Transcripts For BLOOMBERG Bloomberg Surveillance 20240713

The broader context is that Global Equities are headed for a third month of gains, so a fair amount of optimism priced in in terms of the prospects of a deal. Stock and bond markets were closed for thanksgiving and we trade for a half day today futures are lower in the 10 year yield is is no indication of sentiment. Oil on the back foot today but we are heading to a fourth week of gains ahead of opec plus a survey saying we are not likely to get a deepening of those cuts. Lets get first word news in new york. Breaking impartiality rules, that accusation launched against channel four news after the broadcaster used an Ice Sculpture to replace Boris Johnson. He failed to attend the live Climate Change debates featuring leaders from other parties. Donald made a surprise visit to afghanistan for thanksgiving he met with the president as well as u. S. Troops. He said peace stocks with the taliban have resumed amidst a push for a ceasefire to reduce u. S. Deployment in the region. Taliban wants to make a deal. Its got to be real, but we will see. They only want to make a deal because you are doing a great job. President isbank pushing back on including environmental goals in its Asset Purchase Program but some say it should integrate Climate Change into forecasting. This follows an open letter to christine lagarde, calling on the ecb to ditch climate polluters. Saudi arabia has had enough of other opec plus producers cheating on quotas. It has cut more than agreed to offset overproduction from the likes of iraq and russia but is signaling it will no longer compensate noncompliance from other member states. Opec meets in vienna. Global news, 24 hours a day on air, on tictoc, and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Nejra . Nejra thank you so much. Following the signing of the hong kong bill, theres one big question left for investors. How will china get back . The Foreign Ministry issued a threat of retaliation but has been vague on details. Set thed could course of trade talks and risks causing further delays to the phase one deal. Lets bring in my guest for the hour, the head of fx strategy at abpand founder and ceo of invest. A down day inequities. We maybe dont want to read too much into low volumes. How optimistic are you about a phase one deal . There. T of optimism it so difficult with any deal. I was just on the road in north america and they almost did not want to talk about it. So much comes down to one individual, donald trump. We all agree if we would see lighthizer or navarro resign, it would be a huge risk because they are the ones keeping the hawkish side going. But if theres any downside news from here, its that we all really expected some kind of interim agreement to be done and are waiting for those tariffs to be postponed. Nejra she thinks the Downside Risks are strong, what about you . How would this impact pensions . Tensions . Ive heard it might be kept separate and might not strengthen or weaken either position. I think it is part of negotiations. It is tactical and is not going to derail the discussion. Both parties are keen to find a compromise deal. Positived to be more in terms of outlook. The broader signs of sentiment are positive and priced in but i think there will be a secondlevel effect in manufacturing and consumer data. Some slightly more positive in terms of risk so i am more positive in terms of risk. Nejra you have been saying hong kong has put china on the back foot, but i wonder if you could see that the other way in that President Trump might feel more need to soft in the tone towards soften theand tone towards china. He needs to get reelected and feels the only way is to ensure the u. S. Economy remains level. So number one importance is to keep the economy going. Number one importance is to maintain social cohesion. So both parties are looking to benefit from this compromise. To be athis is going multiyour event we are talking about over various president s. But for the nearterm, both entities will be signing. You think the market will trade to the downside on . Is it if we just get a skeletal phase one . What will the downside look like . To be clear, i would also expect some kind of agreement to get done but i do think there is asymmetry because of the price and expectation. Done or that is not get pushes back difficult decisions or anything that escalates the tariffs would certainly be downside for markets. On the upside, it is harder to imagine. We could get a more expensive rollback of tariffs, like we could get resignations from some in the administration but its hard to imagine that upside. Nejra say we get a vague pays one pause in december. Thats what we are expected. Expected. I think it is positive. Guests staying with us. Coming up, a us healthy debate with less than two weeks over the election. Force johnson hits back over claims the nhs could be part of a u. S. Trade deal. Plus, high hopes on the high street. Can black save struggling retailers . Black friday save struggling retailers . Withre looking at rome protesters calling for urgent action to combat Climate Change. This is bloomberg. Nejra Boris Johnson is currently taking calls on ldc radio. Seeking just less than two weeks away from u. K. Elections. Lets get your business flash in new york. Four Morgan Stanley traders placed on leave over an alleged mismarking of securities. It concealed losses between 140 million. Morgan stanley is investigating the move linked to emergingmarket currencies. Hong Kong Airlines is delaying salaries. They say unrest has quote severely affected the carrier. Strained sincey before the protests began. Employees will be receiving their november pay package on time. Today, acado is searching after licensing it system to a japanese retailer, expanding to a new market. Forill develop a network japanese consumers and will have an expected sales capacity of around nine billion dollars by 2035. With less than two weeks ago, Boris Johnson says he will walk away from a u. S. Trade deal if the Health Service is not taken off the negotiating table. Their marks, after the Opposition Party accused him of being involved in secret talks. It gives johnsons conservatives a leave of just under 10 points a lead of just under 10 points. Thats more with rbc europe. Lets get more with our guests. What point would make you comfortable we are getting a majority. Some say is at least 10 points. The latest average puts us on the borderline. Aboutot have been talking seven Percentage Points as a threshold. Underneath, you would be looking at a Hung Parliament but the majority matters as well. Johnson has to get this deal the parliament but has to do difficult negotiations to get a free trade agreement. And if you have a tight majority, the chances are the heartlands will dominate conversations. Nejra you have added recently to your pound positions. Is that something you hold going into the election while offsetting it . We were quite negative in sterling because we felt the market was very complacent in terms of the political implications and we went to neutral and turned that the positive in october. Because we feel boris will under deliver on brexit. Whetherve he will win it is by parliament or a majority by the end of january. There will be tough negotiations next year, but at least it will clarify ongoing uncertainty which has been keeping the economy back and Consumer Sentiment relatively contained. Nejra i was talking to a colleague who was saying that, if you look at options markets, the path to higher sterling is clearer than the path to lower sterling. Is that how you read the path for cable . We are in the minority on this one. We know that a lot of our competitors have been positing outlooks. My personal view is that the postelection euphoria might be the high, and once we get the deal done, at that point you start focusing on the difficult he of the path ahead. Difficulty of the path ahead. An interesting speech in scotland really laid out obstacles between now and 2020 and i dont think we have come anywhere close to pricing in that level of uncertainty which exceeds anything we have seen so far. Nejra is eurosterling a better place to capture the upside or do you have a similar caution . We have been looking at it through cable, but i think that reflects our underlying, negative bias. You see it with cable, because if you do want a short position, you are not paying to carry. Nejra what is your outlook for the economy . And therefore, what the bank of england does. Would you say rate cuts are off the table . Yes. Generally, with a slightly more positive outlook on the economy, i think the u. S. Fed is behind the curve for next year. They want to be able to start raising rates in an election year, so that will gradually see a shift in sentiment across Central Banks and bond markets. So i think the cuts are off the table for 2020. And depending on what the environment does, we could be in for a surprise. Nejra are you adding to u. K. Equities at all . Predominantly, our preference is for euros and germany. Nejra your final thoughts on the bank of england for 2020 . Cuts or even a hike . I dont see the height. On hold scenario, i could see why they would wait, but if they are moving one direction, it would be a cut. Nejra great to have you with us. As we had to the break, lets listen in the Boris Johnson in two Boris Johnson. In to Boris Johnson. I guarantee we will be out. Or . I am making no saving clauses. We will be out. Janet, you are through. Morning, nick. Good morning my pride minister. Woman and im also a qualified nurse and i cant wait to leave the profession i love your how can you convince nurses toxtra 31,000 join us as well as persuaded thousands of nurses like me to stay . All, on the waspy point, i really appreciate the frustration and disappointment sony women feel about their situation. What are you going to do that . Do about it . What i cannot do is extend us extend verizon extend. Nejra this is bloomberg surveillance. Its a black friday, the official start of the Holiday Shopping season in the u. S. , and with thanksgiving falling later, it will be a bit shorter. Annmarie hordern joins us now. A shorter time impact retailers . Annmarie thanksgiving is falling on his last possible date. Maybe the retailers would want to blame it on that, but according to reports, americans are expected to spend more this holiday season. Shoppers are spinning out more than 1000 per consumer that has it at a total of more than 1 trillion. Where are the dollars going . Department stores and discounts remain popular with consumers expected to make purchases. The ones taking the cake are online th 56 going 56,000 going online. Many will be getting inspiration from facebook and pinterest. I know you and i are part of millennials and like to go into the Department Store and pick at our gifts in person. Nejra thank you so much. Lets get more with our guests. It has gonee global, so i want to find out how to see the global consumer. We have weakerthanexpected retail sales due to. Sales data. Generally, the consumer is both in the u. S. And in europe, doing relatively well compared to sentiment and data. Generally, they have been on a stronger footing, and we believe this is going to continue. Unemployment continues to fall. Indebted. Ot surly the underlying fundamentals are still there and i expect Consumer Sentiment continue to boost growth, especially in the u. S. Nejra is this an idea you would extend to china . There are signs of consumers becoming very indebted. Theres a great story generally talking about financial warning signs almost everywhere in terms of defaults. This goes beyond the consumer. Is china going to beat the thorn in the side of growth . The consumer seems to be holding up well. If you look at chinese stocks that are linked to domestic , you know, restaurants and services, they are doing well. So i would look for weakness in the consumer in other areas. We have seen the Canadian Consumer hold up well. Watchl be interesting to for signs of consumption slowing down. Elsewhere,lar story that might be where you see the first warning signs. Nejra in terms of signs the stock market might be giving, talking about negotiations earlier, do you look at equity markets . Priciest00 is the versus the shanghai composite. Is that a trend that is going to turn around in 2020 . Are outlook is positive in china and germany. The two countries will be benefiting from and ease of tensions. Germany is the worlds most open economy, over 47 is related to exports. Improvement, we are going to be seeing that in germany and china. Nejra why is it you are so positive chinese equities . I speak to people who are very cautious on emerging markets. Because of our view that the underlying environment is shifting towards a progrowth and protrade. It will be a long, extended discussion, but this first sit phase could see signs of growth. Nejra will the dollar hold up . Comes down to what the fed is going to do. We have been sentiment sensitive to the triggers that could cause a slowdown. I know people love to look for signs the dollar is rolling over , but it still has amongst the highest yields. It is difficult for the dollar to materially underperform. Nejra great to have you both with us. A and thanos stay with us. Merkelster angela party survived a blistering leadership battle, it is her allies threatening to blow up the coalition. Live in berlin with the latest, this is bloomberg. Nejra global stocks and investors continue to wait for progress on a trade deal. Boris johnson said he would walk away from a u. S. Trade deal if it included the nhs. It is make or break time for retailers. The winners and losers from last friday. This is bloomberg surveillance, i am nejra cehic. Abigail it is surging. Up more than 11. 5 . They are expanding into japan. They are talking about other opportunities in asia. Maybe one day they will look into going into china. Night. Re downgraded last they are facing a lot of questions in italy about the maintenance about italian roads. Almostes place is down 4. 5 . It has been downgraded by goldman sachs. They see a lot of headwind on the balance sheet. Nejra thank you so much. Now lets get to bloomberg first word news. Be a part of any trade deal with the u. S. According to Prime Minister Boris Johnson. He said he would rather walk away with a post Brexit Agreement with washington. Service ishe health being discussed. The bank of korea said the nations economy is bottoming out. It is going through its most painful moment. Optimism. Some economists say next year further policy action is likely. Saudi arabia is signaling it will no longer compensate for noncompliance from other opec member states. Offsetr the last year to production from iraq and russia. Investors to treat it like the European Market because its economy resembles europe more than the middle east. Six years ago it rejected the nations bid to join the European Index but israel is giving it another go. Global news 24 hours a day, on the air at tictoc, on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Nejra thank you so much. The debate around fiscal stimulus is rumbling along while the ecb is calling for government to take action. Germany is expected to continue ignoring the calls. In addition, Angela Merkels jr. Coalition partner is set to choose a new leader on saturday. For more on the economic of politics, chad thomas joins us from berlin. Great to have you with us. Walk us through what could lead to the potential disaster for the coalition. Here on pins and needles in berlin waiting to find out the results of a vote for the leadership of the social democrats. It will be announced tomorrow afternoon. Members of the social democrats have been voting over the past weekend who will leave the party and it will depend on who ends up winning that vote what direction the party will head in. You have the german finance minister who is one of the candidates. If he wins, he is likely to continue on in the Coalition Government with chancellor Angela Merkel. His main challenger has raised a lot of questions about the coalition. , being in in the spd the coalition has been harmful for them in terms of their support with the public. We are watching closely to see who wins the vote tomorrow, and that will set up the spds partys conference. Nejra it is interesting because sitting here in the u. K. , i was curious to see these two sides called remainders and brexit eers. When,do see the exiteers does that mean other options . Chad what will happen at this Party Conference as they will go through a number of different motions looking at the coalition. That will happen regardless of who wins. They will be looking at whether they want to stay in the coalition, if they do stay in the coalition what demands they would make of Angela Merkels party. Or an outright vote to lead the coalition without any further negotiation. Depending on who wins in this Party Leadership vote tomorrow, they will likely have quite a bit of influence over how the vote goes next weekend. Even if the finance minister wins, that does not mean he gets out scotfree and Angela Merkels government continues as is. The party could put more demands on the leadership to seek concessions from Angela Merkels christian democrats. What that means for Angela Merkel is should the spd decide to pull out, they would be looking at the possibility of new elections, Angela Merkel has said she will not run for reelection, or a potential minority government which makes it hard to get much done in the next two years. Nejra chad thomas in berlin, thank you so much. Lets get more with elsa lignos and Thanos Papasavvas. Are investors paying enough attention to german Political Risk in terms of the potential Downside Risks with the euro . Elsa i dont think affects will be immediate with the euro. There has been a lot of talk already potential stimulus out of germany. We are a little bit cautious with that. If you look at adjusted numbers with germany, germany it still had a recession. It is hard to imagine you will get that much more next year. If you do see an election, you have Political Uncertainty and it will not be a time for policymaking. Things could be delayed until summer or beyond. Nejra if you look at some of the dates out of germany, retail sales are looking painful. We also see german unemployment unexpectedly dropped with optimism edging up. It tells two stories about the german consumer. I know you like the dax. Is that based on you seeing a bottoming out in the German Economy in 2020 . Thanos factor number one is the broader easing of trade tensions. Ofondly, i believe the break schultz taking over the spd, given his credibility and bringing together the voters, it creates more push toward easier fiscal policies down the line. I am more optimistic on best excited. The other thing i think is important is while the germans are considering the domestic situation, macron is driving the agenda for the e. U. As a whole. This is another important point we should take into account. Nejra in terms of the eurodollar, the volatility what is it going to take for that pair to break out of the range . Elsa elsa everybody is asking that question. Is hard to fight because it has been a profitable trade. Just when you think it cant get any lower, it does. My eyes would be on the u. S. Rather than the euro. It drives decisions to hedge or not hedge u. S. Assets. If that were to change, it would have to be driven by the fed cutting rates rather than raising them. Nejra is the yield differential while you are negative on the euro . Thanos we expect the u. S. Economy to continue outperforming the europeans and for the Interest Rates to be more attractive in the u. S. Nejra Thanos Papasavvas and elsa lignos stay with us. U. S. Markets are closing early today. It is black friday the traditional start to the Holiday Shopping season. German lawmakers are concerned about the budget for 2020. Release its Third Quarter gdp number later. Rates are expected to show growth for a sixth straight quarter. This is bloomberg. Nejra this is bloomberg surveillance, i am nejra cehic. At least for Morgan Stanley traders fired or placed on leave in new york and london. It is over an alleged mismarking of concern is securities. Morgan stanley is investigating the move. Today, oconto surging after announcing its licensing. U. K. Expanding the ecommerce company. Serve japanese consumers. It is having an expected sale by 2035. Of 9 billion they plan to transfer customers to eon. In companies will consult 4500lan could put up to positions at risk. Nejra thank you so much. India is bracing itself for thirdquarter gdp figures. The data could show Economic Growth for more than six years. Bad news for the Prime Minister who is already taking bold steps to reduce the slowdown. Minister might be running out of policy space to act. Great to chip great to catch up with you again. What are you expecting . Hi. Our expectation is the gdp flath is likely to be at a relative to the june quarter. There could be a further slowdown to 4. 5 growth. Sharp spending has seen a jump in that quarter. In my view, that could counteract some of the sharp slowdowns seen elsewhere in the economy. The jump in public spending has been driven by a transfer of surplus dividend reserves to the government. Keeping public spending aside, the economy is going through downturns since the Global Financial crisis. It is quite a broadbased slow down. , a credit slow down and a host of other economic indicators. Down isroadbased slow something i have seen other people write about, as well. If we take into account the reasons why the recovery has been elusive despite the governments structural reforms, what does the policy mix look like to you from here in terms of what we might see from the government and the r. B. I. . It is quite surprising that the governments structural codem and the bankruptcy and they are seeing some stability. The recovery has not yet taken shape. The key reason for that has largely been unwarranted Monetary Policy rate hikes. Delivered a big financial shock to the system. The economy is recovering and the r. B. I. Has delivered 25 basis points. Points. I. Still has more to deliver for the easing. I think gdp growth for the should start to see some rebound going ahead. It would be supported by monetary easing and some amount of sector specific measures to be taken by the government. The government has already delivered big Corporate Tax cuts earlier this year. Increase theto fiscal deficit. Remains to be seen how the government approaches it. Still takeent could some sector specific steps to ease some of the stress. R. B. I. It seems like the might have to do a lot of the heavy lifting. Thank you so much for joining us. Lets get more from elsa lignos and Thanos Papasavvas. You are negative on that. Is that a shortterm problem . Thanos it is a mediumterm call. Been some reforms but i dont think you have been significant enough. They have been delaying. Aggressivell be more was structural reforms. Ofkey concern is the lack independence for the central bank. It is not just for india but tokyo as well. Talking,rlier we were you both agree the path is not necessarily one of weakness. Which emerging markets would you focus on in 2020 . Elsa you have to look at the emerging markets where the yields are high enough. It attracts influence. That has served certain countries very well this year. Where you begin to run into problems is if inflation starts picking up but you doubt the credibility of the central bank to respond with higher rates. Would we talk about turkey, that is the key concern, they wont be able to respond in the next potential timing cycle with new policy. Nejra if we translate the conversation to what we have , we dont want to lump them together, but what is your view of the response mechanism . Thanos we have been positive. Wrongfooted on the chilean situation. Proceed through the right route to address those key concerns. They are looking to change the constitution early in 2020 and look to address the concerns which are in my view like the yellow vests in france. I do not see it as an economic problem similar to greece because the underlying from finances the underlying finances of file are better. Have astay with us, we lot more to discuss. This could be the biggest lifting in singapore and close to a decade. Up, less than five weeks until the new decade begins. What to watch out for as we headed to 2020. This is bloomberg. Nejra this is bloomberg surveillance, i am nejra cehic in london. Less than five weeks until the new decade so what should investors watch out for as we head into 2020 . Lets talk to elsa lignos and Thanos Papasavvas. You say we might see a pickup in inflation in the u. S. To what degree . Thanos it is unlikely to be able to take action because it is an election period. Starts when u. S. 10 years to move higher. We are cautious on the 10 years. It is a steeper curve. Crisis but anon adjustment of expectations of higher prices with unemployment where it is. Nejra are you concerned the market is underpricing the chance for inflation . Elsa absolutely. Heard twomeetings i possibly three people mentioned the chance higher inflation. Everyone was looking to hire way. Looking at a potential growth slowed down, recession risks in the u. S. And elsewhere. I think inflation would come out of nowhere. There were a couple of people i agree with thanos, it is coupled with an uptick in fed notn, even with the being able to respond right away. Nejra what makes you think the consensus trait in this case could be wrong . It isi was going to say been wrong every other year. Every time around this stage in the year we hear people talk about the u. S. With the rest of the world. Side, we havency not seen that materialize with the consensus that everyone expects. I worry is we headed to 2020, you will see a similar cause without the foundation to sustain it through the end of next year. Nejra is the prospect totally off the table . Thanos i did not expect them in 2019. I thought it was a mistake, the fed should not have been doing that. The fed should focus on underlying economics. I do not expect it in 2020. Nejra that is your reason for continuing dollar strength. What does it mean for equity markets . Innos a gradual pickup inflation should be positive on the underlying market, especially with the underlying positive growth. Concerning for real estate. It should be positive. Nejra what is your view for the reaction function of the fed in 2020 . Do you expect it to hold over the potential for cuts . Elsa the reason they were able to cut in 2019 was because inflation was soft. I dont think that would remain the case in 2020. I know there is skepticism that they would be able to do anything in an election year. They do have an inflation mandate the need to respect. There are certainly people that would be looking to respond to any pickup in inflation. Nejra it is great to have you both with us. And lignos of rbc europe Thanos Papasavvas of abp invest. Bloomberg surveillance continues in the next hour. They will be looking at how equity markets are trading. Heading for a third monthly gain of Global Equities. Oil heading for a fourth weekly gain. Yield, trading on a half day today. This is bloomberg. When it comes to using data, everyone is different. Which is why Xfinity Mobile is a different kind of Wireless Network that lets you design your own data. Choose unlimited, shared data, or mix lines of each and switch any line, anytime. Giving you more choice and control compared to other top wireless carriers. And now get 250 off when you buy a new Samsung Phone during Xfinity Mobile beyond black friday. Plus, you can save up to 400 a year. Click, call or visit a store today. Tom this morning, signs of life in europe. German unemployment drops. Signs of life and United Kingdom. Johnson, it is inside of two weeks until i see guy johnson in london. New trading worldwide. What to do with all of that cash. Consider a lower yield and elevated stock prices. Over the river and through the woods, not for the president of the United States. Good morning, this is bloomberg surveillance. I am tom keene, overfed in new york. Guy johnson is in london. Two weeks into the election, i love your short election. What actually happens in campaigning in the next two weeks . Guy it continues to get amped up as we approach the election. One of the great things that will happen is the arrival of President Trump in the United Kingdom. This is something the tory party is worried about. To ensureson trying the nhs is believes on the block. Will donald trump deliver for Boris Johnson next week . Tom the history of the nato meetings were the queen will celebrate the 70th anniversary of nato. This is live. The Prime Minister of United Kingdom on ldc radio. Morningthe message this what is he trying to say through lbc radio . Guarantee thato the majority suggested is guaranteed. It is still a possibility, a distinct possibility we could end up with a Hung Parliament. Tory trying to ensure voters are out there voting. Tom we will have to see in the next 13 days. Of thanksgiving day surprises from President Donald Trump. He flew to afghanistan to have dinner with u. S. Troops. He also met with the afghan president. He is he said peace talks with the taliban have resumed. Keep itshe u. S. Will appointment in the region. Back at thena hit u. S. Over hong kong . The Foreign Ministry giving another warning. Beijing is unhappy President Trump signed bills backing the hong kong protesters. There are speculations it could lead to delays with the trade deal. Over to the u. K. , conservative Party Members worrying President Trump could wreck Boris Johnsons bid for reelection. They will meet in the summit. Corbynuld give jeremy more ammunition. Deny that is a possibility. It is make or break time for u. S. Retailers. Black friday kicking off the traditional Holiday Shopping season. One thirdavenue of annual revenue is captured in the fourth quarter. Global news 24 hours a day, on the air at tictoc, on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Tom thank you so much. Equity, currencies and commodities. Some will say this will be the slowest trading day of the year. Futures at negative seven, not much going on. Screen, the good equity market. 12. 38 is remarkable. I also mentioned deutsche bank, to say it cant find a bid is inaccurate but it has been tepid to say the least. Guy it has been the story for a while. At 1. 3 versusough an estimate of 1. 2. The year on year number at 1 ,. 9 was the estimate. Long, long way away from the ecds target of 2 . The volume is light in europe when it comes to equities. 61 . Equities are falling a little bit. We are keeping an eye on what is happening with the pound. Joining us to get a head start on what we need to know on this black friday is mike bell and nejra cehic. It was better than expected. It is stabilizing and looking pretty good. We are trying to understand what the prices are. We have to see a significant labor market for the German Government you feel compelled. As part of our scenario for next year, we expect some consolidation in germany. Fiscal stimulus is not the driving part of that. Some of the problems that have been plaguing the german manufacturing might be a thing of the past. We hope it will be a trade deal between the u. S. And china. Tailwind ine us a terms of Economic Performance next year. Difficult toit is see any stimulus anytime soon. Down guy the downturn is coming and you start to see numbers deteriorating. Mike if you look at the german Manufacturing Sector, it has picked up a little bit but it is still in contraction territory. You have seen news about large automakers cutting significant portions of their labor workforce. If that continues, people will spend less in the service sector. It could spread across the euro zone. One thing i will point out, Job Vacancies in germany have started declining in a year on year basis. You have seen Job Vacancies go down before you see firings go down. Tom this is something off the american radar. Ago,is from three months the manufacturing our guests were talking about. Backis unprecedented going to 20002001. Is the lead, regress or china or European Growth . What turns the manufacturing around . Mike i think domestic demand in the euro zone. It is going to have to come from return in china. Potential pick up in china was some of the data but on the other hand other data points remain weak. At antinues to weaken significant rate. We are seeing forward loading of demand in anticipation of potential tariffs that could come into play in december. For me, we need evidence this is not a temporary pickup but a more sustainable pickup in china. You are not seeing the monetary expansion in china that you had in 201516. That is when you had a credit boom. This time around that is not repeating. It is not as clear cut where you will get the lift from this time around. Tom spending too much money on french wine. Is it in play here . Mike it is one of our views for 2020. We think the eurodollar white 1. 2. Oser to germany story is included as part of the story would be the external factors. China toov potentially land a helping hand. Related to av switch in the german car industry. Other supply constraints have been plaguing the industry for the last 18 months. Some with a more constructive view. We also think the German Government seems rather unwilling to engage in more fiscal spending. The Italian Government seems more than willing to do that. Be German Government would willing to tolerate that down the road. The u. S. Economy will recover. Ecb tos a need for the do more. There is a different look at the u. S. From here is a trade war could help propel the economy. Ofare also conscious potential risks ahead of the u. S. President ial elections. We have the primaries in february and march. If indeed, senator warren does resume her lead in the democratic field, that could spell out trouble for the dollar down the road. Groundu covered a lot of there. What you are saying about europe is the relative outperformance against the United States next year, your reason for the euro going up is the story . Very long dollar, very short euro. Investors because worry about the president ial elections. Try to predict 2020 at this point looks difficult. Really difficult. People are starting to get excited about the idea of data stabilization next year. Can even get to that point . Mike i think it is too early. In three to six months time, we will know the leading economic indicators. They will either reaccelerate from here and in case we consigned the all clear. Government bonds around the world should go higher and we would expect the euro to do better. Or, if the data continues to decelerate the pace it has been at the last 12 months, this slowdown will become something more significant. It is difficult to call right now. The market is of the belief we will reaccelerate and i think it is too early. Guy these guys will stick around. What are we watching today . It is black friday. It is the traditional start of the Holiday Shopping season in the United States. We will also look at gdp numbers. Showata is expected to growth slowing for a six straight quarter. Guy i am guy johnson in london. Tom keene is in new york. Less than two weeks ago until the general election. Boris johnson on radio said the u. K. Is working on about a dozen trade deals, ready for the u. K. Departure from the e. U. Bloombergs brexit editor joins us in london. What does this tell us about the tactics in the last two weeks. He is set to focus on avoiding complacency in his campaign. We had a poll that showed johnson could win a 68 seat majority. He is trying to bring the campaign back to dominance. Poll thisen and the will be a key thing that influences voter behavior. Guy the british love the nhs. Trump will be arriving next week. How on message will he be this time around . This is the big risk for the tory campaign. One of the secondary issues in the campaign but it is a big one. In any future trade deal if the u. K. Tries to strike the u. S. , the big issue is how much the nhs figures in that. Does that mean the nhs needs to open up his purchasing to u. S. Competition . Do the price of drugs go up . They say it wont be on the table in any trade talks. Fors been a strong line labour. Does he go off message and Start Talking about nhs or contradicting what the tories have been saying . For them, silence on Donald Trumps part. Tom if Prime Minister johnson wins the general election, i dont think he would have that much influence on domestic politics. Why does the president of the United States influence United Kingdom domestic politics . Ani think it is very much imbalance relationship. A much. President is more substantial political figure and trump brings the whole circus with them. The issue makes a huge difference. This is on the nhs. It is a key domestic issue. It is highly unusual for a foreign leader to talk about it or to weigh in on it. This is a domestic issue rather than an international one. It is that much more sensitive for the tories, as well. Guy we will leave it there. Areick look at where we with the cable rate. A little soft, not down by much. We are down near. 2 . The eurosterling rate continues to hold around the spot 85 level. That is a big line in the sand. This is bloomberg. Tom bloomberg surveillance, good morning, guy johnson in for france in the. Guess what, it will probably be slower today, we move forward with views to 2020. The immediacy of where we are now. A general election and the United Kingdom. Mike bell is with us. Opportunity with any given election . We think that particular election is offering an opportunity that tory could win a majority. In this respect, we are highlighting that in our view the pound is not down at current levels. Be basedov it could on the outcome. E are still bullish it remains to be seen if the strength could be sustained in coming quarters given how weak the economy has been. Ahead of the election, we believe the risks for the currency are on the upside. Tom guy johnson, i want you to pick it up. I find this extraordinary. Tradeweighted sterling back to 1992, the major low here, the boon in sterling, everything good, a horrific crisis. Notice, we are against a breakout trend. You wonder if that is the story of 2021. Guy that comes back to the point when it comes to eurosterling right now sitting on the 85 level. That has been a big line in the sand for all sterling. If the euro goes down, it will be interesting to see. The data are going to be critical and figuring out what the u. K. Economy will do. Mike bell, the u. K. Consumer looks like it is rolling over. There will still be trade uncertainty, why should sterling outperform next year . Mike it is not clear to me that it does. The market must be pricing broadly which is about a 70 majority. Not higher on a conservative majority getting brexit done . Johnsonit deal boris were put through is a hard brexit which leaves the majority outside of the customs union. It is not clear to be that in a conservative majority the sterling would go higher. The other scenario, if you end up with a labour Coalition Government, on the plus side you might get a referendum so that might be sterling. But there would be a referendum not just on brexit but on scotland, as well. Guy if you are positive about the u. K. , is sterling the right way to play it . Biggestangget b the for my buck where do the biggest bang for my buck if i am positive . Personally, i think there is a risk for the trade. Up,ou think it will pick you can go there. Tom this is a conversation we want to have all across this friday and ed bloomberg news, as well. To people with the balloons during the macys parade. Will black friday work for macys . This is bloomberg. Guy i am guy johnson in london, tom keene in new york. Friday. Is a good right now, a news briefing. Viviana donald trump making a surprise visit to troops fighting the u. S. s longest running water, having dinner h soldiers in afghanistan running war, having dinner with soldiers in afghanistan and meeting with the president. North korea may be testing its relationship with President Trump, kim jongun firing two short range missiles. It may be planning bigger moves unless the u. S. Offers concessions this year. In hong kong, police ended their nearly two weeks siege of a college campus. They turned up fairly arrived thousand gasoline bombs and devices. Losive saudi arabia signaling it has had enough of opec and its allies cheating on quotas, the saudis cutting their own output more than agreed to make up for overproduction. The Saudi Oil Minister will indicate those days are over. Iraq and russia are seen as the biggest cheaters. 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. Tom this is not chart of the year. Chart of the year is on the trade war and we will repeat it. This is a chart of half a century, a less consuming america. In q2 stephen roach. Roach,k you to stephen back to the time of eisenhower and the three big rooms of consumption, up to 2000, and a lower level of consumption. It is extraordinary on this black friday how we have changed. Us, michael bell and valentin marinov. It is a massively strategically changed United States. How does that fold over to the Global Economy if it is a lesser American Consumer . Reason part of the consumption growth has been held back is because it is only recently that we have seen wage growth pickup. Main street wasnt benefiting in the way the stock market was, whereas now you see wage growth picked up. The fed tracker about 3 year on year. I could spill across into higher sales growth and consumption. When you look at the present situation in a Consumer Confidence survey, year on year, that has started to decline, which you typically see before slowdown. On the plus side, rising wage downside, an the decline in Consumer Confidence. Is all about relative strength and we see that demonstrated through the dollar and the Foreign Exchange market. That structural slowdown in american consumption, do you see that worldwide or is it a one to america . Valentin if you look at the more aggregate data, we see the consumer transitioning for more export driven growth to more domestic demand driven growth. It is marv a natural course of events, more than anything else more of a natural course of events, more than anything else, and more worrisome for the market is the fact that there is a lot of polls that the u. S. Or the euro zone will be the Silver Lining that will help the Global Economy rebound and potentially grow at a healthier pace next year. Provided that the role of the consumer as a whole may not be as great as we thought, overall may dampen those expectations. In terms of overall outlook for the u. S. , one of the biggest contributors to the consumer spending, however underwhelming in a historic context, was the fiscal stimulus from President Trump. That is unlikely to be repeated anytime soon, so we think the consumer contribution to u. S. Growth, global growth, will continue to wane going into 2020. Me ask a similar question to one i asked earlier. What is the strike price on the fed put . Should i look at claims or another number . Fed, havingk the delivered the insurance cuts they have now, the path of them cutting further is quite high. If it starts to spill into the labor markets and you saw payrolls up a couple hundred thousand, the fed would be cutting. Laterically, it is too because of payroll growth is starting to decline, it suggests the economy is starting to rollover. Will probably not deliver more than one rate cut in by the time that is coming, he worry about Consumer Confidence and the potential spillover. It is all about the labor market. And mike bell of jp Morgan Valentin marinov of credit at a cruel dutch credit agricole. Credit agricole. Daimler looking to cut jobs by 2022 on the back of the numbers this week. We are going to continue to see job cuts coming through from the german auto sector. Migration from the Combustion Engine to electric, the structural shift that germany will have to go through. It looks like it will be painful. You are seeing it first in europe and in the electrical category. This is more than a continental statistic on dime are, it is the engineering and technology. Guy johnson follows. We will come back and speak of this news of daimler, fear jobs. Fewer jobs people, this has been truly inspiring. Guy live pictures coming to us from the e. U. , from brussels, where we are seeing this handover take place from the Outgoing Council president donald tusk handing over to his successor, a huge handover in power right now as we go from the old commission to the new commission. Handing thejuncker keys over to ursula von der leyen, a significant moment in time. Waysclaude juncker in some has been at all the pivotal moments over the last few years, retiring today in brussels. Greece but lost the u. K. Maria tadeo in brussels looking back at what we had and what we will get next. Walk us through the significance of this, because it is a huge shift in power. Maria that is right. It is the end of the Juncker Commission and this man has done every single possible job you can think of. If you look back at the legacy and this is probably something Jean Claude Juncker will mention when he speaks this is the fact that this was a commission hit by one crisis after another. Crisis, thee euro migration crisis, and brexit, which was such a shock to the system. When you speak to people around Jean Claude Juncker, they will tell you when you look back at those five years kate is very yearsnging euros five it is very challenging, but the euro is still here and greece is still here. Tom the farmer president of belgian former president of belgian is taking over. Is this a generational shop in strasburg . Shift in strasburg . It is. A you have the biggest jobs going to women, and younger people taking over. That is because the commission has set the number one priority to tackle issues that must resonate with the average european voter. They wanted institutions that look are similar to the people and that is why she wants to focus so much on Climate Change. That resonates with europeans. Tom thank you for that interview that we saw a few days ago. Michael bell with us, valentin marinov. This is a question that has been through surveillance for the last number of months, the general shift generational shift. How is germany doing . Valentin it is trying to cope with that, but germany may be among the laggards. We have chancellor merkel with us for 14 years now. Hopefully she will be with us for 15 or more. Cause case that the calls for change are growing louder. We have the spd leadership vote in germany tomorrow that may current chancellor and later of the spd losing his job. Leader of the spd losing his job there is push for that generational change, fresh faces to take over. It is the case that in germany, they are still trying to find the answer of how to implement that in practice. Is net result of that talking to clients in germany, the overall impression is a callsctional management outside of germany for fiscal stimulus are growing louder and the government is less willing to follow suit. More of the same may be in the cards for germany. Tom this is a question i have asked too many times. Daimler layoffs, i believe it was saudi the other day rightsizing in automobiles. Is this the first signs of emaar Anglo American german manufacturing system where the character of dual boards changes more to what we see in london and new york . Mike i am not sure on that point. You have two large Car Manufacturers announcing job cuts in the last couple of weeks. With the employment component as weak as it is, that must be because for some caution. His job cuts could spill more into Consumer Confidence. The German Economy is struggling to can dutch deliver deliver more than. 1 this month. The job cuts you are starting to see come through. Guy do you have a german election in your calculus next year . Mike it is not a base case, but its hard to call. With all these politics, trying to make a big bet it guy a coalition, that is what we are heading for next year. We will find out whether the chancellor has managed to get a grip on the situation and to sustain the coalition. If the other pair win, it is likely the grand coalition breaks apart and we get a german election. Is that something that as we look into 2020, germany turns out to be a source of political turbulence . Mike an election is a possibility. You cant call these things. Should we try to make Investment Decisions around these things . It is just focused on the data. The data in germany is telling you things are getting worse at a less quick pace. I want to see them Getting Better before i am more confident. Tom mike bell and valentin marinov, greatly appreciated. We will continue with the discussion of the Global Economy and turn tor it a black friday that is not much of a friday. This is bloomberg. Tom good morning, everyone, thrilled you are with us this morning. Markets,ay about the and we can do that with michael bell of j. P. Morgan asset management. I look at the equity call and what i see is a huge percentage of retail and institutional who havent done 25 per year. Our surveillance question is simple how do you catch up at these values . Mike the difficulty is that this year, the equity market went higher almost entirely on value expansion. The Earnings Growth for the u. S. Has been pretty much flat outside of the u. S. Earnings contracting, and even for midand Smallcap Companies you see a contraction in Earnings Growth. We will need to see earnings pickup which requires a turnaround in the Global Economy. It could come from a rollback in tariffs, but absent a rollback in tariffs, it is not obvious you will see a meaningful acceleration in Earnings Growth, given that the pressure on margins has been coming from higher wages and week Bank Productivity growth. Weak productivity growth. Tom the idea of dividend growth, share buyback, and you get the single digit slot in on january 1 of where you are going versus the risk of a 10 correction or 18 bear market or once every x years 35 . How do you weigh the idea of decent, equity return versus the shock of those three negative scenarios . Mike given the strong returns this year, there is an asymmetry next year. Growthpositive scenario, accelerates and equities move areer but equity values capped by the expansions this year. Scenario,nside equities struggle and you could see a selloff that would be more than the potential upside. There is a relatively unattractive asymmetry to the outlook, and it keeps us neutral in equities and within equities, what the focus on some of the stocks we think would fall less if the data continues to deteriorate, cheaper stocks over the expensive growth stocks. Year is expansion this driven by Monetary Policy, lower yields. If we get a downturn next year, would fed rate cuts offset that downturn in terms of where equities go . Which is the more dominant factor . Ighting thengger e 50 basis points of cuts . From zero s p Earnings Growth to negative, that leaves the job cuts and we end up in a negative and a downturn, that will outweigh the additional rate cuts from the fed. The discount rate we are seeing at the moment boosting equities higher, that effectively dominated by weaker Earnings Growth if the weak earnings lead to job cuts. Thank you very much guy thank you very much indeed. Lets get a Bloomberg Business flash. Viviana h m testing a clothing rental service, now only available in the home market of sweden. For 37 a week, Banana Republic being offered offering similar deals. Hong Kong Airlines is delaying salaries, saying the demonstrations have severely affected it. Staff willcrews and get their wages on time. Sports, arsenal parting ways with saying the sports were not at their required level. Last night in the league, they lost to frankfurt. That is your Bloomberg Business flash. Guy another one bites the dust. It is difficult to see where arsenal will go next, trying to figure out what this club wants to be. They have had him for about 18 months after a hugely extended period. Their performances are just not there. Coach, arsenal with a splash early in the season, i enjoy watching them and the seven minutes of premier League Soccer i had to watch to keep jon ferro happy. You wonder which team is next, man u not doing that much better in the fixtures as arsenal. 101. Taking ferro we are going to do another hour without jon ferro. This is bloomberg. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. You can share 1, 3, or 10 gigs of data between lines, mix in lines of unlimited, and switch it up at any time. All with millions of secure wifi hotspots and the best lte everywhere else. Its a different kind of Wireless Network, designed to save you money. Switch and save up to 400 a year. And now get 250 off google pixel 4 during Xfinity Mobile beyond black friday. Thats simple. Easy. Awesome. Click, call or visit a store today. This morning, life and near, german in europe, german unemployment dropped. Schuurs signs of life for the United Kingdom. Subdued trading worldwide, guy johnson nodding off. What to do with all of that cash. Consider high yields and lowered stock prices. Over the river and through the woods, the president goes from joint base andrews to kabul. We say good morning to you on a black friday, guy johnson in london, francine no doubt shopping at suffragists. With j. P. Morgan and he underscores the lift to the market we saw in data. Guy the german data are better, but do we need them to get worse . The key number out of europe is german unemployment. In order for fiscal policy to be delivered out of berlin, that number needs to get significantly worse and there is some evidence that will happen. Daimler cutting jobs, and audi also. The Manufacturing Sector is hurting, trying to move to electric. That will require fewer jobs. The german unemployment number is pivotal. Tom black friday here in america. Joe feldman scheduled to be with us for an important look at retail in consumer america. It may be black friday, but we have to circle back around on thanksgiving day surprises from President Trump, who flew to afghanistan to have dinner with u. S. Troops and met with the president. He said peace talks with the taliban have resumed, pushing them to a ceasefire. Willstion for you how china hit back at the u. S. Over hong kong . The Foreign Ministry giving another warning beijing is unhappy donald trump signed bills tracking the protesters, saying it could lead to delays in the trade deals. China has threatened the u. S. But not much has happened. In the u. K. , conservative Party Members are worried President Trump could wreck Boris Johnsons chance for elections. Jeremy corbyn argues they will come up with a freetrade deal that could wreck the u. K. s national Health Service. It is maker break time for the u. S. s retailers, black friday kicking off the traditional Holiday Shopping season and for macys and calls, one third of the annual revenue is captured in the fourth quarter. Comparable store retail sales rising 1. 4 . 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. Tom equities, bonds, currencies, commodities, slow wednesday in america and even slower friday. Truncated trading. Negative seven, no idea what that means. Euro with a 1. 09. The vix with an 11 handle. That close on thursday, 20 8000, 164. 28, 164. Bank cannot steven arons with a definitive article on mr. Saving, must read on all for all on global wall street. Down to tense of 1 . 1 . 10ths of volume was spectacularly low today, low yesterday. We are down by 40 . The hang seng was soft overnight. No one can put their finger on why. 2 10thsd softer, down of 1 . A mild german bid. Tom there are all sorts of traditions to thanksgiving. The Detroit Lions always need to be ahead in the score with the first thanksgiving game and they go on to lose, lost to the bears yesterday. The other one is maureen dowd lets her brother kevin right the thanksgiving day xers thanksgiving day essay. Kevin supports the president of the United States. You go through the alternative, most of all i support him from saving the Supreme Court from hillary clinton. If the president is as bad as democrats say, let the voters impeach him. The democrats have never recovered from the last election when they nominated the worse candidate in political history and lost to a political novice. Thanksgiving,he Jack Fitzpatrick joins us today with bloomberg government. That encapsulates a large part of america. , notis not a minority view 15 or 18 or 23 , a good part of america agrees. Jack it is generally thought that the economy is a huge driver for popularity for any president in a make or break issue, but with trump, something he campaigned on and that a lot of neoconservatives who might have otherwise been uncomfortable with him touted was what he could do for the judiciary, and especially for southern conservatives who are conservative on social issues. What you have done with the Supreme Court and courts across country has been really a big thing. Tom you are expert on the shades of gray of each party in congress. How are the moderate democrats doing in the house of representatives with recent backtoback collection victories . Victories, their moderate democrats are obviously feeling good about how the polls are looking, although there is a lot of pressure on the most moderate democrats with impeachment and a likely vote on the articles of impeachment around the corner likely in the next month. People like Jeff Van Drew from southern new jersey have been skeptical about an impeachment vote. There are good signs for democrats in terms of the election returns and what they are seeing in polling, but there until there is clarity on impeachment, they might be breaking a sweat on that issue. Guy guy in london. You talk about the economy and where the president is. If the u. S. Economy downshifts something, how will that translate into the president s popularity . Jack a lot of the polls show trump is buoyed by the success of the economy, and he is pushing for big numbers, 3 growth, and trying to tout the Congressional Republican tax bill. That may not be the only Thing Holding him up with republican voters. He is most popular in polls with voters who say security is there most important issue. That is not the only thing he will be campaigning on, but the economy is the traditional driver of popularity for a president , as well as the ,udiciary and Foreign Policy with him making the trip to afghanistan. Guy lets talk about Foreign Policy. What message will he deliver to the nato summit when it comes to that security message . We are trying to figure out what he will say. What do you think he will deliver in the u. K. . Jack one calling card for trump when it comes to nato is unpredictability. Maybe we have seen an attempt to go along with a more predictable route that is popular with neoconservatives in america, going to afghanistan with someone like john barrasso. A prediction of how it is going to go next week would be pretty tough to say. The question with trump typically is does he shoot from the hip and do you see something on twitter that is really unexpected, or does he follow the playbook republicans want him to follow . Fitzpatrick, greatly appreciated this morning. We are going to dive into the view forward. Rupkeypher rupp key can do that. Chris rupkey linking rates and the economy. This is bloomberg. You are watching bloomberg surveillance. Mercedesbenz parent daimler is set to cut thousands of jobs worldwide to revise profit margins. Heavy investments in electric vehicles have squeezed them. Bmw and volkswagen have mapped out similar cuts. Morgan stanley traders ousted after hiding losses of 4 million. They are accused of mismarking securities to conceal the losses linked to emergingmarket currencies. Arey, shares of okado surging. They agreed to license their to a japanese country. Robots will fill customer orders for delivery. That is your Bloomberg Business flash. Guy i want to bring you back to news, tech data is currently under offer from apollo. The private equity Group Bidding for the business, raising its offer yesterday to 45 a share. We were not even trading at that level premarket. Cnbc is reporting apollo had to raise it because of a competing offer. That competing offer came from Berkshire Hathaway. The language i am seeing seems to suggest that work sure hathaway was the competing suitor Berkshire Hathaway was the competing suitor. It sounds like it is in the past tense. Tom i 100 agree with that mystery. I would say it is a tech data website, the scrolling shows the acquisition in that top banner. It says to be acquired by Apollo Global at 130 per share, but we dont know if berkshire will come back and try to outdo that. A little bit of excitement on a friday. On premarket shares, the market votes. On a black friday, this is odd. I guess that is what you do in private equity, you go out and find something to buy. Christopher rupkey is with us. We are thrilled he can give us a view forward. What is the state of the consumer now . I dont think i have ever seen an end of the season was such a disparity of views. Do we know how the consumer is doing . Chris it has been a soft patch for september, october, and most of the retailers are hoping for pretty good november, december like we see every year. Department store sales always go up every november and december. Tom do you do that with nominal gdp . That component plus inflation is pretty soggy now. Do you have the notion it improves in 2020 . Chris do not forget what happened the comparison should be easy. Last december, we had the federal government shutdown, s p 500 down 20 . It was a disaster for retail last december. This year, they should be pretty firm. When you look throughout the year as an economist looking at monthly of data, average retail sales have been running about 55 billion through october each month, and november, 65 billion 75 billion december. It should be a pretty good year. You canis interesting take a look at what the data are telling us about the consumer. The Current Conditions data looks ok, but if you look at the ford component, it is weakening significantly forward component, it is weakening significantly. Chris some people like the expectations data as opposed to Current Conditions. Realistically, if you look at the Michigan Survey sentiment, it has come back. We felt earlier in august when we had fell earlier in august when we had that manufacturing recession scare. The consumer attitudes, despite the expectations, uncertainty, i think the consumer feels pretty good. There wages are growing 3 3 andages are growing theres almost 2 million jobs created each year. Consumption overall should be a key driver for the economy the next two months, november, december, and 2020. Guy if you take a look at when we get the fed back in the game, what would get the fed back in the game, it is presumably the consumer. What would get the fed off the fence . Chris unemployment claims came back down this week so we are off of a recession scare, but you cannot turn your back on it because there are headwinds, and the expansion has gone past 10 years, a new record. Would havet claims to go quickly, 6, 7 weeks, 25,000 per week. It was near 30,000 a week ago before coming back down, so i 5, 6, 7y quickly over weeks it will play out. Guy chris rupkey staying with us. A quick look at where the pound is, the cable rate softening up. Ahead of Boris Johnsons speaking michael gove about his relationship with the United States. Close relationships with the United States at every level. What we dont see as traditionally as loving allies and friends, is we get involved in each others election campaigns. That will forever be a stain guy michael gove alongside Boris Johnson, giving a joint press conference in westminster. We will see what these two fren emies have to say about what the election will deliver. I suspect complacency will be fairly high in terms of the language they will use, we dont want to be too complacent and we tend cannot take for granted the majority. Bloomberg European Markets open anchor and brexit expert. Brexit watcher. Guy this is it, this is the election the tories have to avoid losing. Messagee you keep the into december 12, can they do that . The polls over the last couple of days giving increasingly a lead to the tory party. We saw the detailed poll giving them the 68 seat majority. It is just a poll. We still have 10 days. The decision of the conservative party not to appeal appear on certain platforms, that is the controversy right now. Boris johnson not appearing for interrogation by the media as much as some of the other leaders. A brexitrexit done and deal, no doubt we will hear about that. Not messing it up and losing the lead and allowing complacency to set in. Guy next week will be an enormous week. Deal that could be struck is with the United States. Risks. Sident comes with anna he is not a president who has held back his comments on u. K. Politics. Boris johnson this morning said it is not typical for u. K. And u. S. Leaders to weigh in on each others political agenda, but he has done it before. He has called Boris Johnson fantastic and said Jeremy Corbyn would be awful for the u. K. When he talks about the nhs and access for u. S. Farmers, those could open up a tagline for the labour party. On thebalanced essay challenges of labor and mr. Is borisow much johnson benefiting from the phenomenon of never corbyn . Anna there are those who believe that and another phenomenon, a reshaping of u. K. Politics away from left and right and to brexit or no brexit. We are adding to the vulnerabilities of the parties. We talked about the red war in the north of england, constituencies who have suffered a postindustrial decline where labor has been very strong, and people in those constituencies would not have thought of voting conservative. In the latest data, we are seeing them toy with the idea of voting conservative and the red war in the north a big part of the conversation. Guy i want to take you back to the daimler story. We are getting confirmation of the number of job cuts we are bigly to see, 10,000, a number for germany and eastern europe. Surveillance, good morning, as washington, d. C. Welcomes the president back. Weove that photograph, and should say happy to david rubenstein. His interviews have been a big part of bloomberg this year, and his true support to the nation, the library of congress settled behind the capital is noted. We say good morning on a friday, a very different friday to say on. Least, with much going right now, lets get to our first word news. Viviana President Donald Trump making a surprise visit to troops fighting the u. S. s longest running water, having dinner with troops in war,nistan running having dinner with troops in afghanistan and meeting with the president , trying to get the taliban to agree to a ceasefire. Fired twons regime short range holistic missiles and may plan bigger moves unless the u. S. Offers concessions. North korea has threatened to walk away from nuclear talks. In hong kong, police ended their nearly two weeks each of a college campus, turning up bombs and0 gasoline other explosive devices. Saudi arabia signaling it has had enough of opec and its allies cheating on quotas. The saudis cutting their own output more than agreed to make up for overproduction. The new oil minister will use the opec meeting to indicate those days are over. Iraq and russia are seen as the biggest cheaters. 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. Hurtado. Ana this is bloomberg. Tom it is the most extraordinary black friday. It has changed over the the years and with a vengeance the last few years with the assent of amazon. Amazon. T of bang5 move from the peak in the 70s from the peak in the 1970s. Target doing better than good. Amazon with a little bit of an off year, and a raging debate about where amazon is in 36 months given their next day delivery. How to sum all of this up . Feldman. Ith joe his real work real world experience with saks fifth avenue. On the next monday, what statistic will you be looking for, from the data of this friday into the weekend . Joe we will be trying to look for as much data as we can about what is going on online. We can see the stores and we will get traffic information. I would bet you will hear people say it does not seem as busy as last year, but it is hard to know what was going on online because that is the data we want to see. We believe online is driving this, not just amazon. Shift toave seen the successful brickandmortar execution of online. What is the distinctive feature they do to compete with amazon . Joe the best thing the physical stores do is quick delivery in terms of by online, pick up instore or ship from store. The way they leverage their footprint to get the product to the customer even quicker. Even last night, i was in target and walmart and best by. B uy. I would hear people doing by online and pick up instore buy online and pick up instore. Tom what does that do to margins . What does the next day delivery cost or give up in terms of margins . Joe next day is quite expensive. Delivery to someones home is the most expensive. We have heard from retailers including target that when you do buy online and pick up instore, it can save 90 of the cost it takes to deliver. That is significant savings and that is where the buy online, pick up instore has become vital for the retailers. Guy let me ask you a european perspective question on what is happening in the United States. We are starting to see an environmental pushback against these kinds of events. France has not black friday but block friday. There is a sense the consumption story is bad for the environment, consumer shaming. Is there any evidence of that in the United States . Joe we are not seeing evidence of that in the u. S. Thatve seen the hours stores are open on thanksgiving and black friday morning become more realistic and more friendly to the associates that work in the stores. We dont see 5 00 a. M. Openings today. We are seeing 7 00, 8 00 a. M. Openings. We are not seeing anything on the environmental side in that same way. People in the u. S. Love retail. Tom joe feldman, thank you so much. This is bloomberg surveillance. Much more to speak of. Rupkey. Is christopher there is the yearoveryear variance of successful execution. Tell me about consumption. America for 68 in years. Chris roughly two thirds. It is remarkable how fast consumption was in the 2001 recession. It never dipped. Consumers never stopped spending, so it is something that helps lift the tide of the boats in the economy. Tom the Interest Rate market linked to the economy, i have to bring up a log chart. Here is the great volker decline from the 1970s. We have gone below the longterm regression, testing recent lows. Fromis a quarterly view 60,000 feet chart. Are we going to sustain this great disinflation, or do you finally see a shift to higher yields . We waited and waited. Chris it is hard to know what is going on. The bond market seems to have taken up the belief of the Federal Reserve that the baby boom generation savings is driving down yields. Japanese yields are negative and that is driving money to the u. S. Everything is pushing down treasury yields, but it is more Federal Reserve policy repressing those yields. The bond market watches the fed, will price what the fed is doing. Whatever the fed says, they will do, so if we were to go into a recession, god forbid, and the fed cuts rates to zero, treasuries will come down to three quarters or 1 . It is really the fed in the drivers seat. The fed should put rates at normal and get out of the picture, like the old milton freeman, keep pumping out the same amount of money supply. Do not try to oversteer the economy, keep rates normal, and get out of the way. That would be my preference. I am afraid fed policy will try to lead 10 year treasuries lower if the economy weakens in 2020. Guy what do you make of this brainerd idea about curve control . Chris bernanke he brought that up several years ago. Bernanke brought that up several years ago. That would come into play if the treasury yields were not doing what the fed wanted, were not going down. They dont have to set a target. If they push the fed funds rate down for policy reasons, to 1 from 1. 75 now, these yields will come down anyway. There is no guesswork, so i dont know that they need to go out and fix those yields of shortterm and mediumterm rates. I dont know if that is necessary. That was a shot that concerned a lot of bond traders because they want to see volatility and do not want the fed to set rates. Guy chris rupkey, staying with us. A reminder that you can watch what is happening in the u. K. In detail. You have Boris Johnson, the a pressnister, giving conference alongside mr. Gove. It seems in the polls that it is the tory partys election to lose, but a lot can happen in a week and politics. This is bloomberg. Viviana you are watching bloomberg surveillance. H m is testing a clothing renting service only available in the home market of sweden. Customers can rent garments for 37 a week. The fashion industry is being criticized for waste and pollution. Protests in hong kong are dragging down the thirdlargest airline, hong Kong Airlines delaying salaries. Carriers says the protests have severely affected it. Only the cabin crew and staff will get their wages on time. We will talk about the english soccer club arsenal parting ways with their head coach, saying the performance was not at the required level. In the last seven matches, arsenal has not won. Last night they lost to frankfurt. Tom it is that time of year, not breaking news, but nevertheless it is a passing. Dennis gartman will cease his daily publication of his letter. He is a good friend. What is always original about him as a penny out of for the eet as he publishes pina pinata for the street is he publishes on the back of his letter. He will be severely missed. He will continue to stay and do interviews and we hope to catch up with him in a bit. Right now, we catch up with christopher rupkey, it has got to be a single best chart. There is a correction in yellow and a med a bear market in december. It has been fear, fear, and all of the red dots are, i cannot be in the market. We have forgotten in the vector up of a correction, the bear market, occasional down 35 . What does that signal about the linkage of the economy into the stock market . Chris the stock market is the most leading of leading indicators of the economy. We have had trade headwinds and the s p 500 is up 25 for the year. How worried can investors be about the Economic Outlook with its standing gains like that outstanding gains like that . Tom i got 27 so far this year on the dow. The twoyear is 9. 6 . That is not a single digit world. Chris all without earnings. Trailingis 12 month and the s p 500, there is no earnings this year. Can we go up next year as well without any earnings . Ratio isthink that pe that high, do you . Tom you want my opinion . Chris should i stay in the market . Tom i am in triple leverage cash flow. We will continue with christopher rupkey. We will be on Bloomberg Radio throughout the morning. Tech data mention here with a 16 billion offer, apollo out at 145 per share. That reported against Berkshire Hathaway. This is bloomberg. I am guy johnson in london, tom keene heading over to anchor the radio. Francine lacqua has the day off. We got news worth debating, the debate around fiscal stimulus in germany. The ecb is calling for the government to take action and germany is ignoring these calls. Angela merkels Junior Coalition partner of the spd is set to choose a new leader for saturday , spelling disaster for the grand coalition in germany. Story. Tart with the spd riske grand coalition at as a result of this vote saturday . I think one can say the situation is somewhat serious. To spd has never wanted enter into this grand coalition. They said a coalition with merkel is bringing them down and the support of their membership and voters, and they have seen that to go down. There polls have gone down to a 60 and they are worried about their existence. A large block of this party wants to get out of this coalition and it is unclear how this will turn out. Walk me through how this process works over the weekend. We have three pairs facing off against each other, one led by the currents finance minister. That pairparties in against the idea of staining the grand coalition . Birgit they havent come out directly and said we will raise we will leave. They will stay in the grand coalition only under conditions that they will have protection. The conditions are tough, basically red lines including a minimum wage of 12 euros and giving up the balanced budget. Will not gothe cdu down this road. They have done a lot to keep the spd in and the government as far to the left, to our liking, and we are not willing to give more concessions. Guy if there were to be an election next year, what does current polling suggest germany would look like post that election . Birgit the biggest likelihood is a cdu government. It is unclear how it will turn out. Outs clear the spd will be and the aoc will not be in be inment asd will not government because there is no coalition partner. Everybody from all part parties across the board are greenring free cdu government perhaps with the liberals. Guy thank you, joining us from berlin. U. S. Black friday, the Holiday Shopping season, and with thanksgiving falling later the system is getting a squeeze. Retailers have less time. What will they do . It will not really affect them. American consumers are expecting to shell out more than ever this year, around 1000. It seems like the season keeps getting longer rather than shorter, so where are the dollars going . Department stores and Discount Stores are popular, 50 percent of consumers expected to make purchases in the store. 56 of consumers will go digital. Many consumers will get their serviceson with web and mobile Services Like facebook, instagram, pinterest. I am a bit of an outlier because i like to physically go into the store and i do not want to shop online. Guy that is an anomaly. Little of be seen a her shopping over the years. Maybe it is worth doing. We will see what is coming up when it comes to the holiday season, where the consumer is going into 2020. Thank you very much. India will release thirdquarter gdp numbers. Keep an eye on that. Datae expecting to see the continue to slow for a sixth straight quarter. The german budget, we did mention that. That story as well. We are keeping and i on what is happening in the United Kingdom on what is happening in the United Kingdom, Boris Johnson and michael gove giving a press conference. We have just a few days to go, but politics is a long time a week is a long time in politics and it will be fascinating to see how the story changes. Lets look at the data, this is how we start the session in the United States and a look in europe. It is incredibly quiet, really light volume. We saw a really negative session overnight in asia, particularly the hang seng. No one can point to why it fell as aggressively as it did, but it led through into the chinese market. Bled through into the chinese market. Volume incredibly light. Have a great day. Myself, guyne and johnson, this is bloomberg. Here, it all starts with a simple. Hello hi how can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone wifi up there . Uhh. Sure, why not . Howd he get out . a camera might figure it out. That was easy glad i could help. At xfinity, were here to make life simple. Easy. Awesome. So come ask, shop, discover at your local xfinity store today. Alix global warning signs. India could see its slowest growth in six years. Crisismerica stays in mode. Europes nongoldilocks scenario. Inflation ekes out again. Ekes out a gain. Daimler slashing jobs. The carmaker will cut thousands of jobs worldwide by the end of 2022. Welcome to bloomberg daybreak on this friday, november 29. Obviously, a really quiet day over the last 24 to 48 hours. We are drifting into the weekend a bit lower on s p futures. You have to imagine theres not going to be a lot of volatility or movement in these markets. Close at 1 00. Bond markets close at 2 00 p. M. Now we want to get todays global exchange. From london to frankfurt to toronto