Transcripts For BLOOMBERG Bloomberg Daybreak Americas 20240713

Crown the world from all around the world. Our bloomberg voices are on the ground with all this mornings top stories. We begin in china, where the government signals a cash injection is on the way to ensure a strong start in 2020. At a meeting in china, the premier said the resiliency is continuing. The chinese economy is resilient. The Chinese Market is huge. We are determined to open up further. We will reach a winwin relationship with other countries, especially with our neighbors. Alix joining me on the phone is sharon chen, the beijing bureau chief. What have we learned from his speech . Give us a backup of the bilateral meeting. Sharon it basically signaled there are going to be product cuts with the amount of cash the banks have to keep as a reserve. Lending to the private sector is a huge part of the economy that china needs to shore up. It accounts for nine out of 10 jobs every year, and it comes after china already promised wideranging set of initiatives that will boost the nonstate sector, and also that it will implement a fresh round of tariff cuts. Before ahe comments trilateral meeting with president abe from japan and president moon jaein of south korea. They showed how china is going to be dependent on international trade. That is the backdrop of the trade war that it is currently engaged with with the u. S. Alix now we head to germany where bmw is under scrutiny by the securities and Exchange Mission over sales reporting practices. Our guest joins me from munich. What is the accusation . A little unclear, but it is about bmws sales reporting practices. In the past, the company has come under criticism for forcing dealers in the u. S. To buy cars to lend out to people when their own cars are being serviced. That is one criticism in the past. Month orthis comes a two after Fiat Chrysler had to over to pay 40 million criticism of their own sales practices. Alix bloombergs tim low. Thank you for that. Mining of financing from china, tesla arranging for 1. 4 million for a shanghai factory. Joe easton joins us. In all parts of the record run that we have also seen in the stoxx. Tesla has this finance, around 1. 4 billion, people familiar with the matter. It is selling its sedan model three in china at the moment. The cars that are made in china are particularly cheaper than the ones that are imported, so they have done really well. It looks like they are building that with the new financing. The stocks have had a great run. Interestingly, with trading yesterday, it was at 420, the level that elon musk tweeted about and got himself in trouble with the sec, which she said was to impress his girlfriend. Fined for that. There are more gains today as the Company Looks to secure its financing for the shame high factory. Alix thank you so much, joe easton. The white house is telling u. K. Government that huaweis access to five g networks could present a security risk, according to the financial times. Guy johnson joins us from london. What can you tell me about the report . Guy what the report seems to suggest, this interview is with robert obrien, a National Security advisor, adding up the pressure on the u. K. Not to include huawei in any shape or form in the 5g rollout. This has been an ongoing story, but the latest salvo just further increases the pressure on Boris Johnsons new government not to include huawei at all. Up until now, the u. K. Has taken the approach that if huawei is not in the core system of the 5g network, than the security andems can be secured basically made to be ok and in accordance with mi5 and mi six. The u. S. Takes a different position, saying it is not a commercial decision. This is a National Security decision, and huawei should in no part play any role in the 5g network for personal security reasons and also for National Security reasons, including nuclear codes, mi5, including mi six. This poses a big question for Boris Johnson which way is he going to go postbrexit . He needs to secure a trade deal with the United States but also with china. A very difficult decision upcoming for Boris Johnson. Alix and the u. S. Is putting pressure on germany. I want to get your take on what happens in the next few weeks as we inched toward the deadline in Boris Johnsons government. Guy the brexit deadline that is upcoming will take place. January 31, the u. K. Leaves the e. U. Then we move on to the withdrawal arrangements. Basically we have a oneyear negotiating period to develop final trade deal. The indications are at this isnt in time, the u. K. Prepared to diverge on a regular basis regulatory bases in a number of areas from the e. U. Meaning there is the possibility of a no deal brexit. Boris johnson is leaving that on the table. That is why the pound spiked on the 12th. Ever since then it has been going down, trading sub what 30 some 130. Alix and boeing ousted Dennis Muilenburg after a pair of 737 max crashes left the fleet grounded and out of production. Joining me on the phone is George Ferguson, bloomberg Senior Aerospace analyst. What is only to do list for the new ceo, David Calhoun . George i think david has got probably a long to do list. His First Priority is getting the 737 max into fleets approved by the faa. It is all about improving the relationship with the faa we do not think it will accelerate with the plane getting back into service. The timetable, it is early earliest, mid february. That could slip further, and the markets were surprised a couple of weeks ago when we found out that we were going to the plane back into fleets by early january, and the faa said the earliest they would consider the review would be mid february. So i think Debbie Calhoun needs to focus boeing back to David Calhoun needs to focus going back to engineering. Was focused onrg cash generation, cash to shareholders, but not executing from an engineering standpoint. We had problems with the max, the u. S. Tanker, and the starliner. It needs to go back to its engineering roots, focus on good execution. The company will have to look at a new 737 after this. They probably pushed the airframe as far as they can, so they have to turn back to it hard engineering skill set rather than just finance driving numbers. Alix George Ferguson of bloomberg intelligence. One more story worth watching bite dance. Nas bloomberg has learned that advisors to the ceo are exploring a range of options that include an aggressive Legal Defense or selling off part of tictoc. A majority stake in the business could be worth more than 10 billion. Got to love it. Coming up on this program, we will have much more of the trade analysis. This is bloomberg. Timeme for bloomberg for bloomberg first take. Also our Portfolio Manager. We start with you. Two them are not much. I wanted to highlight what was said overnight in terms of china opening up like every sector and they are going to be in there, and there will be lots of liquidity. What do you make of Something Like that . The situation with china and the United States will be very interesting. They are both vying to be the number one economy. Two tough guyse in high school. Alix i went to an allgirls school. Sorry. If you want to be my friend, you cannot be his friend. China is doing this with germany, the u. S. Is doing this with u. K. With huawei,g u. K. You cannot play with me. This is what china is doing. They are opening up their markets to increase the supply Chain Management away from the United States. The United States needs to do exactly the same in 2020, and every nation will be finding for themselves. But at the end of the day, they still have to come up with the two big brothers and try to appease both of them in some way so as to not be cut out in trade with one or the other. That will be a tough story. China is doing whatever they can to revive Economic Growth. Our chinese economy is expecting growth to slow down to. 6 in 2020. They are doing whatever it takes, so they lowered import tariffs, and what does it mean . This is like a one part of the thing where they are trying to negotiate a better trade deal with the United States. Mutuallyually is beneficial. It would be beneficial for the haved states, and it could a few tense of a Percent Economic Growth in 2020. Look what happened in 2013. Chinaime when imports to hit peak levels. We could see a little bit of this. It will be mutually beneficial. Looking toward 2020. When it comes to china, they have closed off the currency flow for their citizens to move money outside the country. Everyone thinks everything is hunkydory over there, but the reality is we are continuing to think there will be deceleration of credit growth there into 2020 and 2020 one. That will have a Material Impact on Global Growth, i. E. The europeans and germany. The wash back effect is lower rates for longer. Global inflation rates that will be much lower than everyone is expecting. Overall, where do we think you go on the investment side . We think you stay overweight u. S. Equities for q1. I agree. The one thing about q1, though, the e be away from there will be serious winners and losers with this trade piece if you will. As you move supply chains away from the United States, i think you will see some countries like mexico and brazil improve greatly. Mexico exports a lot to United States, so that is a country that will benefit greatly not just from china but with the u. S. Embassy. They will benefit above canada. That is one of the places i could see improving. North america is going to improve as well as south america. What guy was talking about earlier with 5g as a security concern, that is a big weight on the european economy, the u. K. Economy and europe in general. Alix you cannot choose, then what are you going to do . Dart they are going to have to choose. That is the thing, they are going to have to choose. The best bet will be the United States, but does that hurt them in the long run . What does that is it same thing with journey with germany. Upon willets forced dictate the asset flows and equity flows. It is a tough thing for investors and cios to navigate. It will not be a lot of fun. Would say that q1 would be a rough time of the year. We will have a lot of issues, so we are halting production, and that will affect Economic Growth in the United States substantially. The inventoryfrom channel, it could take off half a percentage point from growth in the First Quarter. The even though we have new ceo and a, ok, things will be better . Yelena it takes time to work through the economy. It is a huge machine with a lot of uncertainty with respect to the trade deal. We still do not know the answers. We need to see what happens to brexit, and on top of that, we do not know how the consumers will role in the beginning of the year. Chad we still continue to believe that in the long run you are 100 correct. But in the short run you have the Federal Reserve behind the market, the ecb behind the market, the potential for a modest fiscal stimulus in the euro zone. You could see and market multiple expansion overall, but we still believe that over 2020 the eps number as well as the revenue number, the s p 500, will have to be brought drown brought down drastically. Alix why . Do you see a stalling out . Chad only a 3 growth rate across the globe for 2020 is not bad, but it is not going to support 10 Earnings Growth overall. That is why we are advising in our portfolio, we are to x industrials, but we also have on the other Side Health Care that is over rate that is overweight. It is not going to be an easy year. Alix wait, your glass half empty . Everything is terrible and horrible and the First Quarter thehe biggest bets on street are short treasuries. I think chads assessment of the environment in the Fourth Quarter is in the First Quarter is correct. The guys in treasuries will get spanked really hard in the First Quarter. Everyone going gangbusters toward the end of the year will have a rough First Quarter. Corporate profits are declining. They way they may not hold up to current levels. It does not mean you will not be doing well in the Second Quarter when you get middleclass tax cuts. The First Quarter will be a lot of rebalancing and repositioning. You will not see the returns you saw in 2019. Volatility . That will be good . That would be good if the rebalancing comes. There are good trading conditions, as my old boss would say. You are not trading, and that is why. Alix you obviously agree on a fundamental basis, but then you have the fed Balance Sheet, an amazing chart if you look at the terminal. We have seen how it is growing because of repo. Maybe things are actually ok, like the fed is somehow backstopping the system we do not know about. The repo rate is not spiking, the access to the rebuilt rate market has been the repo rate market has been falling like we do not need it. Yelena i truly believe the fed has taken care of the issue. Alix they dont need to go to the Balance Sheet that much more . Yelena they will grow it, but they will introduce this big k thing and roll the Balance Sheet in line with the economy. That will allow reserves to stay apple, but they will not need to do a q. Week to stay ample, but they will not need to do a q. Week type of thing. The fed is really good at taking care of the repo issue. I think we will kind of forget about it going into the next year. There will be other things that we will talk about with respect to the fed, which is like inflation targeting, what they are going to do in that respect, how they will modify. That is all coming next year. I do not think we will hear much in terms of policy, rate policy next year. Yelena i am chad i am completely confused when it comes to the fed. Coming in at 2. 25 was a little bit high. But overall they made a complete 180 and expanded their Balance Sheet. I understand why they did that temporarily, but they went down to 1. 5 on the fed funds rate. We are scratching her head. Now the reality is, the entire markets that we are scratching our head. Now the reality is, the entire market went up riskfree rates went down across the globe and the fed had a meaningful impact. Their mandate should not be lower volatility across all global markets. Although they do not say that, they have been acting and behaving that way. Overall, we think that is one of the critical reasons you have such a robust year this year. Alix we have to leave it there. Thank you very much. Will beganlander sticking with me. We have all the charts that we will be using throughout the show. This is bloomberg. Viviana this is uber daybreak. Emirates is the worlds biggest carrier by international traffic. Clark has been at the helm since 2003. Employer employers can more easily restrict workers from using wearing youd buttons and other insignia. This follows a ruling that limits the size of union related uniforms. Thenlrb says it affects customer Shopper Experience and store merchandise which takes precedent. The central bank of mexico could ease monetary policy, the government telling bloomberg auld telling bloomberg move would remain on risks remaining low. The central bank cutting borrowing costs by a quarterpoint. 27. 25 . Mexico still has to 7. 15 . Mexico still has a real rate that is highest in the world. Alix the home stretch for this years retail earnings, that last minute boost from shoppers. Apparently, 6 of shoppers are still buying presents today. Before 49 bought december 19, or if you are like my mother you but Christmas Gifts in the summer. 11 of americans shop in the last couple of days. And they will continue to do so on christmas and the day after christmas, and they spent over 1000 per year. Total spending should be 730 billion. And there will be a lot of returns coming in. You return, you buy more, and that is why the 26th can become a big shopping day for companies as retailers anxiously await ticket items. Boeing ousting of their ceo is being said to be that her timing than usual. This is bloomberg. Beyond the routine checkups. Beyond the notsoroutine cases. Comcast business is helping doctors provide care in whole new ways. All working with a new generation of technologies powered by our gigspeed network. Because beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected. To do the extraordinary. Take your business beyond. Alix this is bloomberg daybreak. Im alix steel. The european markets are closing right now, most of them closed. European stocks and the ftse are closing in the next few minutes. The futures look to open yet again at another record high. Enter Asset Classes here really nothing moving at all. 26 basis points. Eurodollar, it was weaker, now we are flat. Most of the bonds are not trading. Treasury market will be open until about 2 00 p. M. The vix goes nowhere, oil goes nowhere. It has been a calm apple of days, especially compared to last year in december. One stock that is on the move is boeing. Ceo, urke ousted as Dennis Muilenburg ousted as ceo. Joining me now on the phone is an Equity Research analyst. He removed the stock from his buy list in may and now has no rating. I would think that changing the ceo, a shift in that direction would be a good thing. Why the no rating now . First of all, our firm only has a buy rating or no rating. Right now we think that the stock could just kind of trade sideways for a while as we see this play out. There are still so many unknowns. It was a good step to change the ceo. I think a lot of people when the news came yesterday said what took so long. In our view, it was a difficult calculation to be made by the board. As mullen berg came under increasing scrutiny over the ,ast month, so do we keep him someone deeply entrenched in the situation and understands it and is an engineer, or do we bring in someone else who does not understand the ins and outs of the situation but who would be a major improvement from apr and Investor Relations and Crisis Management standpoint. But as far as the stock, we need to see the plane get back into the air and we need to see what happens once it does. Alix lets pretend that that happens, that we get the buyers up and running in a month. Mx 737 goes up in the air, it the max 37 the mac 737 goes up in the air and that repairs relationships. Does that respect the trauma that there is with the max . Andrew right now the bulls would say this is boeing, this company is part of a global duopoly with airbus or theyve got this eightyear backlog of these planes. Their Balance Sheets are fine, and all of these costs right now, yes, they will incur billions of dollars of costs. Suppliers and customers, but to look at that as a one time cost. The way we are thinking about it is, the situation is not really over once the planes are approved to fly again. We think that something not being talked about enough is what is the consumer response going to be once these planes are flying again . Analysts, wall street we tend to get lost in our financial models and be really focused on the numbers, but go around over the holidays and ask 10 people if they would fly in a 737 max, and i think you would be surprised i the response. Isx do you think that it realistic even that suppliers get up and running in a month in terms of technical timeline, regardless of the sentiment around the plane . You know, we think that i mean, sure, there could be the faa approval that could happen over the next few months, and we certainly think that the boeing production will be delayed for more than just a month. It will start in january and we think it will stretch on longer than that. Basically we think that all parts of the process will sort of drag on longer than expected, particularly when it comes to the approval from foreign regulatory authorities. What is their incentive to rush the process . It is not impacting their economy, so they will be as careful as possible. Production could happen once boeing production could start up again, deliveries could start once there is a better sense of the real timeline for the approvals, but in the meantime and ave got 600 suppliers thousand more subcontractors who are going to be impacted by this for sure. Alix andrew, thank you so much. Andrew kessner of william oneill. What we got with andrew is that you take the performance of boeing versus the s p and it has outperformed regardless of the issue. How do you look at Something Like boeing . Andrew as a Portfolio Manager chad as a Portfolio Manager, the best time to buy is when there is a major amount of uncertainty for 18 months out. This is a very good company overall. The Balance Sheet is quite clean. If this issue continues to monthsfor six to nine and the company goes to lower lows, that may be a viable entry point for an investor looking out three to five years and can handle a position in their portfolio that may underperform. Alix in some ways it reminds me about how the street talk about bp, when the oil happened in the gulf of mexico. The reality was that this is a huge company, they have a Balance Sheet, they are going to fix it. But as long as you had the oil flowing in the ocean, there was no way you could buy the stock. It cap going down. How do you look at the pr issues when it comes to a company that fundamentally, like a duopoly, makes sense. Chad if you look at your financial spreadsheet and i know this is cold the way i am mentioning this you have to quit the reliability. Is it a 20 million that you have to you have to question the liability. What is the forecast and the discount rate you are going to use . That is the way these Portfolio Managers and analysts are viewing it. A lot of analysts do not want to take the headline risking and stick their neck out and say this is a buy. But when it comes to investing in regard to 2020 and xdustrials, we have a two waiting in industrials. Alix so given that industrials do well, do global pmis improve or do they go down . Chad as long as they stay consistent, we think valuations make sense. Look at Companies Like General Dynamics or even United Technologies or illinois tool works. Even if you get a moderation of growth within china and global , these type of companies can do well and have less volatility than the overall market. Alix you mentioned earlier that you balance it with utilities, but utilities are expensive. How do you look at the barbell . Chad we look at Consumer Staples as well as health care. We think health care is a very good opportunity, multiple compressions and concerns about the election. Overall we look at Companies Like merck, pfizer. You want to look at companies that are consistently growing, consistently profitable. Here is the nuance. We do not Want Companies that have a lot of debt on their Balance Sheet. We are late in the cycle. You can see that highyield spreads are really tight. You want to buy the company on the Consumer Staples side like for mel. They virtually have no debt on their Balance Sheet. Isx the broader question how you think of a 6040 portfolio. Then long tlt, and bond flows. 3. Orrelation is now they are inching up to that zero, negatively correlated. What kind of returns do you expect from a 6040 manager he . Andrew we do have aad we actually do have 6040 portfolio. We think the returns could be in ish range with a 3. 5 fixed income on the long end. 6 ,re hoping to get a 5 , 7 return depending on what it brings us for 2020 and 2021. Alix so you get the fixed income exposure through Equity Dividend plays . Aad you will get it through bond portfolio. Lateral with a fouryear duration is perhaps an ideal scenario. We would go with the corporate ladder, but if you have to come you go with the tax freeze, highest quality possible. On the rising dividend component, the 60 component, we are looking for companies that are just reinvesting back into their business that are going to grow their free cash flow. In growing their free cash flow, the Dividend Growth will be there and you will get the total return of actual equity. That is what we believe over a the way that you could optimize your returns. Alix have clients reshuffled their view in terms of a 6040 portfolio, or is the expectation still a doubledigit return . Expectationk the among investors is for a doubledigit return. Equities arethat around six percent. Based on Global Growth has where on Global Growth as well as where global valuation is. Alix if you are going to want to get the yield, it is interesting, but you keep having different views. How big is the triple b universe . Chad we struggle with this. We went underweight earlier this year with regard to highyield yield. We are advising investors to be on the high rate Corporate Credit side. As long as the Federal Reserve is so dovish, where they have been extremely accommodative anytime you see Financial Stress creep into the market, there is this overreaction for monetary authorities from monetary authorities. That is what is saving the highyield market overall. As long as the global backdrop, economic th growth does n fall precipitously Economic Growth does not fall precipitously, and highyield has an overall allocation for someone separate portfolio. That for someones what folio. Alix thank you very much. Viviana hurtado is here with first word news. Viviana Prince Philip was discharged from a london hospital. A helicopter flew him to join other senior royals to celebrate a traditional family christmas. I can him palace did not reveal details of his medical treatment Buckingham Palace did not reveal details of his medical treatment. He was being treated for preexisting conditions. Joe biden is getting a boost from congress. On monday, he told the Associated Press in november mr. Biden is the democratic partys best hope for defeating donald trump. He has called the next election a matter of life and death for certain communities. Saudi arabia and kuwait agreeing to resume Oil Production in a shared order region. Since 2015 a dispute over Oil Concessions halted output from oil fields in the socalled neutral zone. The field can produce up to 500,000 barrels a day, but in makesar term opecs additions to the market unlikely. Global news 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries, i am Viviana Hurtado. This is bloomberg. Alix thank you. Coming up on the program, Adam Neumanns suite exit package could get even sweeter. More from the companys ipo. And check out tv. You can watch us online, click on charts and graphics interact directly. If you miss anything, go ahead and click on it and rewatch. This is bloomberg. Viviana im Viviana Hurtado with your Bloomberg Business flash. The u. S. Securities and Exchange Commission is prompted to put bmw under its microscope, months after the regular fines fines Fiat Chrysler 40 million over a simla problem. It also comes as the germany carmaker is in a race with daimler for the luxury auto market. Bmw says it will cooperate with the investigation. The south african conglomerate wants to expand outside its home market. The deal will add more than 100,000 customers. Phs is one of the largest bathroom floor cleaning companies in the u. K. , spain, and ireland. The president of hong kong is hunting for home residents of hong kong are hunting for homes all over the world to escape the antigovernment protests. The demonstrations have crippled the city economy and made it difficult for locals. Canada and australia are the most popular destinations. I am Viviana Hurtado and that is your bloomberg is this flash. Alix we turn to wall street b. First up, hedge are under pressure or Distressed Funds have been performing poorly for quite some time. Some hedge funds are limiting Fund Withdrawal requests. Mission. As massive wall street is aware. Aircraft carrier size Investment Banks, and newmans suite investment package. Joining us now is our guest. Lets talk about asset hedge Fund Withdrawal. They are limiting withdrawal per two are they and is this normal . We are going right into the christmas spirit. Alix we are doing it. You must keep your money here. No Merry Christmas for you. It has been a hard went to sell over the last few years. Too little distress or too much distress, yesterday makingut about sure investors cannot take their money back because they need time to unwind the fun. That is not a very pleasant fun. The last time we talked about it was back in the winter of 2015 when oil was barreling toward new lows. Frankly there is none. You have the Distressed Fund that is down about 3 . Highyield markets are up about 15 . The stock index is about 30 . What can you point to . There are too many idiosyncratic blowups. Structure where there is no cushion. There is a falling knife. Fair point. S a it blackstone ceo has the same issue, but what do you do with it . Youre also seeing the broader trend, which is actually less exemplified in a place like gsl. Even in that distressed portion, they are trying to move away and they have moved away from this model. A lot of the Credit Fund Managers out there think that is a true solution. You need time when you are investing in illiquid Asset Classes. You cannot be held to the whims of monthly or quarterly redemptions. Alix which makes sense. Our second story is that china is planning an Aircraft Carrier sized rival. What does that mean . Sachs iting to goldman is strange, but it is fascinating. The Chinese Market right now, when you look at Investment Banks, there are about 130 securities funds. But if you combine them, their Balance Sheet is the size of the trillion dollar Balance Sheet of goldman sachs. That is where we see the comparison. It is a fragmented market. China has talked about opening up its economy. You have these Large International banks ready to come and eat your lunch, so if you want to compete with us, you had better be prepared. Theyre talking about trying to combine, and china is a big market. You do not have to be a Big International player to succeed. If you are a good domestic player, you can compete with them and do pretty well. Is, they fascinated by are thinking about going toe to toe with them across the globe, and that is where i see a cautionary tale. You have to look like some look at some buddy like deutsche bank. They expanded at somebody like deutsche bank. They expanded. Now they are on the retreat. So are the european banks. Lets get to the last story, which is Adam Neumanns exit package could even get better. Seriously . Fair. Have to be there is one that says adam neumann is the founder, he built this company to one of the greatest start up stories of our time, and with reduce valuation, he still that with reduce valuation, he still held up the company. The counter to that is that companies that become successful on the back of one person you had an incredible gush of cash from softbank, you had that money that has allowed him to hire thousands of people, expanded, so when the fortunes go south and you have the founder walking away with a sweet package, at least 2500 people laid off, or possibly that forces you to ask these questions. Alix we appreciate chatting with you. And off the beaten street, critics can also be customers. Bernie sanders has spoken out against economic practices, but president ial hopefuls are also giving online retailers plenty of business. The eight leading Democratic Candidates and President Trump 600,000 onnt amazon, most of that going to Office Supplies and how do you come up with those stats . Love that. In 2001, we have seen the fed change rates or than 40 times in since 20012001, we have seen the fed change rates more than 40 times. Will they do the same in 2020 . This is bloomberg. Alix time now for traders if you listen to vince enough for traders take. He is wearing a snowman that lights up and blinks. That is great happy holidays, everybody. What are you looking at today . Are you going more macro . This is the time of year where trying to pick trades is not the smart thing to do because nobody really knows what to do. One of the themes that has been recurring since the last fomc meeting is this belief Going Forward that everyone thinks the fed is on hold for 2020. What the fed has done since december of 2001 is they have changed the said funds rate 42 times. Now, they where we are effective rate is 155. In december of 2001, the fed funds rate was 1. 75 . To think that the fed is going to hold course in 2020 and do nothing i think is a fools dream. I think it will move depending on what the economy does. If it heats up again, we will be done with this new term cycle adjustment and we will be back on a heightened cycle. If the economy falters, i think they will continue with the theme of adjustment and bull rates again. To thehat does that due psychology of trading when the fed is on hold . Vince i think it will be a little bit choppy. I think it will not stay as low as it has been. There is an opportunity to see it up. You are going to get full. Morning,aid this previous segment, i am confused, i dont know what to think about the fed. Think people need to take that view and they should be confused because the fed is not that clear. The more transparent they are, the better, and it is something to look out for. Alix Merry Christmas. Can that blink faster, by the way . Vince it does, but alix coming up, kim forrest will be joining us. 5g story. Tech and the we will break it down. This is bloomberg. Alix welcome to bloomberg daybreak on this tuesday, december 24. I am alix steel. I hope to build a new era of three kingdoms with china and south korea through cooperation. President h korean moon jaein and japanese Prime Minister shinzo abe meet with chinas xi jinping. The nations are spreading over historical disputes back to world war ii. The chinese economy is resilient. The Chinese Market is huge. We are determined to open further. Alix the chinese premier promises to open the financial and Health Care Sectors to foreign investment. There are going to be further cuts to the amount of cash banks have to keep in reserve. Lendwill free up funds to to the private sector, which is a huge part of the economy china needs to shore up. Alix downward pressure on the chinese economy, blaming a complicated economic and political situation good tesla trades over 420. China agrees to a 1. 4 billion loan for teslas shanghai factory. It underscores elon musks plan to boost sales in the Worlds Largest auto market. Alix it was the price that tesla picked at which would go private, apparently to make a weed joke. Musk tweeted yesterday, the stock is so high. The board holds ceo Dennis Muilenburg accountable, saying a change of leadership was necessary to restore confidence in the company. Priority is to get the 737 max approved. Alix boeing said it would temporarily halt production of the 737 max. No surprise, not a lot of action within the markets. European equity markets are closed. The bond markets are mostly closed in europe. Here in the u. S. , equities close at 1 00, bond markets close at 2 00. The ghost of christmas past is not worrying investors this month. Investors avoided that 15 selloff that haunted last year. Kim. Ng me is we have a chart showing the return of 2019. It was basically buy everything. Everything did well. What do you sell going into the new year . Kim i think you have to look at your individual portfolios and look at your overweight positions. Anything that is probably over 5 or 6 , give it a haircut. Just because you like a company doesnt mean you want to let it overwhelmed your portfolio. Think about this and sell it after the new year if you are concerned about taxes. If it is in your 401 k , sell it now. Alix if you feel better about Global Growth or feel like 2020 is going to be ok, why not just hold onto it . Kim what you are trying to do portfolio. Your just make it a smaller percentage. You can put that money back to work in names you think cap more promise in the future. Have more promise in the future. Everyone loved boeing couple of years ago. They hit some turbulence. I had to use it. They have hit some problems. It is a great company. You want it for the long haul, but the you want it to be 10 of your portfolio . You dont want anything to be 10 of your portfolio. Alix we will get more into boeing in just a second. For a broader macro basis inside 2020, im showing Global Manufacturing charts. Eurozone, u. S. , china all off of lows forp pmis. Two things need to get better or just stop getting bad . Stop getting back, and a little more trade. It looks like we have these conditions going on because the pmis around the world have stopped declining if not turned around. This whole trade deal that seems to be going to complete between the u. S. And china, at least the first round, i think that could let enough pressure off to let growth come back to some regions that really need it, namely europe and china. Alix where in the world would you want to be putting that money . If you look at the msci all country index global earnings revision, they have revised lower and lower for 2019. At some point you will end up Getting Better comps next year, but the earnings picture does not look great. Where can you get the earnings pick up . Im emerging markets have disappointed over the last couple of years. Returning, and especially if you believe growth is going to return in china, china is a big buyer of products from the emerging markets, and that would be things like basic materials, copper, iron. That could really benefit in this next year if you believe china is going to lead back to growth. Alix do you want to position a portfolio for more risk, or is it safeguarding against not also returns . Kim a little bit of both, right . It depends on where you are in your life cycle of investing and what your cash needs are. You need to talk to your advisor. Aremoney that you think you going to use in 10 years, that should have a fair amount of risk in it. That is what you are putting it to work for. Harvesting has to be less risky. Put that time component in, not just risk. Alix do you feel like the t . Reet has rated for that you know, here is the funny thing about the market. Without this year was going to be just ok. It has been great. It has been really great. I dont think anybody knows what the future is going to bring. There could be some momentous positive thing that just causes the market to melt up. I have no idea what that is. You just need to be prepared to adjust and be nimble. I know that is not really an answer, but because you are asking about the future, you need to always think about your portfolio. Alix does that mean you should have more money in money market funds or just cash . Or does it mean be more nimble in your positions . Kim exactly, yes. Having a little pin money set aside, maybe 3 for that rainy day where you need to withdraw, but also debatable to deploy it if you find that really good bargain. Please dont over depend on anyone stop. Your stocks know you own them, and they will kind of hate you, and they will behave badly at times. Im kidding. Stuff happens. Alix that is great, sort of like your children. They love you, but they hit you at the same time. Deeper into to get different sectors throughout the hour. As you are looking at 2020, what is the biggest risk . Is it an unknown, and election, the train battle . Trade battle . Kim the election is going to unwind slowly. Slowly because of that moving throughout the year, that is not a big risk at this point. I think it is those unknowns. That would be more geopolitical risk. Kim forrest, you will be with me throughout the hour. Will the 737 max get back in the air any faster . I will be discussing with a former ntsb chairman next. This is bloomberg. Berg. Alix the 737 max remains grounded. Will the Management Change of speed up the recertification process . Joining me on the phone is jim hall, former ntsb chairman. With all the work you have done in this world, is the ceo change that material . Jim i think leadership at the top of any organization is extremely important. Im hopeful in this case that it will help repair the damaged relations between the faa and boeing and help move the recertification process forward. Alix what did you make of the damage that has been done between boeing and the faa . It is unprecedented. How do you prepare Something Like that . Repair Something Like that . Jim it is going to take a lot of work and transparency. This started in 2000 with boeings attempt to move towards Self Certification of the aircraft. That has resulted with their ability to get congress to provide them with that Self Certification and put us in the mess we are in. I dont know how many books are going to be written on the failures in this process since the unfortunate crash of the first boeing max. Alix how do they do it . Is it confidence . Is it time . Is it concessions . Jim first, i would hope that will certainly make available all information in regard to the boeing max development. If there is any decent paper left at boeing that has not been shared with the federal faa, heors and with the needs to be sure that is done. That triple effect has had a tremendous detriment to getting this aircraft back in the air. Alix have there been other cases of a Transportation Company that has had this much scrutiny and from a round it and used it to benefit and actually excelled . Jim yes, in my experience. I had a number of accidents and events with twa 800 with u. S. 27, with27, with 4 alaska airlines. Airlines,e of alaska they did an outstanding job of addressing their internal situation and came out stronger than ever. It is certainly not unprecedented. Ofing is at a level in terms manufacturing and worldwide they probably stand alone at this point as someone who has put themselves in this big of a hole. Alix appreciate your time and perspective, jim hall. Kim forrest still with me. You talked earlier about how if boeing is part of your portfolio, you should be selling positions. At a companyok like boeing that still outperforms the s p despite the trauma . Kim i hate to say this word because it is very political, but it is a monopoly or at least duopoly. Boeing and airbus are the two games in town for larger aircraft. Duopoly. To make it even more political, it is extremely difficult for airlines to move off of one platform to another. There is training, spare parts, all the safety process that is built around the actual manufacturers specifications, and there is a lot of work that goes into it. It is not like you are going to say, im going to buy a chevy next time. I dont like that forward. That being that ford. That being said, you have to look at these companies and ask if they really understand their role. Boeing has demonstrated that through decades. They have to return to that. Safety is their number one objective. Alix if the boeing duopoly thing is going to vote true, is there a derivative trade to be made on the suppliers . Kim i think you can make a reasonable assumption that everybody wants the max back in the air. The regular readers regulators want it. The Political Class want it. This is one of the biggest exports america has. It is a flagship product. I think everybody is pulling for this company. To do thattle late lowigh, by low thing buy thing now. You can look at the suppliers and see if any of the suppliers on the 737 max, look at them. Alix coming up, we will take a look at how tech will do in 2020 from Cloud Computing to security to 5g. This is bloomberg. Viviana this is bloomberg daybreak. A majority stake in the business could be worth more than 10 billion. The president of everett airlines plans to retire in june according to a spokesperson. They are the worlds biggest carrier. Since 2003, clark has been at the helm. Easilyrs can more restrict workers from wearing items at work. Tech has been leading the rally this year. Is bloombergw Intelligence Software and i. T. Services Senior Analyst. It has all been about the cloud. Microsofte done well, is just crushing it. Walk me through the growth of these companies. The transition from on premise to the cloud has been going for several years. We have seen an acceleration for the past several years. Companies are moving their applications from on premise applications to cloud applications such as workday. Those are the secular shift. It has picked up a lot of steam in the last two to four years. See growthntinue to rate. The transition to cloud has a number of years to follow. Bethink next it is going to tough for them to keep up with that same pace we have seen over the last three years. That is largely because we are getting into the law of large numbers. With think the macroeconomic issues in asia and europe, all of this will hold people to making large soft purchases. This could dent the growth rates of the software world. Software has the highest return on investment. We dont see that falling off a cliff. Alix if you take microsoft for example, when you have deceleration in cloud revenue, but it is still growing, is that what is going to be good about microsoft . Really well diversified. Much more diversified than any other company in the large tech space. We think they have very critical products, whether it is office or cloud infrastructure. You should not see massive differences in the way they show growth rates going into moderation. Alix boca capital partners, do you like microsoft . In what way . The i agree with a lot of things that your Senior Analyst has pointed out. Probably the biggest thing that the reason why i really like microsoft and the move to the cloud is that many of its larger customers, we will say the global 2000 customers has built large parts of its businesses on microsoft products, using their programming tools. It is so easy to add a cloud to that with those programming tools. Thesek the move to internally produced applications is in its infancy right now to move that to the cloud. That is still a huge area of growth for the company. Think the margins should get better. Whenever you are building out aredata centers, you spending a huge amount of money, but you will get profitability when those data centers are coming up. Alix you are nodding with that. The hybrid strategy microsoft has has set them apart from amazon or google. That is going to be the case years, they have invested aggressively into this cloud infrastructure. Margin seen massive expansion. Alix what are the derivative place . Plays . There are a lot of Cloud Companies out there. Cloud has a decent portfolio. Salesforce is not the largest Cloud Company when it comes to applications, but they have a fairly well diversified portfolio of cloud assets. Workday is one of the best breeds out there. It is dependent on large clients making these gigantic purchases. If some of that gets pushed out because of economics, they could see tapering of their growth rate. Salesforce should be able to produce the same 15 organic growth going into downturn. Alix what are the tech themes you want to be playing going into 2020 . Im i love the rollout of 5g it is going to be global. We dont know how big it is going to be because we dont know the applications that are going to run on it, but something is. It solves a lot of problems. I think internet of things becomes a thing. More and more of the semiconductor plays are going to benefit because we dont know what the end use is, but we know it is going to be delivered i70 connector semiconductor. That is where i go for my derivative play on the cloud. It is not only enabling the cloud to be the cloud. It runs on semiconductors. The stuff we dont even know we want to connect to the cloud like doorbells, all of that runs on semiconductors. Iternet of things, 5g, enables each other. Alix any regulatory issues when it comes to this space . The elections are going to be very interesting in that space. The Biggest Company from amazon, facebook, google, they are large and powerful when it comes to customer data. As we go through the election year, this will be front and center for all tech next year. Alix thank you so much. Bocaorrest at capita capital partners, you will be staying with me. What the fallout will be and what it means for the energy sector. 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 this is bloomberg daybreak. I am alix steel. European markets are closed. U. S. Equities will be open at 9 30 until 1 00. The bond market closes at 2 00. Not a lot of movement. Light volume. Volume letter yesterday. Even lighter today. In other Asset Classes, not seeing a lot of movement. Muted movement in the fx market. You are seeing the vix around 1213. Crewed up. 4 . Staying with commodities, as we close the year, many shipping companies are preparing for a new year as i am out 2020 is set to take effect. 2020 isa clip as imo said to take effect. Heres a look at these new rules. Rules give container up as much pollution a 750 million cars. That is about to change. New International Maritime rules there is a grace. , but the rules are here to stay in you cannot cheat. If you do, you pay a fine. Here are your options if you are a shipper. You can buy in exhaust gas cleaning scrubber which cleans out the sulfur dioxide. Openloop scrubbers release a sludge into the ocean. The problem is certain countries like china and singapore are banning them and they come at a high price. Million. N to 4 lows software imo compliance fuels. Analysts say the demand for these could grow by as much as 2 Million Barrels a day. The problem is supply. Refiners can run u. S. Light crude and get diesel, potentially creating a clot, or they can choose heavy sour crude to get more diesel. That is in tight supply. The result is not enough product , and potentially high diesel margins. The new rules could add 2 billion onto its annual fuel bill. Ok for a company with a market cap of 30 billion, but a dealbreaker for smaller firms. The result is some shippers lose money or go bankrupt, while others see their business boom moving more products around the world. Crude and product spreads go haywire and vessels turns alternative products like lng. Imo 2020u slice it, has the power to change the shipping world. Alix i recently caught up with Ardmore Shipping Company ceo who calls the company the taxicab of the shipping industry and asked him how prepared the company was for imo 2020. Some traders are speculating and stockpiling, but if you talk to people in the industry who handle the feeling of the ships, they are waiting for the demand. Once the demand comes, they will source the product. At that point it might be too late. We think the demand for gas oil will be higher than people anticipate and that will result in cargo movement. Alix tankers will not want to retire their fleet to upgrade a new scrubber and take advantage of the higher rates. Where are you seeing that and what is the implication january 1 . Anthony ships will go past the chinese repair yard or they were going to do business and continue on. In reality, even at 100,000 a day, theyre probably believing 7 million on the table. As a consequence, there will be fewer scrubber insulation which means more demand for compliant fuel. Demand foruch more gas oil are you thinking about verses eight months ago. It could be anthony it could be significant. When tanker rates are strong ships speed up. When they speed up they burn fuel. We have events which could culminate in demand for gas oil. Alix walk me through the meeting for your business. Anthony we like to say our ships are the taxicabs of the world tanker fleet and we go where we are needed i the oil traders. Is higherans for us refinery input, it is going to be very disruptive and resulting price volatility on a local gas oilt also means will be a demand. That needs to go somewhere. There is going to be a big issue around what to do with the oilfield. Refineries will be reprocessing it to break it down into marketable products, but a lot of it will get stored and shipped back to the middle east for Power Generation and other places. We think there will be a fairly around moving the old fuel away. Alix where you see the biggest dislocation as that thesis plays out . Anthony the point weve been making for a couple years is the capacity for production is there, but it is not in the right location. Northern europe is always short diesel. The imo 2020 switch is going to make that shortfall much larger. Some of it might come in from the u. S. Gulf, but a lot is coming in from the far east. Singapore is not short diesel. That will be coming from north asia and the middle east. It is a scrambling and dislocation that we think could take the better part of a year or longer to get back to equilibrium. Alix that was my interview with anthony gurney, ardmore shipping ceo. Watch the latest episode of bloomberg commodities edge at thursday. Still with me is kim forrest. I use the set up to ask you about energy. Oil price has drastically underperformed. No one wants to own energy stocks. Will 2020 be different . Kim i dont think so. From what that guy said in the last segment, it looks like there are some dislocations, but overall the amount of energy is still oversupplied. That is the problem. There is too many suppliers who have debt, especially in the u. S. , and they have to pay the debt and keep drilling and making their products and selling it at whatever price. It may not be economic. That is a dangerous time to own a company. While i think there will be consolidation, it is unclear who the winners are in this scenario. Waiter in a watchful the energy sector. Alix do you think you can still sell energy at this point or you just need to hold if you have it or sit on the sidelines if you do not . Kim i would sit on the sidelines if you do not and take a good look at my portfolio. If the debt seems too onerous, that is something i would sell. Know what management will be forced to do to resolve that debt. When you look at the forward curve and the dislike of energy stocks, there is a narrative that a large part of that has to do with the Energy Transition and co2 emissions and not wanting to buy a company that produces oil. Do you play this environmental co2 clean Energy Transition theme at all . Kim we stay away from it because we think it is burning things. Fuels is here for a longer time than anyone anticipates. Look at electric cars. People like electric cars. It makes them feel good. It is a clean car. Somewhere, it is likely something is being burnt to generate that electricity. In the u. S. It is probably natural gas, which is cleaner and less co2 producing but it is still burning and how the infrastructure is built and it is hard to switch over renewable sources without great battery technology. That is what everyone of the world is looking for, the next step up in battery where we can store solar and wind power and use it later. Kim forrest will be sticking with me. Now i want to give an update on what is making at lines outside the business world. Viviana hurtado is here. Viviana this month the Trump Administration awarded billions of dollars in contracts to private companies to upper great emirate who operate immigrant detention centers. This just before californias move to ban detention centers. China, japan, and south korea with the three reader ready their commitment with the three reader rating their commitment to ending north Koreas Nuclear program. Free trade and cooperation were also on the agenda. The hoste urging country to ensure the South China Sea is an sea of peace. There is worry north korea could be planning a rocket or missile reportedlyr imagery showed the construction. Pyongyang is seeking concessions with stolt nuclear relations with United States. Giftned of a christmas the United States based on the action the u. S. Takes. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am Viviana Hurtado. This is bloomberg. Viviana this is bloomberg daybreak. Im Viviana Hurtado. Hilton is hosting a new hotel brand here at young professionals. It will feature a Lifestyle Content that focuses on modern design. A bar and restaurant will target urban travelers. As soon as february, mexicos Central Bank Monetary policy. Bloomberg a telling boom would depend on name of at 7. 20 5 ,r mexico has one of the highest real rates in the world. China wants to create its own massive Investment Bank to compete with wall street giants. The nations market faces consolidation with more than 130 security firms competing for business. As manysachs controls assets as all of them combined. Next year china is said to fully open its 45 trillion financial industry to foreign competition. I am Viviana Hurtado. That is your Bloomberg Business flash. Alix time for bottom line where we look at Companies Worth watching this morning. Today we will take a drill down into industrials. Boeing has struggled this year. Industrial stocks continued outperform. Helping us answer that question ubelhart and kim forrest. What do you make of the industrials continuing to deliver and continuing to outperform . Karen i think there is eight the worst is over kind of thinking. People do not want to miss the rebound. There is some differentiation that the more defensive ones have outperformed the cyclicals like the machinery companies. They got whacked pretty badly in the Fourth Quarter. People are hopeful on trade. Things have stabilized. Earnings performance was not as bad as people expected. I am surprised stocks are up as much as they are. If you take a look at global pmis, where we are in europe, where we are in the u. S. , what kind of earnings is it reflected . If we stabilize do we get an uptick in industrial earnings . Kim companies have been probed karen companies have been proactive in cutting costs so the earnings disappointment has not been so in those regions. , we will have negative organic growth at least through the first half. Alix if they need to preserve margins more, what companies have more levers to pull . Then the machinery cyclicals can cut production significantly. They have already been aggressive on costcutting. I would say the multis have done some cutting but they probably still have more. I feel like when caterpillar warned two years ago about the relationship about the , this is a caterpillar retailer statistic from all over the world. The uptick is from asiapacific, but Everything Else is still rolling over. What does this tell you . It tells you caterpillar has to cut construction more. There is still risk to the downside. The other number is minors is mining, and mining has fallen off a cliff. That is manufacturing related. The rental market is starting to cut capital spending. One good piece of news and construction is housing. Interest rates have started to turn the housing market. That is the one glimmer. Nonrisk is ok but it is slower. Alix we already mentioned boeing. Where in industrials do you feel has the most . Kim i would agree to stay away from the construction area, like your analyst was saying, but i would look more towards robotics for automating production lines. Is as like rockwell u. S. Based automation expert. I think that would be a place to look. Again, we are looking for productivity enhancing industrials. That would be the screen i would run. Alix you measure how much exposure they have like karen was talking about . It kind of cuts through the middle because what you are doing is selling other people making things. It could be your automating something that goes to a consumer as opposed to something that goes to businesses. Those companies could be more flexible than somebody that is mining focused. Alix how you look at trade . If you have china coming in and buying billions of dollars of big purchases from the u. S. , how does that trickle down into the industrial world . Karen china is the largest importer of soybeans. If those trade tensions ease, and they have, our exports are down over 50 to china, so it will take a bit to get back to where it was and get the farmer confident enough to buy. Every time we get trade the stocks do better. We are a long way to getting normalized volume in and out of china. Alix does that mean even if we get back to normalized levels, there is already good news bacon . Already good news baked in . Particularly on caterpillar and anything that has a big trade influence, they popped on that. I would say it will unroll slowly. We have taken a lot of the soybean exports we did in the past, and that will not come back tomorrow. For agriculture, i think will be a slow recovery. Any incremental help is good. , is in a broader trade question of how do you play trade . If the good news is bacon right away, how you ever is baked in right away, how do ever profit . Can you can drive you drive your timeline as opposed to trying to target one year. Way. Is one you can watch for the stocks to drop after the good news and have a much longer timeline than the rest of the street. I think you could win. Not only on taxes. Monthsg you own over 12 has longterm Capital Gains as opposed your income if it is a taxable account. That is always something you need to think about. You might also want to go down market and if youre interested in agriculture and think it is coming back next year due to trade, you could look at the companies that provide fertilizer and do it that way, although that is not industrials, that is still into the trade issue. How does thealix 2020 election or risks in 20 in general affect the sector . Kim the election karen the election is a wildcard. What has happened with a lower tax rate has been a help to these companies. Some uncertainty around the election will drive this because we have two extremes on both parties. I think that will be an uncertain factor this year. Alix are we waiting for more consolidation in the space to take place . Certain sectors you will still see. In the machinery sector, we have a consolidated space, a handful in construction, a handful in mining. S, that is one space where people think there will be consolidation. In the broader space, companies have been simplifying. There is a narrowing of scope. I think will be interesting in this next downturn how this companies that were diversified, how they will do in a downturn. Alix and how we will have this conversation and however many years to say they should diversify. It is called cyclicality. Ladies, thank you very much. And coming up on this Christmas Eve, protesters are clashing with police in hong kong. More on the tension and the escalation. If youre heading out and jumping in your car, tune into Bloomberg Radio heard across the u. S. On sirius xm channel 119 on the bloomberg gap. On the bloomberg app. This is bloomberg. Alix we want to take you to hong kong. Protesters have been classing clashing with right police. Beenemonstrations have taking place during the busy Christmas Eve shopping period. First started more than six months ago. They were triggered by controversial extradition bill which was eventually shelved. That turned into a Bigger Movement which saw an increase in prodemocracy candidates and greater calls for independence from the mainland. As that disruption drags on, local residents have been eyeing homes all over the world. Real estate brokers from australia to canada have been seeing a surgeon interest with the desire to secure a safer future of the Asian Financial hub. We will continue to monitor the live pictures and bring you updates if there is an escalation in the violence. That does it for bloomberg daybreak americas. Coming up, i will be joined by Thierry Wizman on this Christmas Eve where you are not seeing a lot of movement wherever you look at it. Europe is already closed. In the u. S. , s p futures sitting right on the record. Another potential record high for the index. In other Asset Classes, not a lot of movement. Youre still seeing the perp settle down. The vix goes nowhere. A little bit of a stronger dollar on the margin in the g10 space and crude up. 4 despite the fact that saudi arabia and kuwait are reopening the neutral zone. Ignoring that as we settle into the last trading day before christmas. This is bloomberg. What are you doing back there, junior . Since were obviously lost, im rescheduling my Xfinity Customer Service appointment. Ah, relax. I got this. Which gps are you using anyway . A Little Something called instinct. Been using it for years. Yeah, thats what im afraid of. He knows exactly where were going. My whole body is a compass. Oh boy. The my account app makes todays Xfinity Customer Service simple, easy, awesome. Not my thing. From new york city for our viewers worldwide, i am alix steel in for jonathan ferro. The count down the open starts right now. Alix coming up, no ghost of christmas past. The stock market avoids the 15 selloff that haunted december last year. Now what . Corporate bonds on track for their best return to kate leaving many fearing your best return in a decade. Dan ives joins us later in the hour. What you need to know is nothing is moving in this market. Yes you have s p futures looking like will open on another record high for s p but not seeing Much Movement in the currency market or the bond market. We begin with the big issue. Markets grinding higher as major risk events fade into the rearview mirror. You have all the ingredients for a classic melt up. Melt up. Melt up scenario in the first half of the year