform, given it has the potential to be priced in. Brooke when you talk about financials and Consumer Discretionary, is some of that abet on the consumer staying strong over the next couple of quarters . Denise yes. Part of it certainly is. If you think about the consumer staying strong, the key part is the recessionary call. As much as you might get it consumption growth slow down, that is not just advantageous to the Consumer Sector overall. Clearly a recession call is. What we can take from the yield curve conversion is that what is atypical this cycle is that usually in the last two yield curve conversions, the fed has raised Interest Rates three more times. This time the fed is cutting, ushering in a different parallel for historical comparison. The Debt Service Cost that rose in the prior two cycles are not happening this cycle. If you use history as a guide, you can see that the base case is an extended business cycle, and despite an economic slowdown , the Consumer Discretionary sector still has a positive risk reward. Brooke you see the risk of recession off the table . Has that fully receded . Denise i do not think it is ever off the table. It sneaks up on you. When i study history, what i look like what i look at is that what you see clearly is recessions are rare. That is difficult to get into. The reason it is difficult to see is because it predominately comes from a shock. If you look at the prior yield curve conversions, there is a linear relationship between the shock you see in terms of Debt Service Cost and commodity debt spikes to the point at which from the yield curve conversion, meaning the shops actually matter. The shocks we have seen historically are not coming from those areas. Debt Service Costs are still low. Commodity prices are still low. We have to look in other areas in be on the lookout for shops. Even tarik on the lookout for shops. On the lookout for shocks. Doen the fact that shocks not appear to be in the typical places on the horizon, your base case has to be an extended business cycle. Alix Denise Chisholm will be stiffing with us because brooke still clearly has to ask about industrials. Brooke i have all of my questions ready. Lets do it. Alix saudi aramco sitting in a ipo target well below the initial 2 trillion goal. We will discuss with gary loss and micromet well. This is bloomberg and michael matt well. This is bloomberg. Alix saudi aramcos highflying vision for its ipo comes down to earth. Saudi arabia accepts reality and sets evaluation target at 1. 6 trillion, well below its initial 2 trillion goal. Joining us is gary ross and michael maduell, southern wealth filed institute president. Gary, i will start with you. Youve been there in this industry for a long time. You know the saudi well. What do you make of this valuation . Gary i think they like it but i think the market will not like it. If you look at the comparable financial metrics, you argue it should be under 1. 5 trillion, 1. 2 trillion dollars, one . 3 trillion. It is selling a small share locals to give them leverage to get the valuation up. Brooke does their risk if it is primarily locally owned . Risk, but theya will not get it. Alix canceling foreign roadshows does not help either. Michael, a big selling point they are trying to get out as they have this amazing dividend, they said they can also increase it potentially. Is that enough for investors to want to get in . Foreign a lot of investors are looking at the geopolitical risks, they are looking at the previous events that happened. They are also looking at the growth of esg investing. A lot of large sovereign wealth funds are not looking at also fuel investments. Norways sovereign wealth fund, some of the canadian pensions have passed on the deal. I think they would get a lot of s, thet from the saudi government pension funds. Brooke there was not a lot of detail on a Cornerstone Investor and the materials we saw over the weekend. Do you still expect that to come through from other parts of the middle east or china . Michael china is definitely a place i would be looking at possibly this ipo is quite amazing. The Bombay Stock Exchange has to point jewel 2. 2 trillion in market cap. I might see of conglomerate. Oila imports a lot of especially from saudi arabia and that might come in with the russia direct investment. Theres been a lot of activity between the countries in recent months. Alix gary, what you make of that . Russia, china, india, other countries coming into by this ipo. Then opec and opec plus. Are we mixing things that should not be mixed . Gary it comes down to the price of oil at the end of the day. If we are talking about 60 brent, next year they will barely be able to beat capex and the guarantee dividends. You cannot expect a lot of Earnings Growth unless you expect prices. That is basically the problem. Alix you see that reflected across the Energy Sector. When they were talking in the press conference, unveiling the ipo, when you talk about dividend yield and Oil Companies , the response was shallow looked higher because investors are penalizing them for their inability to further production and reserves. We should not be compared to a dying breed, large and significant headroom to grow the dividends. ,hat is a powerful statement calling other Oil Producers a dying breed. What you think about that . Gary they are not far from a dying breed themselves given the industry they are in. Is key advantage they have their lowestcost cost producer in the world. Termsave huge reserves in of the valuation of company per barrel of reserves the value is low. , 257uch of those reserves billion barrels of oil will be stranded assets when you look at 100 Million Barrels a day of oil demand and 60 of it is passenger cars are being attacked by electrical vehicles. The petrochemical sector, another 20 Million Barrels a day. That recycling, which will slow down the growth. There are a lot of headwinds on the demand side. At the end of the day, we still have 170 billion barrels of shale and 60 brent. Wheres the upside in price . Brooke talking about passenger cars and demanding. Air transport has been a linchpin. Airbus talking about having electric regional jets by the 20 30s. Can you expand on the risk the climate push has on aramco and the other majors . The climate pushes from the demand side plus the willingness of people to invest in the industry and a reluctance at the margin. That affects valuation as well. There is no doubt the move toward electric vehicles and electric short range planes, trucking in some cases, will have an impact on longterm demand growth. People talk about peaks. I can see a piquant demand by 2035 or 2040. That is the issue if you look at valuation, longterm valuation of an equity like saudi aramco. Alix michael, what do you think . Michael if you look at what sovereign wealth funds are doing , theyre backing a lot of Renewable Energy companies. A lot of money going into india and infrastructure across europe. There is a deal that just went down with blackrock and gic where they invested in a european natural gas play. They are picking and choosing. The saudi aramco deal will be interesting. One thing to note is the decision of msci inclusion is a big deal. Index, freen the money flows to that stock. Itll be interesting to see how investors are pricing that in. Alix also Something Interesting are the concessions being made on a technical basis to get this ipo. Retail investors, corporates to borrow more from banks. When you hear things like that related to an ipo, what is your reaction . Michael they want to make sure the Retail Investors pick the stock up and they will because theres a lot of patriotism. Saudi you saw the attacks of the saudi aramco facilities. This is their crown jewel. They want to support it. This is their exxon mobil. This is there apple. Ive seen a lot of saudi putting money into that. We also saw a lot of saudi shares and other companies being sold off in the last six to nine months, prepping people to participate in the stock. There has been a lot of anticipation. That is why the shift has been local, whether it is saudi arabia, kuwait, oman, bahrain. Brooke philosophically, the point of this was to establish saudi arabias independent commercial identity. Does this succeed in doing that, as most of the demand is local . Gary the point is to get money into the coffers so they move away from oil dependency. Sounds like an oxymoron given the fact that they are looking at maximum valuation for saudi aramco. That is the point of this. 1. 51. 2,one point 65 or it is still huge garnering of at 1. 65 or 1. 5 or 1. 2, it is still huge corner of revenue for them. Alix december 5 will be a fun day. That is when you start shares trading and it is the opec day. Bernstein came out today and said you will need upwards of eight one million barrel a day cap to keep brent above 50. What you think happens . Gary the saudis have been coming every day anyway. Why not cut . I do not think they want to announce a cut going into december 5. They do not want it priced into the market, but it makes sense they cut. If they do not, they will be penalized severely because every forecaster has a surplus outlook for 2020. I am not as pessimistic as some of the others, but even bernstein who is bullish is calling for a surplus. At the end of the day, they have to cut. Alix great to see you. Gary loss of black gold investors. Michael maduell, thank you for waking up early for us. Still with us is Denise Chisholm of fidelity. What is the valuation story when it comes to energy . Denise if you look at it back to the 60s, you will see even on earnings measures on a relative basis, they are only at median levels. We know they are cheap on book and other asset levels, but of the cycle stop here you would have the lowest returns in history. Earnings and cash flow based levels being on the medium levels is a problem. If you look at the Historical Data back to the 1980s and 1990s, when we have a situation of excess capacity or increasing supply, what you saw is despite the fact you can cut pacitti and raise operating cut capacity and raise operating margins and earnings, it was upset by valuation compression. That is what we have seen in the Energy Sector and that is what we will continue to see with the base case. The two times you wanted to step in as an investor, meaning 80 odds of outperformance is if , or the vastcts majority of those measures are in the bottom quartile. The risk reward is still negative given we can still see valuation compression to offset any Earnings Growth or improving operating margins on the horizon. Alix Denise Chisholm of fidelity will be sticking with us. Coming up, fedex firing back at the New York Times. The ceo calling for debate on tax policy after publishing a debate on the companys tax bill and lobbying practices. More on that, next. This is bloomberg. Alix it is a battle between the New York Times and the fedex ceo. This is a fascinating article over the weekend. What you make of this . Brooke it is not every day you see the ceo of a Public Company challenging the see of another Public Company, in this case the New York Times, over a story. A statement challenging the ceo to a public debate over tax policy. I am a tax nerd. Alix it seems little much. Interesting when you see them both coming out. More coming up. More on trade as well. This is bloomberg. Alix this is bloomberg daybreak. Equity futures around the lows of the session, reversing games. Reports beijing is turning more pessimistic on trade and would prefer to wait for after impeachment, after the elections, to finalize any kind of deal. You can see the underperformers in europe. In china, a similar thing. The yen is making a move. The cable rate is outperforming. You are seeing a bid on the margin in the bond market, and cyclical commodities exposed to trade are down as well. Crude up by 0. 8. Chevron phillips chemical is one of the Top Producers of ethylene and polyethylene and a lead supplier of aromatics and plastics. Spoke to the chemical ceo on how the trade war and tariffs are impacting his business. It slows down decisions that our customers make. They may refrain from selling any kind of inventories because their fear is that an unknown tariff will descend on them and the cost of their goods coming back to the u. S. From china could go up overnight. We have seen inventory destocking. You look at inventory levels in the ports in china, record lows. We know our customers are holding very little stock of plastic pellets and low levels of finished goods. That gives an apparent reduction in demand where there is inventory restocking cutback. Alix when you talk to your clients, what does everyone need to see to feel better . Mark need to see stability, clarity. We need a clear view on where tariffs are going to be. Are they getting higher . Are they going away . We need to know what the situation is going to be longterm. We need stability. Just like any business, it is easier to plan when you know the roadmap going forward, particularly for smaller producers. They can be put out of business overnight if they are suddenly hit with inventory that gets a large tariff placed on top of it. They have to be conservative in how they approach this. Once they understand what that landscape is, they can get back into the business of buying and making their products and selling them into the global marketplace. Alix have you noticed any shifts as far as supply chains . What have you noticed in terms of where you are shipping your stuff . Mark in the u. S. , it is fun a full and competitively priced. The middle east, same story. That is why we have been building assets in both places the last 20 years. It also gives us the ability to flex the supply chain. Middle east sources are not being impacted by tariffs the same way. We can shift supply chains to the tariff situation. Alix can you give me an example . Mark material that was supplying europe it is close. It is convenient. Iniffs come in to play china, raising the value of material going into china for someone who is not impacted by tariffs. Alix that was my interview with lashier. Ier, mark john leger will be stepping down as ceo and mike sievert will succeed him as ceo of tmobile. He is currently the chief operating officer at present over at tmobile. Apparently, legers contract was going to be up on april 30. We did hear lots of rumors he would be going. Brooke and they had pushed back on those. Now the question is, what does he do . It is hard to think about tmobile without john legere. Where is this going to go . Alix he will still remain a member of the board, but the question is, was he going to leave either way . Is there added impetus now . Brooke is he retiring . Is he going to play golf . Imagine thatt would happen. Mike sievert will be taking over as of may 1. He is currently chief operating officer and president. Of a, we heard the ceo Petrochemical Company talk about the impacts of a trade war. Thats get into the industrials. What do you think . There is clearly a lot of fear about a trade war and you can measure it in surveys. The problem, if you look back historically, and look at these levels, with ceo competence at these levels, cfo increase in capital spending, what you find is an interesting counterintuitive data point. If we are following these levels , these trough levels, you find a rebound in capex. That means more often than not these are an expression of fear, but often these surveys catch the ceo wrongfooted. That means they misrepresent demand. As much as there has been concern over the trade war and visibility associated with that, you see in surveys a tendency to hold during the recession, and that is not the base question. You could see a fence back in terms of either industrial spending or overall capex spending. That would wind up with the stimulus we have been talking about in terms of the number of Central Banks on a global basis cutting Interest Rates over the last year, sort of winding up with that potential rebound in manufacturing as well. A 0 chancek it is that we see a rebound over the next three to six months. I think it is increasing, given that what we are seeing in the stimulus has been in the past. Headlines aretest different from where we left them last week. You have this web sewing. Psawing. Do you with getting lumpiness in the data because of the way these lines flow . Denise i am not a ceo. I do not make investments based on headlines. I dont know how they do it. I think as an investor, you get very again, counterintuitive data points. If you believe global trade is going to contract, that has the highest return. If you look on a five year time global tradeook data versus returns on the market, you would see either no correlation or a negative correlation. That is not to say trey does not matter. It does mean one of three things happen, historically speaking. Be conscious of them as an investor. The market discounts in advance. I cap reiterate that enough i cannot reiterate that enough. Stimulus to offset it has happened over the last year. Three, there is more tailwind that we end up seeing emma versus the headwinds in the headlines on a daytoday basis. Aerospace has been a huge tailwind for the industrial sector and you are seeing some cracks. Concerning headlines out of the dubai air show about Companies Cutting back on orders. Do you see airshows continue to be a source of strength for investors . Denise aerospace is one of the highest values and highest margins in industrials. They have been better businesses over time. To the extent that valuation can improve to the extent valuations are still on an uptrend. If we see the recovery in terms of the stimulus plan the real laggard in the industrial sector has been machinery. That actually might be a more interesting opportunity based on valuation levels. That potential turn in manufacturing indexes. Brooke you have names like caterpillar. To the extent they are in a low or no growth environment, can you really see evaluation rebound . Denise what is interesting about valuation rebounds they happen before you see the rebound. Stuck we bonds usuallysix to nine months in advance of earnings recovery. We see that again and again this cycle. Was likely the reason is whether shapedshaped or u matters less than we think, and valuation levels hold more than we think. We have to think about those in advance of the rebound, because the rebound is not visible through the next six months usually. Alix we want to get an update on headlines making news. I cant talk. News, making headlines outside the business world. Viviana . Viviana a judge in oklahoma reportedly reducing the payout johnson and johnson must pay the state. Huge opioid marketing case. According to reuters, the award has been cut by 107 million. Why . Because the judge made a math mistake. President trump is backing off the flavored vaping ban he wants. The president is afraid it could lead to job losses and hurt his reelection chances. The newspaper also reporting the president s wife and daughter wanted him to impose a ban. The Trump Administration coming out with regulations that would force hospitals and insurers to disclose prices. Are requiringe Price Transparency in health care, forcing companies to compete for your business. Viviana the Healthcare Industry is expected to fight the president s plan. Oakland is 24 hours a day, on air and a tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Ofx Denise Chisholm fidelity still with us. In health care, where is a better valuation metric . Denise i think health care is tricky. When you look at the overall sector level, it is dominated by pharma. The problem when you look at the data is it is not at levels i like to look at in terms of free orsh flow cash flow earnings. When you combine that with decline in margins on the sector in 1999. Rgins peaked that looks at least to me as a value trap. Sectornities within the is a risk reward negative from that perspective. Alix Denise Chisholm of fidelity, always great to get you on tv, and brooke, thank you for joining me as well. Brooke thank you. It was an industrial focus m a day. Alix we said, we will talk about industrials. Cannot be retail. Breaking news is tmobile. John legere will be leaving as ceo april 30, 2020. The current c. O. O. , mike sievert, will be joining as ceo. To question is what happens john legere. Where does he go . There were rumors about him going to we work. He has denied that sense. The stock down almost 2 premarket. Interview exclusive with Jeremy Corbyn, leader of the u. K. Labour party. Bloomberg users can check out the charts throughout the show on the terminal. Browse the features. Check it out. Alix u. K. Elections are less than a month away. Boris johnson and Jeremy Corbyn both addressed countrys biggest Business Lobby Group at its annual conference. Anna edwards spoke corbyn after his address. Need to integrate bus and rail services. We need to empower services, bus services. They will have the power to do that. Locals will be encouraged to take over bus services question mark mr. Corbyn there will be no discrimination against them doing it. Thelly, i want objective is to make sure we have effective bus Service Across the country. London has a very good bus service, mainly because of the number of us who defeated the proposal to deregulate buses in london in the mid1980s. Because of that, we have this good integrated bus service in london, which is mostly franchised, but crucially its competition on quality of service, because there is a central collection point. There is a minimum level. Anna is there a role for private money in buses . Esther corbyn there is certainly going to be private money in buses, developing and making buses. They are very keen on the idea of more. Of course there can be. It is going to be empowering local authorities more than anything else. Emma the reason i dwell on this, on the buses the reason i dwell on it is i expected john i spoke to John Mcdonald in 2018 and he assured me we had narrowly defined the renationalization agenda. I have nothing up my sleeves, he said. And then we hear last week and this morning they say businesses are nervous about where your plans for renationalization and. End. As to corbyn i set of this morning the kind of society we want to create. The Public Ownership, i think we made very clear, of the rail network and real operating that should be in public hands. Royal mail is perhaps a natural monopoly, and therefore should be in my view in public hands, and linked back to the post office, which developed the postbank we turn royal mail and the post office into one. I think that is the right thing to do. Water companies have made enormous profits, sold off a lot of assets, been condemned by the Financial Times for their works. I think they ought to be in Public Ownership and would be much more effective working with the Environment Agency on river basin management and river management, as well as water supplies. Anna we know about the businesses you already intend to bring back international ownership. And you say there will be no others . Or could there be more, if you were Prime Minister . Mr. Corbyn we see the role of government as being in partnership with the private sector in many areas. However, i am not proposing massive nationalization. What i am more interested in is a growing economy with a more skilled workforce, and an asrastructure of transport well as broadband infrastructure which is effective across the whole country. I am very proud of our broadband announcement, i think will be the real game changer. Anna can you see what International Investors might be nervous to put money into the u. K. If they feel the government, if you are successful on december 12, might want to nationalize it . Corbyn they have seen the infrastructure is limited, and some have asked the country very hard to get anyone to invest because of the transport infrastructure. It is inadequate. There is lack of local skilled workforce. And there is very poor internet connection. Unless we fix those things, the inequalities between london and the southeast, compared to the northwest in cumbria, parts of the northeast, are going to get worse, not better. Youre latest polling party, doubledigit Percentage Points behind the conservatives. What can you do to close that gap . Campaign, get our message across, and point out that what we are offering to this country is to negotiate a trade deal with the European Union which gives a credible leave option alongside remain and put that to a referendum. We have to bring people together, wherever they voted in the referendum. Above all, it is about empowering young people with better training, apprenticeships, and equal status between apprenticeships and academic education. I think we have a great offer. The great Industrial Revolution issues we have worked out after a lot of development are really exciting. We were the first country in the world to declare a Climate Emergency following a motion by the parliament on may 1. I want us to host the Climate Change conference next year and help to do everything we can to do with the greatest threat this planet has ever faced. Anna if you are trying to close the polling gap, a lot could ride on the tv debates. How are you preparing . Mr. Corbyn i look forward to it, thinking about the message i want to get across and the type of government we want one that empowers people, one that helps people to achieve their ambitions and their aspirations, it also recognize the effects of austerity for the past 10 years of been to create a terrible burden of personal debt for funding middle age, and kids through uni or having to find the social care of older people. A publicly functioning Public Sector that provides the health care and education that is essential to all of our lives that is the areas we have been campaigning very strongly on. I have been traveling around the whole country and am enjoying it. Anna you talked about the investment you want to do and said you have Spending Plans the scale of which we have never seen. What are the limits on how much you think you can borrow to achieve that . What do you assess that would make debt markets nervous . Mr. Corbyn it comes up to the 250 billion social transformation agreement, Industrial Revolution investments. You are looking at 650 billion altogether for all of this. I think that is clear. It is clear what the bond issues will be to achieve that. It is clear with the investment objectives are. It is also clear that it will be locally determined in many places. So it wont be Central Government painting with the road configuration is going to be in lancashire. It would be local determination. Anna if you are successful in becoming Prime Minister, one of the things you will have to decide quickly is whether to ask mark carney at the bank of england to stay on, or whether to replace him. Is that something you can say what you will do now . Mr. Corbyn we have worked very well with mark carney up to now. Alix Labour Party Leader Jeremy Corbyn with anna edwards in london. Coming up, materials bumping up against resistance on friday. Could be set for a retest today. More on todays technically speaking. If you are jumping into your car, turn us on the radio and on the business app. Alix for technically speaking. Bill maloney, Charter Market technician, joins us now. Listen to bill all day typing in on the terminal. You are looking at a downtrend we broke out of. Bill unh stock surged 5. 3 on friday on reports that warrens newly released Health Care Plan was more moderate. Friday, with this big surge, broke out of this longterm downtrend in place since november of last year. Look for resistance around the february january highs, around 274. Waking that downtrend very significant for unh. Alix that resistance bill breaking out of a longterm downtrend is significant. Alix a downgrade over at morgan stanley. You are taking a look at that stock. Bill workday cut over at morgan stanley. You have a clear downtrend from the 226 peak. We have a debt cross, negative back in september. Look for support around 150, 157. Alix short term moving average going into the longer moving average. Friday, the breakout where are we now . Bill it did fail at the 2018 peak. You talk about that being potential resistance. A little changed today in the premarket. You want to look for 62. 40, and fridays intraday high. Resistance on the event today. Alix really appreciate it. Bill maloney all day check him out on the terminal. That wraps it up for me and bloomberg daybreak americas. Kobe up on the open with jon join him. Fo will and in the markets, a little negativity in the equity market. You had reports that perhaps beijing once to wait on doing a trade deal until after impeachment and after the election. That is weighing on the s p. The dax also down. The yen taking a bit of a bid. Cable still jumping. A move into the bond market. Commodities getting hurt as well. This is bloomberg. Jon from new york city, i am jonathan ferro. The countdown to the open starts right now. Jon stocks begin the week at alltime highs. Violence in hong kong escalating. Clashes with protesters intensifying. Saudi arabia aramco cutting its valuation. With seven minutes until the opening bell, good morning. Equities pretty much unchanged on the session. Bond market yields lower by a single basis point. Muted price action on the euro. The big issue. H the last man standing, beginning to can chile. The bulls are beginning to capitulate. The fear of missing out prompts a wave of optimism and jump in exposure to equities and cyclicals. Morgan stanley and ubs upgrading global equities. Morgan