Transcripts For BLOOMBERG Bloomberg Surveillance 20240713

The latest. Dani definitely a mixed session. The stoxx 600 down. It is a macro heavy trading day between the u. K. Election, Central Bank Decisions and that the tariff deadline, we have traders on the sideline. Expandedy has really for sterling. Cable down about 0. 1 , but still trading at that 1. 31 handle. This is a conservative government priced in. Upside is really limited. We have seen sterling fall after the poll showed the conservatively it cut by about half and the concern is the Hung Parliament that would throw into concern the outcome of brexit. Some strategists have said that sterling may fall as low as 1. 22 if we do get a Hung Parliament. Brent down about 0. 5 tonight. We are seeing brent trade just under 64 a barrel. The aramco ipo hitting the 10 limit with shares surging so far today. Looking at some of the individual movers we have seen in the market. Jd sports is one of the biggest lacquers in the stoxx 600 laggers in the stoxx 600. Its biggest shareholder sold 2. 4 of its shares. See we are trading under that. One of the gainers today, hsbc, trading higher by more than 1 . It has come off some of those gains, but it is a down market. They settled a u. S. Tax probe. The last one over there is o2d cut its deutschland share. Francine dani burger, thank you so much. After the worlds biggest ipo, we speak exclusively to the chief executive of the saudi stock exchange. Lets get straight to new york city with the bloomberg first word news. Top white house trade talk Peter Navarro says extra tariffs will not be imposed. Washington are almost in daily contact. The levelis to reduce of duty payable. U. S. House democrats call for his removal for abuse of power. And for preventing congress from exercising its duty. Resolution accuses him of hurting National Security for personal benefits. The Impeachment Vote has very little chance of passing in the senate. The new president of the European Commission is set to outline targets on Climate Change. Worlds biggest Single Market to become client Carbon Neutral by 2050. Among the proposals, stricter emissions limits for industries, revamped energy taxes, and greener farming. News on the probable death toll from the volcanic eruption in new zealand. It has risen to 14 after six the victim died overnight. Eight more people are missing and are presumed dead. 30 survivors are being treated for severe burns in the hospital. The volcano is still dangerous, police waiting for an improvement in the conditions before they can reach the island. Global news and on air. Powered by more than 2700 journalists and analysts. This is bloomberg. Francine . Francine thank you so much. One stop to keep an eye on his Credit Suisse, having an investor day in london. Addressing shareholders. The swiss bank cutting its main profitability target for this year and next as trade tensions, negative Interest Rates weigh on the outlook. Vector the u. K. Elections. Boris johnsons lead has been cut by half in a hotly anticipated pinion poll released tomorrow ahead of the general election tomorrow. According to the yougov model, the conservative party is on course to win a majority of less than 30. If the research is accurate, it suggests the race is tightening significantly. Here is what our guests have been saying ahead of the election tomorrow. The take away from the polls is that the tories are ahead, but the gap is narrowing. We dont know how much more it will narrow between now and thursday. What we are not entirely certain about his turnout and who will vote. Small chance of a Hung Parliament, but never the lengths a chance. Least that there will not be a Hung Parliament. There will be some majority in favor of some decisionmaking process. There is a lot ahead of us, but a workable majority gives a jolt of confidence to the financial markets, the currency markets, most importantly the private sector in the u. K. The more authority the Prime Minister will have with the bigger majority. I think it is important we do have a clear mandate after this election to get britain moving again. Francine for more on the u. K. Election, we are joined by our government editor. There was this paul that last time was the only one that was right. It has never been tested before. We had it once. How does it differ from the other polls . Paul was actually an update of one done a couple weeks ago. This one goes out to 50,000 people. It crossreferences them against key issues. It produces much more of a comprehensive snapshot of how people are feeling. It is probably the most reliable so far. It was showing a majority of about 60 seats and now it is showing possibly 28. It is narrowing close to election day. Francine is that it for the polls . Tomorrow, we are in the blackout period where we cannot talk about the election. Home any people are undecided . That is the big question. One of the things that is difficult to ascertain is how statese labour swing will move. Boris johnsons goal was to take those voters and bring them over to vote for him simply because they werent going to get brexit under Jeremy Corbyn. Those are the seats we really need to watch tomorrow night when we see the results start to come in. Did he do enough . He was campaigning there yesterday. Has he done enough to bring over . Er austin Mark Francine i was going to ask you about the polls. Boris johnson had a bad day the day before yesterday. Thats true. He had that video of the boy in the hospital in treatment lying on the floor. Jeremy corbyn also had a bad day yesterday. One of the people caught on camera. How much that comes into the polling is unclear, but Boris Johnson only needs a majority of one seat, technically, to get brexit done. Home, but whether it narrows enough to have the result of a Hung Parliament. Francine thank you so much. Our Government Team will be speaking to yougov later this hour. Coming up, we go indepth on saudi aramco. The redhot debut. We are live in riyadh with all of the details. That is coming up next. This is bloomberg. Francine economics, finance, politics, this is bloomberg surveillance. Lets get more on the worlds biggest ipo. Saudi aramco jumped 10 in its debut. The company has a market value of 1. 8 trillion. Lets go to read. Yousef. What were the highlights of the debut today . Periodad a premarket where the price was set ahead of the actual opening of shares that lasted for about 60 minutes, then at 10 30 a. M. Local time, shares started trading. 1. 88 trillion from the base valuation of 1. 7 trillion. That is really a big jump and it gets us closer to one of the one of most controversial topics of the last year. Is or isnt saudi aramco worth 2 trillion . The government has tried very hard to get it in the right direction. Part of that includes just not offering as many shares as originally thought. 1. 5 of the company is being offered. That compares to some of the other heavyweights around the world that are listed like apple 80plusosoft that have percent of the market cap offer. There are still plenty of potential for upside. Option sachs has the that they can exercise in the next 30 days. That is going to be absolutely critical. So much. Thank you joining us to talk more is the executive editor for combined energy and commodities. When you look at saudi aramco, they want that to trillion dollars valuation. Is that how they will measure success . That largely seems to be what they are driving for. Get theple did not allocations they were suspecting. Problem if it is a aoblem is that if you are retail investor, you are going to get a bonus. If you look at the way the market is currently structured, it is pretty much only buyers. We have one more trading day this week. Another will take us to well over the 2 trillion. Francine did they decide to list elsewhere if they hit 2 trillion . I feel it is almost the opposite. They have already done this that went around the world. They have basically found virtually no one that agrees with the valuation. Yes, you can go for a foreign listing, but who is going to buy that kind of loft evaluation . I think this opening trade makes it that much harder to do. Thisine how much does change the opec plus agreement . Saudi has much more at stake. They will probably pressure groups to make sure that oil is in the top. It is alsojust that, going to change radically how they think of themselves. They have already promised all sorts of enormous dividends to investors over the next couple years. They are going to need an enormous cash flow to be able to sustain that. That will be an extra motivating factor. Francine thank you so much. Bloombergs executive editor. The we also spoke earlier about the ipo. Operate and i think thatest today has proven with the number of orders that is expected from aramcos investors, the market has opened smoothly, trades were conducted smoothly. Done all of the requirements before we come out and say we are confident we can deliver and this is what we have proven today. Part of the rationale to this listing was to bring investors into the exchange. What role do you think aramco is going to have now particularly with the index at attracting more Foreign Investment . Asked basically, there are two factors of addressing attracting Foreign Investors. Of the economy of saudi arabia, as well as the attractiveness of the market. So, you have to supply the demands of investors by Good Companies in return. I think aramco today, with the performance of aramco, with the demand of aramco all in the fixed income, i think this is what we aim to do as an exchange, adding more company, more successful good case exchange. To the it will of course help the International Investor, which is something we are focusing on. Talking to more active investors , educating them about the saudi markets. The aramco listing has accelerated it big time. Tadawul that was the ceo speaking about the aramco ipo. Coming up, mixed messages on trade. We will talk about the december 15 deadline for higher tariffs. This is bloomberg. Bloomberg surveillance, im Francine Lacqua in london. Lets get back to the hotly anticipated opinion poll. The race for number 10 has tightened significantly. The yougov paul says the conservative poll says the conservative lead has been slashed by half. 339,ys the tories will win and majority of less than 30. Joining us now is a Political Research manager at yougov who conducted the research. This is the one markets believe more than anyone else. What is the margin of error . It is generally a bit more believed than other polls. The sample size is a lot larger. We interviewed over 100,000 people in the past seven days. Of the things that indicated we were heading toward a Hung Parliament. However, it does have a margin of error, like all other polls. That is really crucial with all the data we put out last night. While the central estimate is a conservative majority of around 28 seats, at this stage, we dont feel like we can rule out a Hung Parliament because of that margin. Francine do you have any indication why the gap narrowed between the labour party and conservatives . Honestly, we dont really have an indication of that. The gap seemed to close over a mix of things with voters moving in different directions. There was not a clear pattern to it. The data does show that the gap did start to close particularly since the weekend, potentially off of the bad did that Boris Johnson did have on monday and therefore that caused a number of conservative seats to move down and we also saw a small increase of tactical voting among remain voters. Francine we are also voting in december, which we have not done since the 1920s. Or you worried about that . How many people are undecided . Turnout is something that polls really struggle with and it is a potential cause of inaccuracy. It is one of those things that we have to hold her hands up and go, we are never going to get past that were know what effect the Winter Weather will have. Our best estimate is the turnout is going to stay roughly the same as it did last time out, that is the kind of number we are working to. Yes, you do have the cold weather, but obviously we have a lot of postal voters in the u. K. Many people have already voted. The other thing to consider is close elections, elections were there seems to be a big difference between the parties, and also elections where we see high levels of turnout. Maybe that will counteract the weather effect. Francine how money people undecided . One in five . Is there a chance they wont vote . We have seen a big drop off of undecided voters in the last week. That are undecided at this stage dont go out to vote. Most voters have made up their mind. There still does to some seem to be a chunk of labor voters who will be interesting to see where they hand up going. Francine when you look at the tactical voting, doesnt make a difference this time around . I think it will probably have more of an effect than ever before. We are talking about motivated remainders. Have the tribal loyalty, but they have quite a lot of loyalty for the referendum. Moreover, when you look at the data, they tend to be the kind of people who are more interested in politics. That is important because one of the barriers to tactical voting has not been just a willingness to do it, but that it takes a lot to go out and find the information you need to do it. The kind of people who would be willing and able to do that, means we are likely to see higher levels of tactical voting in the remain side. Francine is it too early or doesnt not shift that much . We decided last night would be the final day. We did 12 weeks ago and then we did one we did one two weeks ago and then we put it out at 10 00 last night. Francine when you look at the personalities involved, do you think it is more difficult . There are number of things people are voting on. We were discussing it 10 days when you came in. Jeremy corbyn, Boris Johnson. Maybe bigger personalities than the past. Then you have brexit and spending. There is a lot to go at. There is a lot going on and it is a very complicated election to try to understand. It is one reason why i cant give you a good answer about why the gap has closed. We do look at the underlying data that started off the campaign with a big difference between Jeremy Corbyn and boris in terms of popularity. Over the course of the campaign, Boris Johnsons popularity has gone down slightly, where is Jeremy Corbyns has tended to increase. Boris johnson is still more popular, but the gap is smaller than it used to be. Francine what about the lib dems . They have kind of gone nowhere. If anyone has had a bad campaign, it has to be the liberal democrats. They started in this Election Campaign full of optimism in the back of the European Parliament elections. They faced many difficulties. They held the position on remain, but labour party moved into that space saying they wanted a referendum. We have seen that joe swenson has not landed particularly well with the public. Francine thank you so much, chris. Political Research Manager at yougov. In the fed and the European Central bank. This is bloomberg. Boris johnson cut by more than having the u. K. Opinion polls less than 24 hours away. Surge in theshares Worlds Largest ipo. In mixed messages on december chinese officials expect pushback. Trump to Peter Navarro says otherwise. Good morning, good afternoon, good evening, depending on where you are in the world. This is bloomberg surveillance. U. K. Election tomorrow, we will not be talking about the elections. Not about manifestoes and not about the polls. Today we will lets get to first word news in new york city with Viviana Hurtado. Viviana very weak is how President Trump talks about the articles of impeachment delivered against him. House democrats call for his removal for abuse of power and for preventing the u. S. Congress from exercising its duty as a check on the executive. The resolution accuses him of ignoring and hurting National Security for personal benefit. The Impeachment Vote is expected to pass in the house stands very little chance in the senate of doing so. Next week, the successor to nafta is slated for a vote in the house of representatives. This is after unveiling impeachment charges. The pelosi u. S. Mexico candidate deal is seen as a political win for the president as he heads into an election year. Final approval from the senate is not expected until 2020. The new president of the European Commission is outlining targets on Climate Change. By 2015 urszula underlie and wants worlds biggest single neutral. Be industriesmits for with entergy texas and greener farming. Eruption in new zealand eight more people are still missing on the island. 30 debt. Are being treated for severe burns. Global news 24 hours a day, on air and at quicktake on bloomberg, powered by more than 2700 journalists and analysts in im than 120 countries, Viviana Hurtado. This is bloomberg. Francine . Francine thank you so much. We have the iata, the International Air transport its 2019 report industry they are forecasting a cut, so maybe more struggles for the Airline Industry. What i do know is that the International Air transport association chief executive, that interview is coming after 10 00 a. M. Chinese officials are spiking the u. S. To delay the 106 2 billion in new tariffs on sunday. Peter navarro says there are no indications that the extra duties will not be imposed. Beijing and washington are almost in daily contact. We are told that rather than removing tariffs, the focus is we are focusing on the election and we will get onto that in the second. But there are tariffs looming, december 15. Is it the endall and beall for the market . I think arguably the bigger story at the end of this week because most investors appear to have priced in the idea of the trade war between the u. S. And china, with a view to both economies seeing it in their shorter economic interest. Having seen both slow. It is a very rapid rotation prechristmas because that removal of the 15 , and what the chinese are pushing for with existing tariffs essentially doesnt happen. Francine so if there is no rollback, there is no phase one peer can we get a phase one january . Final we are in the stages, but that is undoubtedly in any trade negotiation the hardest. Whether the incentives are aligned, then move following january and into settlement, you start to think about the u. S. A little side first democratic , kicking off against the backdrop of a weak economy. Whether that happens, we will it will to some extent be determined by Economic Data in the u. S. Francine the economy in the u. S. Seems to be ok. Blackrock said Inflation Forecasts are maybe too low to what they are expecting to read we did have export figures, china to the u. S. , thoroughly depressed for november. Simon that was a weak data point. Contrast, pmi provided support for the chinese story. Out of the u. S. Last friday suggested that it was better than most forecasters expect. Ono there is a question mark i think you are right, in the context of all that, it does not suggest that there is pressure on the white house to move in january. Do we know what President Trump wants . Simon know, we dont. Francine do the markets know what President Trump wants . Simon they wish they did. Think they anticipated he wants to bank the hawkish rhetoric, which he has a good reputation for, but also bank the potential economic rebound. We know he follows the s p. We know he follows the stock market. He knows that he will get that boost if he comes to a phase one deal. Markets dont know when it will get to that point. Francine how much pressure does he want to put on the fed to hike rates . If you look at the tariffs, the summer 15, or a phase one deal in 2020 or earlier, does it impact the fed decision . Simon if you start to look at which tariffs are impacted, you can see core price increases of about 2. 5 to 3 , well above the fed target. A very low core inflation there isnt any material ticker at this point higher on inflation that is going to be they still have concerns. There are a number of fomc members saying we are worried pushing they may be back as early as q1 of next year. Francine if we have tariffs or hisffs not removed, europe the biggest loser in all of this . So far we have seen the unintended or perhaps intended consequences, because the euro zone area, the European Union high we see this reinstalling of the supply chain, perhaps the u. S. And china have moved to overall, you are seeing weak industrial demand in europe, which has plateaued but it has inflicted upwards. That is the concern for policymakers, the concern for Christine Lagarde and the fiscal authority. But you are not seeing necessarily the pickup that you are seeing in the u. S. And china data. What are we expecting from her . Economist, the threshold has to be quite big or high to change inflation targets or how we measure inflation. Simon Christine Lagarde gets a bit of a free pass. It is her first press conference. People will be looking for, is there consistency on the ecbs view . She has not come under nearterm thesure, fallout from recent teasing on the back end of the draghi era. I think if she shows a status quo of consistency that will be enough, but going forward, what is her strategy, will she start to provide clues . I suspect she will not, but she will come under a significant amount of pressure in the press conference to try to impact thinking, what kind of success as she is having an European Capital we try to sort of get intoiscal needs that pull core inflation. Francine thank you so much. We will be bringing you special coverage on bloomberg tv as soon as the u. K. Polls are closed. That is tomorrow. The action starts off at 10 00 p. M. Tomorrow night, and this is bloomberg. Francine bloomberg surveillance this is bloomberg surveillance this is bloomberg surveillance. Lets get to the Bloomberg Business flash. Viviana we begin with the Worlds Largest ever ipo, saudi aramco shares rising 10 . It instantly both the stock market in saudi arabia. Saudi aramco is worth 26. 5 billion. Along with three independent directors in a dispute over how to address accounting problem. After anrofit forecast external review found irregularities. Boeing finally reporting the years First Official orders for the 737 max. The plane maker says it has lost 30 service of the hundred aramex the air max. Barclays capital that team analyzed 2. 5 billion trips in new york city. They said the pair could charge more for an operating profit with only a modest impact on volume. Both comedies are currently heavily lossmaking. That is your Bloomberg Business flash. Francine lets get back to the u. K. Ahead of tomorrowss general election. Simon french is still with us. I dont know whether the manifesto, will you get all 3, 4 manifestoes, whether they give us a different picture of a u. K. Climbing in two or three years depending on what brexit negotiates. Is thei think this biggest difference between the two major parties. Since 1983, maybe even before that. They have very different visions, not just on brexit, but certainly the labour party is part of a coalition. They will be looking at a protection of workers from a lower level playing field. There is a much more diversified agenda being posed from the conservatives going forward. On brexit there is certainly a gap, but the domestic gap is even larger. The scale of public spending proposal and compared to the conservatives. Both of them will actually see a pickup in spending, but the scale is much larger under labor. There is concern that those proposals are more ambitious than the u. K. Economy can absorb effectively. Francine i know that the polls donteen steady, and i know whether you trust the polls or whether because the vote is on strong personalities, it is difficult to be certain of anything at this point. Simon it is very difficult because in last nights key polls, with an 100,000 people, the majority of conservatives within those, about 85 seats are within the margin of error. What you are worried about potentially is that there is quite a lot there that could move proposition of a working majority of a workable majority. U. K. Focused equities would be very different than those two, those two 5 to 10 scenarios over a very narrow window. Francine do you have any doubt that the Withdrawal Agreement that we saw from him will go into effect by january 31 . Simon that is a really good question because of course in the last parliament, the working so ty of a dozen or very different than parliament. A small majority, even single digits, will be enough for the Withdrawal Agreement to get through in january. What comes next is they are negotiating a new trade relationship. In that scenario, a larger majority will be in boriss favor because they will have to disappoint some people regarding his vision for the longterm relationship. The larger majority, the more you can pick off a cohort in mps, you can say im sorry this may be your political priority for brexit, but i cannot deliver all things to all people, and therefore you will be the people we will have to sacrifice to get to stage two. Francine the pound rallies on all of the polls until yesterday. What is placed in right now . Simon priced in at the moment is a cautious confidence toward the conservative majority, and therefore if we see that confirmed, we will see more upside because there is a risk to regarding a Hung Parliament in a corbyn led government from the labor side that would be taken away. The 1. 35rade up toward level, but not too much higher. The downside is more significant. If we see a Hung Parliament, anything like a second referendum, second a withdrawal of the open agreement bill, potentially more certainty of the government, bringing back the sector of marconi, being the economic leader, very much like we saw in july 2016. Itwe see that repeated, could potentially trade down below 1. 20. Francine it is unclear do we think that Boris Johnson and his team have someone, a name that they will submit if they win the election . Simon i think so. From what i am hearing, they have a preferred candidate, but that candidate needs to wait for clarity. Before committing to that role. Mucht think there is too concern about the occupancy of the governorship of the bank of england. U. K. , we thinkor internally it is about 20 of the value to where it should be. There is the opportunity. They have been ringing those off the hook for the last six months, saying i like it, on the valuation grounds, but will there be more confidence with politics . There will be a bit more confidence tomorrow evening. In the event of a Hung Parliament, you probably conclude there is going to be another democratic event, another second referendum. The u. K. In 1974 had two genera elections every year. We might have two general elections in very short order. Union,endum on european new labor negotiations, and in scotland, the price of given those potential events, those points i am making around an undervalued market could potentially see flows back in. They will sit on their hands and you will not see that discount close and it indeed may widen in the near term. Francine there are probably a million possibilities at this, but what kind of trade relationships will we end up with if the conservatives win a majority tomorrow . Simon it is good that we have been able to have this conversation the last three, four years during the Brexit Process because i can go back to a statistic of this period, that actually the economic upside of significant divergence from the e. U. Regulatory sphere are fairly limited, and therefore i think as we go through the process, and quite frankly, a new phrase in the free trade hardly even imagined over the next few years it will be in the u. K. s economic interest with the nearest geographical and economic divergence will be fairly limited even in the event of a conservative majority. The most pragmatic legislation i think will be heard in westminster. We started the conversation on trade. A little bit about the fed, lagarde, ecb, the u. K. Election. As we look into 2020, what is your biggest concern . Simon micah biggest concern my biggest concern is that the foret is wholly unprepared the material behind trade tariffs. Auto tariffsabout into europe. A broad attack on those countries is deemed to have weakened their currency, and that being a justification for the u. S. Treasury to enable currency manipulators and justify tariffs. Is that is the way 2020 unfolds, then all the expectations we get will come to naught and investigate investors will have to react aggressively early on. Francine simon french, thank you very much. The International Air transport association chief exec of, alexandre de juniac. This is bloomberg. Usually marks labor significantly down, now is saying we are in the margins of i actually think because they marks labor down, they have a good chance of forming a small labor majority. That was John Mcdonnell speaking to bloomberg ahead of tomorrowss general election. For everyone tomorrow, we will not talk about election, the fed, and we certainly will not talk about the polls. Oddsey gundlach sees the of recession 2020 falling. Joining us to discuss all of this is bloombergs dani burger. Dani . Dani 35 is what Jeffrey Gundlach says are the odds of a recession in 2020. This is a reduction from the 75 he saw in september. Consumer confidence is holding up and we are seeing the market to Economic Indicators still positive. For him, the recession is about inline from what we see from economists at bloomberg, 33 percent chance of recession. The other warning he gave his bbbing of triple be of related bonds. It is interesting, when we jump b lookse charts what bb like and the down risk they get related to junk. Has narrowed to basically a cycle will over here. The borrowing benches gone on by these companies, but Jeffrey Gundlach says if you were holding onto bbb they are under threat to be downgraded to junk because with the leverage ratio they should be downgraded to junk. He says looking at the spread, once the cycle turns, these will become more illiquid and hard to sell. Bonds inld bbb related your portfolio, Jeffrey Gundlach says it is not too soon to take action. So much, thank you dani burger with the latest on your markets. Bloomberg surveillance continues in the next hour. Tom keene joining me from london. We will bring you special coverage right here on bloomberg, also tomorrow as the polls close. Not miss the action. The Program Starts at 10 00 p. M. Tomorrow. This is bloomberg. Francine the pound cut by more than half in a u. K. Opinion poll, the u. K. Election less than 24 hours away. Todi aramco shares surge up the limit, the worldpays largest ipo. Mixed messages on a december delay. Chinese officials expect President Trump to push back on a tariff increase set for sunday. Peter navarro says otherwise. Good morning, good afternoon, good evening. This is bloomberg surveillance. Tom and francine from london. For theeminder International Audience tomorrow, no polls. Tom we have a day off, right . Francine today we can talk about the polls all day. Tom it is wonderful. The view behind us is so important. Lets take it back to the 17th st. Pauls behind us and st. Marys even more famous than st. Pauls. This gothic steeple is one of two in the United Kingdom that is original. Very good. The only history i am interested in, though, is the last time the u. K. Voted in december, which was 1920. That could have a huge impact on voter turnout there lets get to first word news in new york city with Viviana Hurtado. Shares ofe begin with saudi aramco, soaring when trading began in riyadh. The stock jumped the daily 10 limit. Record 1. 88 trillion. Saudi arabiad the stock market into the ranks of the Worlds Largest. We spoke to the head of the exchange. As far as the weight of a aramco, the 1. 7 trillion u. S. Dollars valuation, that is nine point five however, it changes every day. With the price changes today, and we are watching the price changes in the next four days, but i would say from eight to 9 . 9 would be the weight of aramco. Viviana saudi aramco has become the most valuable listed company. Jerome powell is all but certain to keep Interest Rates unchanged. Some of his colleagues may be looking ahead to where they should be raising rates again. The fed will release a statement and update a quarterly forecast at 2 00 p. M. New york time, and afterwards powell holds a news cover and spirit House Democrats embracing a new north American Free trade agreement, this after getting key positions are next week they will vote on a deal. Nancy pelosi says the changes democrats secured make the agreement better for american workers. Global news 24 hours a day, on air and at quicktake on bloomberg, powered by more than 2700 journalists and analysts in i amthan 120 countries, Viviana Hurtado. This is bloomberg. Francine . Tom . Tom thanks so much per elect look at data. Sterling weakening. The straightforward here. On fed day, let us remember it is a fed day. We will have full coverage for you in the United States. Right now, euro, 1. 108 four, really showing the market stability. Francine the market is really focusing on what Peter Navarro was saying. On to the u. K. , Boris Johnsons lead has been slashed by more than half in a hotly anticipated ian poulter ahead of tomorrow hotly anticipated opinion poll ahead of tomorrows election. Mcdonnell john commented earlier on the race. John the parliament seems to have reflected the same in 2017, saying an unstraight the trend has been toward labor throughout this campaign. It is interesting, the poll asked night, usually marking labor significantly downturn now it is saying we are in the margins of error of almost a Hung Parliament. I actually think because they mark labor down, we have a chance of forming a small labor majority. Francine joining us to talk about the u. K. Election is the Chatham House chair. He also sits on the house of lords. N you look at the polls good morning do you believe them . I dont know how you explain the gap narrowing . I dont have a great deal of the confidence, never really been useful most of the decade the u. K. Really. They underestimated but the got in 15,at karen and in 17 it was the other way around. , the very last when we have got is almost close to what i have been thinking of. Margin of error is big enough that jim i suspect what is behind it, nobody wants to vote for any of it. Luckily come as a member of the house of lords, i am not allowed to vote. It is a slightly strange thing, but i am not sure i am not affiliated with any party, even though i was a minister in the government. I think that is out there. They be what is behind this last the tories have been thinking they would do really and midlandhern traditional labor votes. When it gets close to the day, am i going to vote for a party i have never voted for . Identified as a Northern Powerhouse. Talking to Governor Carney about it, you have lived it out of manchester and such. It seems to me as a foreigner, almost all lipservice of london looking north can any given party, including conservatives, can they actually go up north and convince people to vote for him . The numbers probably one question that we will find out the answer to soon after 10 00 tomorrow night because the tories have made their pitch, and the only way they will win is indeed if a lot of disaffected northern brexiteers are persuaded, which is going to require these guys, i think, to believe seriously that the postelection, the tory government would take the north a lot more seriously than they have for a long time. I am really hoping that will be the case. Tom how do you fit the liberal democrats into this . Democrats beberal the deciders in the suburbs of london and in the suburbs of the Northern Powerhouse . Jim to be candid, i think the lib dems have had a disappointing campaign. They took an unnecessary risky stance, which of course is clear what they stand for. By many people, including they think it is a little bit undemocratic. If they would have stuck with a sense referendum, as the of referendum, i suspect they would have had a much better showing. That said, in some key marginals, they are going to split the vote in richmond. I will be amazed in south london if the lib dems dont win. Scenarioslets talk a majority for Boris Johnson, lets say a majority of one or more. The Withdrawal Agreement goes through january 31, and then what happens . Jim if it is a big majority, he can afford to pay less attention to the kind of radical erg, crucial in my view in the brexit scenario. If there is a majority of 70, i would predict without confidence that he will extend the transition period. If he only has a majority of 20, he cannot do that easily. Francine this is something that the former chancellor if you look at the parliamentarians running for , the majorityeem party, much more right wing. Is that fair . Jim i think you cannot split it in such simple, historic conventional ways. You look at the economic policy, you could hardly describe it as right wing. When was the last time an incoming tory possible government sort of had a huge drive in Government Spending . In some ways, if you put brexit to one side, which you cannot, it is almost a little bit like the golden grounds version of new labor. Big spending on house, on health, on education. It is not what you would normally associate with a very right wing tory government. Socially, i think it is a fair accusation because not only are they leaning toward a quite aggressive brexit, but in the past when he four hours they were talking about dipping into the foreign office, someone would see that, myself included, as reneging on the commitment to foreign aid. And all that kind of stuff would be there. Francine we will talk more about that. Jim oneill stays with us. In the meantime, stay with us as we will bring you special coverage on bloomberg today and tomorrow when the polls close. Do not miss the action. It kicks off at 10 00 p. M. On thursday night. Afternoone that, this in new york, in washington, and of course the evening of london, our special fed coverage. The fed decides. Stay with us. From london, this is bloomberg. Viviana this is bloomberg surveillance. Im Viviana Hurtado p Credit Suisse cutting its profit target for this year and next. Trade chechens and negative Interest Rates are clouding the outlook for switzerlands secondlargest bank. Discredit Credit Suisse signaling this year that the Investment Bank is set to make a lot. Chevron expects in the Fourth Quarter to write down as much as 11 billion more than half of that coming from appalachia natural gas assets. This after prices slumped in chevron is considering the sale of its shale gas holdings and is keeping its Capital Budget unchanged. This is the third year in a row that has happened. Apple offering a number of eye options withing auctio its new microcomputer. Fully loaded, the mac pro will set you back 52,000. Thats what that does not include the 400 wheels for easily moving it around the office. That is your Bloomberg Business flash. You so much. Francine lacqua and tom keene on the deck at queen street. A perfect morning. This is the acclaimed london f1 health cut this is what matters right now. Francine it is like espresso shots. The one worry for the posters here is the weather. The weather here. It gets dark early. It is like helsinki. Quite, butt is not what is interesting, we spoke to the posters, the polls that people trust, and a lot of the postal votes have already come in. Because we have not voted in this country in december since 1920. Could we have low record voter turnout . That thersonally think sort of lack of persuasiveness of any of the major parties i haveave a huge not met a person this week who has said they know who they are going to vote for. Tom jim oneill of Chatham House is with us. Now. Bring it up right we begin with trade and tariffs and Peter Navarro moving this back and forth, and then there is this wall and that wall. What it comes down to, jim oneill, is the wall of slower economic growth. Do you suggest that lawrence or with what case, all the candidates are saying, we can grow our way out of the challenges of the moment . With adont really agree of leading can journal leading conventional analysis completely. The last thing i put out on all with underlying substantive growth, it is a bit frozen by some of the failings of modern capitalism. There is a complete absence of public and private Sector Investment in most of the world major economies, and that has been ongoing for most of the decade. Francine why have tom why have we seen underinvestment, whether it is in the philippines, in london, in mexico . Jim i dont know. If you pick up a textbook from the 70s, you have the perfect conditions that should be generating a boom. Record low Interest Rates, very strong corporate profit, low Corporate Tax regimes, the kind of stuff we would have learned would cause a boom. I suspect it has something to do with the risks and rewards in the gains of the financial system. A lot of Major Companies basically do not want to take the kind of risks that they used to have to do. It is a lot easier to just buy back your own shares. Francine it doesnt make sense unless they worry about something. You would not have said that they trade war would get worse. Jim that is where the wall of worry comes in. Whether they worry or not, it is helpful to the chief executives, who have these intriguing paymasters in the equity realm to satisfy, and is a neverending thinker it i slightly disagree with the common view of all of that. We have been around a long time. There have always been a lot of things to worry about. What is this comment what is common to this 24 7 media era that we live in . It is easy to know what we worry about. Tom you were with briggs and jim those were the day. Paul volcker, who just suddenly sed away, reigned over talkine we also have to about this maybe not impacting the consumer. Coming up, we have a full roundup of airlines. The International Air transport association chief executive, alexandra did jr. He is coming up next that alexandria did jr. This is coming up next. This is bloomberg. Tom a perfect day in london. A perfect december day, an election tomorrow. Francine lacqua and tom keene on Queen Victoria street. We need to take a moment here on the extraordinary set of remembrances of paul volcker. Had an important essay on it. You at Goldman Sachs, what was it like on a trading desk with 11 , 12 inflation . Jim kind of scared of it. You talkalks about fed watching, that is kind of when it started. Thursday nights with m2 money supply. Remember the likes of lacey hunt . For many months, the guru, being accurate on each weeks numbers, and the markets would move like tom because of the money illusion, the lack of theory, is there any comparison with the quietness of now . Jim there were two big reasons why it was such an exciting time to one was the beginning of the attempt to crack the inflation bubble, so it opened up all the particularly in the currency huge io you get remember in my days in new york, the dollar deutschmark moved by 25 big figures in a day. Tom the lebanese pound was a major thing. You imagine the life of a currency trader today . You would have to catch up on your sleep. Thatine people remember will people remember him for his work on inflation . Jim one of the great things about volcker is that he moved from being the anchor guide who sort of brought broad application into central banks, and then on top of that, the way he thought about regulation as being pretty spectacular, too. Not quite sure i would go as far as some of the things i have read about him could i regard him as important as Alex Ferguson . There is economic policy, then there is life. But he is definitely up there. Out ist figure it just figured it out. Jim i had the pleasure of meeting him two or three times. He was one of the actual people who were looking. I dont want to spread a rumor, but it is interesting. Is fedat all of it, it day here as well. Are we accommodative right now . We will talk about that. Jim it seems to be remarkably accommodative. If you look at 1969, unemployment lets put it in a paul volcker context the fed and the bank of england and the ecb have these inflation mandates. If we had a paul volcker in charge, hang on a minute, we do not just want to stoke up the next problem by just handing the number we are getting on inflation. Does the bar need to be high to change it . Letsuld like to see. I think in some ways she is a good person for that because she has not got a conventional bun to spank type bundesbank background. Way it is helping with some of the inequality that scientists wearing about. Francine jim oneill stays with us. Worlds of a the biggest ipo, we look at that. This is bloomberg. Bloomberg surveillance, tom and francine overlooking st. Pauls with a nice history lesson. 1680,his is st. Mary from and that is the original tower, one of two in the United Kingdom that survived the bombing in world war ii. It is the real deal. Francine talk about history, going around london with historical sites. Out if the gig doesnt work , and here is buckingham palace. Francine stay with us. We will have special coverage on bloomberg as soon as the u. K. Polls close tomorrow. Do not miss the action that closes at 10 00 p. M. Saudi aramco jumping 10 in its trading debut and readd. , giving the market 1. 88 trillion. We spoke to the chief executive about the ipo. Operate state of art trading engine and i think the tests today have proven that with the size, what the number oforders with the number orders that is expected from aramcos investors, the market is moving smoothly, trade well be executed smoothly. Requiredone all of the tested before we come out and say we are confident we can deliver, and this is what we have proven today. Obviously a big part of the rationale was trying bring forward investors into the exchange. What role do you think aramco will have with the index inclusion attracting more Foreign Investors . There are two factors for attracting Foreign Investors, the ecosystem on the economy of saudi arabia as well as the attractiveness of the market. You have to supply the demand of investors by good company on return. I think aramco today with the performance come up with the , i think thisco is what we aim to do as an exchange. Adding more companies, more successful, good Case Companies to the exchange will definitely bring more investors in general, and of course help the International Investor attractiveness, which is something we are focusing on after the inclusion, talking to more active investors, educating them about the saudi market. Ourco has accelerated marketing and promotion for a bigtime. Celebration, the chief executive officer of aramco, their chief Public Offering the most successful today. Joining us from riyadh is yousef gamal eldin. Will they expand the interest in their equity to an International Audience . Yousef that is key, and we have a base valuation of 1. 7 trillion. With this latest pop we get 1. 88 trillion in a good deal has been focused on regional and institutional investors. Iny were planning a roadshow Important International capitals, but they called it off and came to the conclusion that offering one. 5 of the market 1. 5 alization initially of the market capitalization initially and trying to push , andgh a successful launch after the optics check out, after you get close to the 2 trillion valuation, then you Start Building on that. We had reports you could be looking at a secondary listing internationally and potentially in asia. Francine i heard if you look at the valuations, they are currently at 1. 88 trillion in they wanted to trillion dollars. There are no sellers. What do they need to change . Andef time needs to pass, theres the option of Goldman Sachs is the stabilizing agent to exercise 450 million shares of an option. That would allow additional liquidity into the trade. A lot of the investors who initially came on board during the ipo havelock in period , so as then period process matures that will loosen up. It will be an evolution and exploration to say the least. Francine yousef gamal eldin in riyadh for us. Jim oneil is still with us. I dont know if this changes the game for oil because the saudis have so much skin in the game they will probably defend even more the price of oil through production cuts and keeping opec alive. Jim who knows . I am sure it gives them more marginal focus, but the oil price is always so important to them anyhow. What i have got going in my mind, the irony of this, with the whole of the western worlds institutional and investors being drafted into quite rightly the battle against Climate Change, and people saying cannot touch any fossil fuel shares, we have the most highly valued company in the world that is doing nothing other than fossil fuels. It is kind of like, do we just all talk about stuff, or is there serious principles going on . Indication of an the saudis undertaking proper reform, or is it some kind of almost i dont mean it in an abusive way some kind of gimmick . Francine in there prospectus, they say 2030. Does it come sooner . Even if you phase it out jim one of the reasons why the story is stamped on my head. We applied it to the Energy Market and it seemed oil would be sometime not too far off from now. Peak oil would be sometime not too far off from now. There is india and whether it will be like china, and how serious the battle against using fossil fuels is, which a notable step change the past six months. Tom let me stick with oil and the strategic shift companies have to make. We have this from john lloyd brown at british petroleum. Do you have confidence big oil can shift to a new and different world . Jim not necessarily at the moment, but i think linking at partly to what we touched on, touched on,ng everything in business is about risk versus reward and if they perceive their share will completely collapse unless they are a lead player in the speed of moving to alternatives, that is kind of what is really necessary. I can see that coming. Another thing Christine Lagarde touched on a little bit, are we looking at a world in the next two or three years were central Bank Regulators have capital to linked to what are you doing in the battle for Climate Change . That could be enormously relevant. Francine jim oneil from Chatham House speaking about new will both feel and has talked a little bit about the European Commission putting forward this green deal that will overhaul how it polices businesses and manages trade based on environmental factors. Industry that is affected is the Airline Industry. You for joining us on bloomberg surveillance. I want to talk about the surge incapacity. There is more capacity next year as new planes are delivered. How much pressure will that have on fares . We expect for next year a , mainly duedelivery to the production of the aircraft and the orders that have been done by the airlines, on also we expect a search aircrafts,ed especially the 737 max. If things are on the right schedule, we should have a slight increase in the market. Additionally, we must see the there is significant pressure to retire the oldest part of the aircraft which are less fuelefficient. Aircrafted them by new that are more fuelefficient and environmentally friendly than the oldest ones. Francine if you look at earnings growth, do you see any bankruptcies in europe . Is there a feeling the airlines will do quite well, leaving the small ones to struggle . Alexandre recently in the past seen a numberhave of bankruptcies in europe. There is also another factor, there are a lot of airlines operating in europe or within the borders of europe. Certainly when we look at our outlook in terms of profitability for europe, European Airlines should be profitable, not as much as north american ones, but still something significant, around 8 billion for the European Airlines in 2020. Ifis a decent number, even it is not the biggest one. We are expecting additional bankruptcies. We do not help that to happen, but it is something that cannot be excluded. Tom there is images to be had away,lines of up, up, and fly the friendly skies, the newest thing is flight shaming. It is catching on in europe, not in the United States. Will you be talking to us five years now about my gilt of guilt of getting on the surveillance train . Alexandre we have all the Environmental Issues and we have been working for 10 years. We have longterm and shortterm programs that affect the issue directly. We will reduce our Carbon Footprint significantly in the next 30 years. In europe, we have seen that flight shaming that has increased, has been growing for one year. Economically and financially, it has been, up until now, impossible to identify if this movement has had an impact, and Economic Impact on our airline members, particularly the northern part of europe and sweden especially. We have done some studies. It is impossible to identify if there is an impact because there are other factors like gdp growth, taxes imposed by the swedish government that have had significant negative impact. Francine we need to ask you about the 737 max. What do airlines and the Airline Industry need to learn from what happened . Alexandre what we have to learn from that issue, from the 737 max is first of all that we cannot compromise on safety. Safety is the key issue. Problem,e is a safety the key elements of an aircraft, we must take appropriate measures immediately. Secondly, the certification process, we have always advocated in favor of certification process which is in place now. Is capable of certifying and then goes to another. We will have, to service the 737 max, several different certification processes in various parts of the world. We are advocating for that. Is a questionere about the certification process, we urge regulators and the Certification Agency to work on that, to collaborate, to restore the necessary confidence in the certification process that has been so successful the past six years. A strong industry by chance. We have reliable safety programs. Tom we are going to have to leave it there. Thank you so much. We are going to continue here this day before the election in the United Kingdom on the fed and the fed meeting at 2 00 p. M. At 5 00 p. M. , former fed president dennis lockhart. This is bloomberg. Just like all other pauls, it has a margin of error other polls, it has a margin of error. At this stage, we dont feel like we will fall out of parliament because of the margin of error. Francine that was chris curtis. They say the conservative lead thaneen slashed by more half tomorrow, we will in by more than half. The election is tomorrow and we will not talk about it. Jardine is joining us now. Thank you for joining us. Of theu look at all concerns, the polls narrowing between laborers and conservatives, what would it take for the lib dems to do a coalition with labour . Christine it will not happen. We will not join with Jeremy Corbyn in number 10. We could have a Hung Parliament and if that is the case the lib dems would have a significant influence in the next parliament. We will not be going into coalition with Jeremy Corbyn or Boris Johnson. We made that clear. Francine Jeremy Corbyn or labour . If they replaced him, would you do a coalition . Christine that is a different scenario that is not on the table. A vote for labour is a vote for jeremy and we will not put Jeremy Corbyn in number 10. , you will see the liberal democrats who are in a position to feed conservatives and ensure that defeat conservatives and ensure that parliament has to produce legislation which we have been calling for, for three years. Tom what is the single message liberal democrats have for key marginal voters across the United Kingdom . What is the single appeal for those suburbanites . Christine what we want to do is build a brighter future. We want to tackle Climate Change, build more housing, invest in health and education, but to do that we have to stop brexit and in scotland, we have to stop independence. We have to ensure the u. K. Stays together so we can build the brighter future. Francine thank you so much for joining us, christine jardine, the rural democrat spokesperson. Thank you for staying liberal democrat spokesperson. Thank you for staying with us, jim oneil. Tomorrow, the exit polls start at 10 00 a. M. And we have full coverage. This is bloomberg. Tom a perfect winters day from london. , markets a data check churning, sterling weaker. A little bit of a wind out of the sails. Euro, 1. 1082. Francine a lot of the focus is on what happens with the tariffs that could be reimposed, or not being taken away by december 15. We have a picture with Peter Navarro saying he has not heard any plan of taking them off, which is why the markets have turned a little sideways. Tom David Blanchflower with us and roger bootle writing from the telegraph for the telegraph. 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. Tom this morning, with impeachment, the matter of the british election. What can the chairman say to push the sub 2 economy . Weaker, one day to the u. K. Election. All agree a Hung Parliament is the worst outcome for all. On a fully employed america, later in the hour David Blanchflower of dartmouth. Overlooking st. Pauls and st. Marys in london at Queen Victoria street the day before the election, it is a perfect day, but the weather and the darkness wrap around the morning in the afternoon is a tangible issue. Francine it is tangible because a lot will depend on voter turnout. I spoke to a man who did this poll who said we still have to be careful because the gap between the labour party and the conservatives narrowed yesterday and led to a pound move. It is a difficult election to measure because it is the First Time Since the 1920s they voted in the u. K. In december. It could be very cold, a number of factors that may be make it just as uncertain as last time. This,im oneil mentioned the number of undecided voters is extraordinary, with all the research that is going on. Aramco on saudi saudi arabia and aramco and a better ipo, here is Viviana Hurtado. Viviana shares of saudi aramco soaring when trading began in riyadh. The stock jumped the daily 10 it a record 1. 88 trim trillion dollars. It lifted the saudi arabia and market into the Worlds Largest. We spoke with the head of the exchange. Aramco, it is the full offering side is offered in the market based on 32 reels rails, that is a 9. 5. However, this changes every day. With the price changes today, and we are watching the price changes in the next few days, but our anticipation from 8 to 9 would be the weight of aramco. Viviana aramco overtaking microsoft and apple and has become the most valuable listed company. Federal reserve chairman Jerome Powell is all but certain to keep Interest Rates unchanged. Some of the calling may be looking ahead to when they should raise rates again. 2 00 p. M. Ll update at and afterwards powell will hold a News Conference. Pete buttigieg releasing the names of clients he worked for at mckinsey, including blue shield michigan, the postal service, and the pentagon. He has come under fire for not giving voters a full picture of his private sector experience. Global news 24 hours a day, on air and quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Hurtado. Ana this is bloomberg. Tom thank you so much. Of aa check, a sure sign good america. Home depot out with a comp store comparison, better than good, 3. 5 statistic, one of the tea leaves into 2020. A turn to the market with euro 1. 1085. With all this work in foreign exchange, it is boring in fx. Francine i think a lot of the focus is on u. S. Tariffs on sunday. There is lingering uncertainty over the progress of u. S. China trade talks, treasury announcing, and the Federal Reserve policy decision. Tomorrow is the u. K. Election in the first time Christine Lagarde has a News Conference for the ecb as president. Boris johnsons lead has been eventd in half ahead opinion poll. According to the model, the Prime Ministers conservative win a majority of 30. Is an author, and you have a great book the came out. When you look at the polls, are they more difficult than last time . I feel like the u. K. Polls in the last years have gotten things wrong. Have so weall they cannot expect much. This election is difficult to call because you are coming down to individual constituencies. Someave conservatives, agreement for some parties to stand down for each other, and Boris Johnsons strategy which is what theresa may ran and failed, to take traditional districts from them. If you does that, he will get slightly more. Francine lets say there is a Hung Parliament. What kind of coalition do we get . Camilla a Hung Parliament is definitely a possibility. Boris johnson and the conservative party do not have many people to ally with. Is most likely conservative that Jeremy Corbyn would become Prime Minister in some form of coalition with the Scottish Nationalist Party and some support from the liberal democrats, not a formal arrangement, but they might support him on legislation. Tom you lived the referendum of Prime Minister cameron. There is talk of Hung Parliament, that we would have another referendum. With a 51 49 structure, does the nation need that and can the nation withstand another referendum . Camilla this is another caution. A lot of remainers believe it is about economics. It is not. It is about culture and identity. A lot of people who voted leave have not changed their mind and still feel passionately it is about culture. It is suggested that brexit will be bad for the economy, the election is about patriotism. Jeremy corbyn is doing so badly because he is antinato, antiamerica. Tom how do we get the middleground back . Is it like the United States where the metal is oroid or middle is devoid can you get back to Something Else . Camilla everyone predicted the lamoreaux liberal democrats they made a fundamental mistake of advancing a policy where they would revoke the referendum results. Metropolitan remainers feel that erase a far to try to democratic referendum. Passally, we have a first the postelectoral system that is becoming increasingly polarized. Labour or the tories and will not come back anytime soon. Tom this is a good place to come back to civic collections 101, there is 600 elections tomorrow. Americans do not understand that. Francine and to lay on top of that, tactical voting. Do people do that . Camilla of course they do. Mention leavers do not Boris Johnson or Jeremy Corbyn. They are not appealing to their voters. A surprising number of voters do not see there will be lots of tactical voting, mainly from remainers on how can i best achieve my vote . There are Business People who would like to stay in the e. U. But believe Jeremy Corbyn represents an existential threat to the nature nation and would be worse than brexit. It is an election for despondency for that group of people. Francine stay with us, Camilla Cavendish. U. K. Gear up for the general election december 12, we will bring you special coverage on bloomberg tv as the polls close. It starts tomorrow, thursday night at 10 00 p. M. Tom in washington, there will be a press conference. Michael mckee is scheduled to be there. The fed at 2 00 p. M. Bloomberg. You are watching bloomberg surveillance. Credit suisse cutting its profit target for this year and next. Trade tensions and negative Interest Rates are clouding the outlook. Credit suisse also signaling this year, its Investment Bank is set to make a loss. Chevron expects to write down as much is 11 billion in the third quarter, more than half from its appalachia natural gas assets. They are considering a sale of shale gas holdings and are keeping their Capital Budget unchanged for the third year in arroyo. Apple offering a number of eye watering prices with its new mac pro. You can buy the device for just under 6,000. Fully loaded, it will set you back 52,000. Wheels for moving at around the office will set you back extra. Tom thank you so much. As we try tondon stagger the election tomorrow and our special coverage is Camilla Cavendish, former head of policy to David Cameron and his known for writing for is known for writing for the financial times. World. Ons for an aging one does old age begin now, 80 . Roger camilla 80, camilla 80, 85. ,hen you go to japan gerontologists are not interested in you until you are at least 85. It is not old age getting longer, it is middleage. Tom get back to the election crisis, do we have time to get back to normal pollen tics we grew up with . Camilla do we have time politics we grew up with . Back tove time to get the time we remember with rosecolored glasses . Camilla i think we do. This election is polarized. The irony is if Boris Johnson gets a big enough majority he may be able to break free of his right wing and return to the more liberal center he represented when he was mayor. There isot clear, but a lot of moderates in the conservative party who would like to become more pragmatic. The clear issue is brexit, which he will deliver. Francine are the centrists in the conservative Party Running for parliament . Is this a party changing a lot . Camilla it already changed in 2017 when theresa may lost about 27 mps that were moderates. Mps that areng in more culturally and economically conservative. They will want job security, more state intervention. In a sense, you will see a shift to the right and i suspect, a bit more pragmatism. He has got a loss of fairly cabinetpeople in his and he may be able to shed some of those and look more moderate and diverse. Francine what about labour . Camilla a lot of the moderates in the labour party know the only way they can get rid of Jeremy Corbyn as if he loses this election fairly resoundingly. The question is who comes next . It is not clear it will be a desired moderate. Be some ofy it will his favored candidates who will be on the same left wing agenda as he was. Tom Camilla Cavendish with us. We have a good understanding of the distance from blair to corbin. Corbyn. What is the distance from blair to johnson . Is there any distance from Jeremy Corbyn to johnson . Camilla David Cameron was an outward looking liberal. Brexit has choose forced him to choose sides. He wants to leave the e. U. But a every measure, he has got big agenda of fiscal stimulus and theories of spending pledges which is a complete shift from the Cameron Osborne era when we were trying to tackle the deficit. Whichever party wins, britain will move to substantially greater spending. There is little narrative of reform. The language is all about, lets throw money at various services, and david is about getting other services David Cameron was about Getting Better services and greater confessions. Fficiency next, ming up blanchflower and roger bootle. One day before the u. K. Election in london, this is like bloomberg. Good morning, everyone. Tom keene and Francine Lacqua from london, Queen Victoria street, the financial part of london. Distant from harrods and the hustle and bustle. Everyone is focused on the extraordinary election. Atlee. Hurchill and tomorrow is a big day for this nation. Francine it also questions the polls, do we trust the polls . Yesterday, the pole that is trusted more than any other really focusing on that majority or that spread between what ,abour and the tories will do narrowing significantly. Tom lets look at the wall of worry. Our problem is there is so many things to put on the wall. Francine we need a bigger wall. Tom manufacturing malaise is what i want to go to. This is the new mustread, meier wolf talking the aie economy by one roger bootle, not only but capital economics, writing from the Daily Telegraph as well, and it goes to the heart of the matter and fear of conservatives in the United States, republicans and democrats. The future of jobs, the future of being employed. I am learning about jim oneils Northern Powerhouse and it is about a collapse of manufacturing. Is it about ai and robots . What can any politician do . Roger i dont think it is about ai and robots. A lot of jobs will go over the next few years and decades to come. Manufacturing is not about ai and robots, it is about the decline in world trade, the weakening of china. It is also about changing consumer preferences. Increasingly people do not want more of more things, they want better quality and better services. Wins it, whatever flavor the wind is. Policys he establish big for the wedgewood parts of the United Kingdom that are essentially destitute . What is the policy prescription of conservatives to help labour and the dying manufacturing space of this nation . Roger i dont think he will be able to revive manufacturing across the country. It is weak in this country and weak across much of the mastering world western world. For republican investment is infrastructure. Southeast, so many parts of our country have been left behind. Francine why is the majority narrowing . Is it something Boris Johnson is getting wrong or Jeremy Corbyn is getting right . Roger we have a narrowing in the pole that is widely poll that is widely expected. It could be a margin of error. Jeremy corbyn appears to have been clawing back a bit of support, as those people are remainers who moved from the liberal democrats to labour. Francine how do you describe this new conservative party . It is may be socially more right wing than in the past but it is quite to the left in terms of Government Spending. Roger that is right. The simple answer is we dont know. We have had Boris Johnson for a couple of months but he has not had a majority in parliament and we dont know what he intends to do if he gets the majority. In the past, he has been ideologically light. I think it will be a battle royal in the party. Roger bootle with us, his economy. Ite ai is getting rave reviews. How is it possible, roger bootle with four citations of karl marx . I never thought i would see that. Besides the election, there is a small matter of the United States. Is live at the fed. This is bloomberg. [ electrical buzzing ] [ dramatic music ] ahhhh ahhhh elliott. You came back this is bloomberg surveillance, tom and francine from london. You are looking at live pictures of westminster where a lot of the focus will be in the next couple of days when we know who will form a government, if it is a Hung Parliament, or a majority for the tories. As we gear up for the general election, we will bring you special coverage as soon as the polls close. Do not miss the action kicking off at 10 00 p. M. If the exit polls show a clear majority for the tories, it will be over. Lets get to the bloomberg first word news. Viviana we begin with the big debut for saudi aramco, shares started trading in riyadh. The shop stock jumping the 10 daily limit, giving them a value just under 1. 9 trillion. A key u. S. Senate committee capturing President Donald Trump on foreign policy, pushing ahead to impose sanctions on turkey. They may penalize russia for interference in the election and other offenses. It is unclear if they will make it to the senate full senate. Increasingactivity at the volcano off of new zealand. That is kept cruz from recovering the bodies crews from recovering the bodies. Griffin hasken another money machine to rival his hedge fund. Generated 3. 5 billion of revenue last year. Morgan stanleys trading index moved the bloomberg billionaire index to recalculate his wealth by nearly 50 . He iswere heatedly reputedly worth 15. 5 billion. Global news 24 hours a day, on air and quicktake on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am Viviana Hurtado. This is bloomberg. Tom it is more than an election. It is about society and culture. We were talking to roger bootle of capital economics, his new book on Artificial Intelligence has affect economy. We are talking manufacturing. No one has looked at unemployment and underemployment like David Blanchflower of dartmouth college. We are thrilled Danny Blanchflower could join us. He is in geneva this morning. Seen the political pressures at the bank of england , of the chronic underemployment of a given society. What can policymakers do after this election to assist the underemployed . David great question. The first thing is to take notice and realize the underemployed is the crucial labor markets lacks variable, they are the group that matters more than the unemployed. I worked on this wage unemployment thing forever. Unemployment is the crucial thing. People that have these underemployed jobs are unhappy. You had the discussion, roger talking a minute ago, a lot of the discussion in the u. K. Is the Unemployment Rate is low but people are hurting. They are in the gig economy, cannot get enough hours, wages are too low, and they want brexit over and done with. The economy is quite a full way quite away from full and boosting fiscal stimulus, what will the central bank do . Who will control the central bank . The reality is that we need to get real wages up, we need to people are hurting, they want change. They need somebody to do something for them. Tom it sounds almost 19. Is the 19th century. His fiscal expense is fiscal expansion after a too austere crisis . David we know it was a reckless mistake and everybody suffered, so the answer is yes . You need to target incentives for people to work, give them tax cuts at the lowend so real wages will rise, and focus on the people that are hurting. That will be the stimulus to the economy. Public spending will help, infrastructure will help. Go back and rebuild the infrastructure that was killed off by the tories in 2010. Social care, schools, libraries, swimming pools, at the same time as wages falling we saw the Public Services. They took away the police and crime has risen. Boris johnson saying they will increase the number of police but they were part of the party that decreased the number of police. All the austerity since 2010 was clearly a mistake. Francine let me bring in roger bootle. Spending planthe for the manifestoes . Roger i think we can. Danny and i have sparred over the years. I dont believe austerity was a mistake. The debt ratio has not got down but the Interest Rates are incredibly low. For goodness sake, borrow. Opposite frome what they were some years ago, so i am with it. We need extra spending an extra public borrowing. Francine danny . David we can go back to 2010, but i agree with roger. It is not just about spending, it is about investing, invest in the infrastructure, in public service, in improving commuting times. It is not about go and consume things. You need to get the economy moving and we need to get productivity up. Invest in the people and infrastructure, in science and green things. The big word, it is not just about borrow, because clearly you can borrow cheaply. It is about investing and improving productivity. I am going to pull this back to our memory, coming out of world war ii in america, the deficit is for the public good. Conservatives lost that. There was almost what we call a calvinist tendency that no debt is good debt. How do the conservatives extricate themselves from that calvinist tendency . Roger it is gradually happening. Circumstances are different. It makes a difference when you have markets falling over themselves to buy public debt. There was a thing called the gilt strike where the markets refused to buy government debt. We are not in those conditions. Important, although they could just splurge money on anything. Ironically in this country we have had to cut public are spendingnd investment is the opposite of what it should be. Francine in what circumstance would you see negative Interest Rates in the u. K. . Will that ever happen . David sitting back in the mpc, we talked about. 5 percent being the lower bound, the lowest rate Interest Rates could go. The ecb, the swiss central bank, sweden, japan all gone negative. How can you rule it out . How negative can you go . We dont really understand. The reality is with Interest Rates at. 75 , when the next shock comes and it surely will, the central bank does not have much firepower. At the very least it will probably try to cut from. 75 to. 5 to zero, which is not that negative not that different from. 25 . It is not an impossibility. How will the monetary authorities stimulate the economy . This is the issue Christine Lagarde will talk about tomorrow in her press conference. What is the ecb going to do . I want the fiscal guys to do something. What will the government in britain do . We dont know so the central bank will have to do something. They will have to consider negative rates and have to consider what it will do with qe. Francine Danny Blanchflower, author and dartmouth professor. Roger bootle stays with us. We will have plenty more on the election. The polls are narrowing. This is bloomberg. Usually marks labour down, now they are saying we are in the margin of error of a Hung Parliament. Because they marked labour down, we have a small chance of a majority. That is crucial with the data we sent out last night because waltzed the estimate is a conservative whilst the conservative estimate is francine that was chris curtis him,ugov and before speaking to bloomberg about the polls. He says the conservative lead thaneen slashed by more half. Tomorrow will be a blackout. This is a uniquely u. K. Electoral law. You cannot talk about the manifesto or the polls tomorrow. A are happy to be joined by minister. Do you trust the polls, and if you do wire the conservatives not doing as well . Clearly the polls are tightening. Was a founder of yougov i left the company nine years ago, but they are a brilliant organization, as there mrp demonstrated. The polls are tightening and we take nothing for granted. The Prime Minister was out at 5 00 a. M. And we will work until 10 00 p. M. Tomorrow night to get the vote out. This is a binary decision. You either end up with a boris government that delivers brexit and can invest in our economy Boris Johnson government that delivers brexit and can invest in our economy, or a jeremy that promisesent another referendum that will be decisive, and a difficult place for businesses because of the uncertainty can only be bad for business. Election on this an personalities, or only on spending . On brexit . What are the u. K. Voting on . Nadhim the message that seems to have cut through according to an article in the times of london last week is get brexit done. Boris johnson managed to get a good deal when people were cynical about his intentions of wanting to get a deal, getting a deal. He managed to get a good deal, could not get it through parliament because clearly parliament was not interested in getting a deal through and there was more delay and a blockage, so we were forced to go to the country. This election is about, do you want brexit done, and delivering Public Services, hospitals, schools, and security and our police force, or do you want more did there and delay for another year of a second referendum and a referendum on Scottish Independence under Jeremy Corbyn . There are two visions, Boris Johnsons vision of a country that believes in a country that can unleash its entrepreneurs and Wealth Creators and Public Services that are dying for investment, or Jeremy Corbyn with more dither and delay. Tom is a chemical engineer and the inventor of yougov, you know your multilevel regression and postratification process. Postis all great stratification process. That is all great. What you have lived as an iraqi kurd is migration and immigration. What is the proper migration immigration policy . Nadhim thank you for your question and thank you for reminding the viewers i am a chemical engineer. You are right to talk about mrp. Thatolicy is positive and we will have an australian style pointsbased system that will allow us to get the nurses the nhs needs along with the great scientists and innovators like the two brilliant scientists who in manchester,ne as well as the Agricultural Sector where they need seasonal workers. Theever they need, australian style pointsbased system will deliver on that. That is a good thing. We need businesses, Large Industries to step up and do more on skills. We have a 3 billion pound skills fund we have announced if we get back into power, and every infrastructure project, we will put 100 billion into infrastructure and will require them to take on apprentices. Francine thank you so much, a u. K. Conservative minister for business and industry. Coming up, we will have plenty more on the biggest ipo in the world, aramcos redhot debut. We are live in riyadh. This is bloomberg. Weight ofht of the aramco. If the full offering is offered in the market based on 32 riau and the 1. 7 trillion, the valuation, that is a 9. 5. However, this changes every day. With the price changes today, we are watching the price changes in the next four days, but our anticipation from 8 to 9 would be the weight of aramco. Thetadawulthat was chief executives on saudi aramco. Wallace. Stuart and yousef gamal eldin. Elsewhere,d to list or is this enough . The theme center, the foundation for the road ahead, and arguably this was about making sure the markets are right. Billion of the company has been listed, which is just a fraction and leaves the room to list more. Localcus was primarily on and regional institutional investors, and opening the door for National Investors will be critical for the credibility and legitimacy that the saudi aramco name is aspiring to. The next step arguably would be to go on the road trip that was canceled and major Capital Markets around the world in major Capital Markets around the world. Some of the asian investors are being considered for a secondary listing in 2020, and tomorrow, we might see more upside in this trade given the amount of support going in. Francine how does saudi aramco compete with the exxons of this world . Stuart they are having to use a different argument. They cannot say, we will give you a better yield than anyone else because they will give you a were sealed. They are going in worse yield. They are going in, there will be longterm value. We can produce it cheaper than anyone in the world. Drilled barrels of oil in the world will be from saudi arabia. How much on peak oil, difference is it from what people think . Hard to tell and it is almost a wrong number to focus on. Today,lity is even after tens of millions of barrels will continued continue to be burned for years to come. You, yousefank gamal eldin and stuart wallace. Stay with bloomberg. We have full coverage of the feds decision at 2 00 p. M. In new york. This is bloomberg. Decision, andnts ive got no indication he will have other thing have anything other than a great deal to put the tariffs on. Alix will they or wont they . The u. S. And china still try to hammer out a deal. Bank of america warns the market isnt priced for a dot plot. We will talk to the man behind that call, mark cabana. Saudi aramco makes history. The energy giant jumps 10 in its market debut with a market value of 1. 88 trillion. Welcome to bloomberg daybreak on this wednesday, december 11. Im alix steel. Lots of news over the next 70 due hours, but markets not really moving. Is a patient wait and see when it comes to the equity markets, flat on the day. Two days of declines