That makes it the choice for many u. K. Citizens seeking to retain an eu passport. The busiest month for u. K. Application for february and march ahead of the original march 31 deadline for the u. K. To leave the eu. In seattle, Public Schools say they will exclude kids from classes but are not if they are not vaccinated after the winter holiday. The moves come as Washington State lawmakers voted to get rid of an exemption for the measles vaccine after two outbreaks sick and 87 people and forced a state of emergency. Global news 24 hours a day, onair, and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Im mark crumpton. This is bloomberg. Live from bloomberg World Headquarters in new york, i am vonnie quinn. We are joined by a our bloomberg and Bnn Bloomberg audiences. Here are our top stories. The santa claus effect. Traders assessing and equity rally that has added more than 5 trillion dollars to the market this year. With that last into 2020 . Chinas record year of Corporate Bonds default, but dont call it a crisis. It is a plan. Banking blues. Financial institutions around the world are unveiling the biggest rounds of job cuts in years. We will explore what is driving the move. Minutes in a next 30 here and we are halfway through a quieter friday trading session. After a couple of days of vacation in europe, back to low volume. Holding on to the gains that we made. 3450 on the s p 500. Some money going into treasuries , 10year at 1. 87. Crude oil has been a little volatile today. Inventories showed a massive drawdown, 5 million barrels. 61. 67 a barrel. Down 0. 6 , but year to date, up almost 83 . According to one analyst, it will continue outperforming its mega cap tech peers next year. Gene munster is one of the wrotenown apple analysts, the apple iphone maker could chase another 20 gains, and that is thanks to things like we the buds and valuations. Joining us with her outlook for 2020 is tengler Wealth Management chief Investment Officer nancy tengler. More and more the last few days, since the phase one of the trade deal has been outlined, people are saying there is lots more to go in the rally. Are you one of those . Im optimistic. I dont know if there is lots to go. One of the important things that many people are not talking about is there is a lot of liquidity built up in money market accounts, etc. , growing at 10. 5 per year, all the while that stocks are rallying. That is good news for investors because it means there is money on the sidelines to drive the next leg in this bull market. You put that would money to work, what are you telling your managers, clients . Nancy we put it in a couple of places. We went well overweight in cyclicals in june, driven mostly by our technology holdings. We still like that trade. Capex has grown dramatically in the last 20 years, up. 5 , old 25 , all the while industrial is going down. We like some of the cyber cloud the largera lot of Tech Companies that pay a dividend. We are also putting our clients money to work in convertible securities. Hinte give us more of a where in convertible securities. Nancy we have our own strategy and we invest in convertibles and convertible preferred. That is just taking off about 4 of income for our clients. Kicker on theity upside and downside, but provides pretty good protection in down markets. I think it will be hard to make money in bonds with yields were they are. We still love largecap u. S. Equities, dipping our toes into the international market. Vonnie there must be a few things keeping you awake at night. Bullisht to the aaii measure, which has gone up to 40 from 99, typically a contrarian indicator. Moving up means we should be more worried. Nancy that bothers me. The second thing is the run and stocks like tesla and apple at the end of the year, whether it is Short Covering our windowdressing. We think they have borrowed a lot of total return from next year. I love apple, i wrote a piece last january, when they warned, is apple soft . We thought not. We have been selling it aggressively in the last couple of months. Some of those outside moves are worrisome to me. Vonnie are there stocks that you think are undervalued, if you think stocks like apple are overvalued at this point . With our sales of apple, we have been adding to broadcom, initiated positions in the peloton networks, sales force. We have been staying in the tech space. Some of the consumer discretionarys have been forced out. You have to really pick and choose. With our sales of apple, we have been addinghome depot i. We are exposed to energy what kind of on the sidelines. The cyclical trade i know everyone is talking about it. We are going to let things settle for the time being. Vonnie how are you talking to your clients about the election, campaign . I presume it is on clients minds already. Nancy it is. It is starting to firm up. When we had dozens of democratic candidates, it was hard to even get a sense of where the primary is going. Think, are down to, i six. It looks like joe biden is still in the lead, probably a little friendlier for business. We pay attention, but i always dont investnts, in politics. Stocks can go up in democratic or republican administrations. We are watching for what it means for health care, for example, and some of the other spaces. Internet providers, which are now communication services. We are concerned about those companies, have been for a long time. Vonnie where do you think yields will go . Equities are where you are putting most of your cash, but you must be keeping and i on u. S. Treasuries. Nancy if the fed is on the sidelines for the next 12 months which they usually are they usually dont raise in an election year. In one of the previous segments i thought someone say maybe there would be one cut, but nobody was planning on an increase. We are in the same camp. If thats the case, we dont expect yields to be the dramatic story, which is why we are putting our clients fixed allocation it convertible securities, to get more yield and appreciation. We think bond yields are likely to go up modestly. But it will not be the robust kind of opportunity bonds have been over the last 35 years. Vonnie nancy, thank you for joining us from scottsdale, arizona. Moving to credit. China posted another year a record Corporate Bonds. It is not a crisis but a plan, apparently. They are letting a wave of bond defaults have been. Peter coy joins us now. Peter is doing some excellent work on these defaults. For context, how much are they going off relative to history . Peter 2018 was a big increase in corporate defaults. 2019 is only marginally higher that it is continuing that trend. To, fromle you refer hong kong, as you said in your intro, china has had to failing corporations for years, but it was just that it was never made public. They would find ways to pay for it over, hide things. Now they are saying, if you want to have a functioning market economy, which china does, at least on some level, you have to let the process work. The today, by the way, Planning Agency put out a draft rule on how to regularize those defaults so they had been in a methodical, organized way. Vonnie it is so interesting because the u. S. Government would have been in this position back in the financial crisis, almost choosing which banks to let fail. How does china go about the process . I will not say china has overcome its crony capitalism problems, where there are certain favored companies, state owned enterprises in key sectors. They probably will not be allowed to fail. But even in a state owned sector, there have been some failures. One of the biggest was just this month, a company that was in commodities, infrastructure. It went belly up. The biggest loss for dollar bonds for any Chinese State owned enterprise in at least two decades. Vonnie who owns these bonds . Have we looked into the defaults, seeing who is suffering the most, domestic investors, momandpop, Foreign Investors . Peter part of this new rule is to make it so that the companies that default are defaulting should default are defaulting. Onshore, domestic chinese bonds were more likely to suffer losses there the offshore, dollar bonds. You would also see companies that the state owned would be more protected than the private companies. That is part of the rule change. What happens is, investors will need to understand Balance Sheets and income statements, cash flow statements in china, the way they would any other country, rather than some sort of blanket assurance. Vonnie peter coy, thank you. 2019european banks hit hard in as trade disputes and economic revenue eat further into jobs. This is bloomberg. Vonnie this is bloomberg markets. Im vonnie quinn in new york. The white house is reportedly telling the u. K. Government that its fiveawei access to g network will provide a risk to British Secret intelligence services. The reporting citing an interview with a security advisor robert obrien. U. S. Government Officials Say huawei could use their shea of the growing Telecom Market to spy for beijing. The house called huawei and zte potential threats to national security. Concerns have gotten worse as companies prepared to spend on 5g technology. Governments are wary of using for technology, a concern for many fractures could hand over information to their home countries. Vodafone is said to have found and fixed backdoors on huawei equipment, used in the carriers italian business. The u. S. Has called on allies not to use huawei to build their five g networks. At that. Balked the u. S. Has also made it tougher for huawei to sell here and to buy parts from suppliers. At that. Banks around the world are unveiling the biggest round of job cuts in four years as they slash costs due to a slowing economy and adapt to digital technology. Morgan stanley is the latest to make a year and efficiency push, cutting about 1500 jobs. Come even ass having their best run since 1997 in the u. S. Job market that stock market. Here to explain is sonali basak. Massive round of job cuts, how many and having their best run since 1997 in the u. S. Job market that stock market. Where . About 6000 worldwide, 80 in europe. Not surprising given the troubles we are seeing, but the u. S. Banks cutting jobs is a big deal. After 2018 18, record profitability for so many banks. A lot are preparing for what could be tougher times ahead while also trying to improve the bottom line as investors want. There is a race going on among these top ranks. Vonnie are they cutting entire divisions, units, or just parent what they have . What they have. One area that is interesting is how much room there is to cut in the trading divisions. For years, we have seen of equitiesacation of equities desk one desk and goldman sachs, 500 people, down to three people. There is still some room as people see fixed income markets open to electronic vacation for the first time in a significant way. Vonnie how much is due to cations . Icifi sonali we talked about trading, retail, Wealth Management. If youre under a certain amount in assets, banks expect you to use more robust services. The richest will rely on it financial advisor. The people that do deals every day are the people that we dont see a lot of disruption from yet, but even there there is a lot of room to run. Vonnie i know a lot of these jobs are in europe, so a slightly different conversation, but record stock market, and we have had a phenomenal amount of deals. You would think banks are literally their way to the bank. Sonali you would think banks jpn sachs are among the best performers in the job market. They have announced not announced job cuts yet, but will day . A lot of these banks are smaller to begin with. Financial services is not as attractive to future job prospects, candidates as technology, for example. If you are in Business School student looking at goldman, jpmorgan, morgan stanley, and you see thes these job cuts coming, do you want to go there . Vonnie it would play into your consideration, as would declining bonuses. A lot of this is happening in europe. Do some european banks need to go away . Seems like we never solved the banking crisis in germany. Sonali a lot of people blame it on the regulation. The reaction to prices was also different. These banks never really recovered. Hsbc did add jobs, and now they are on the verge of cutting thousands. Sonali a lot of people blame it on the regulation. The reaction to prices was also should there be less banks . Investors believe so. How would that happen . Through consolidation. Is that an easy answer . Absolutely not. Vonnie you will be on the case in 2020. That is sonali bassett, thank you. Amazon has been disrupting businesses from grocery to health care. The cigna ceo tells us why he views the ecommerce giant as a big competitor in the insurance space. This is bloomberg. Vonnie this is bloomberg markets. Im vonnie quinn in new york. Cigna ceo David Cordani says amazon is a formidable competitor that could pose a threat to the company in the future, but for now is more friend and foe. I spoke with him october 31. Amazon is a formidable competitor in any space they decide to be in. More broadly, they are indicative of the pace of change needed from an innovation standpoint. As we looked at amazon and the past, i spoke publicly, we see them as much as a competitor as we do a potential partner. We partner with them today. We have a number one search you compared it to be the undisputed partner of choice. We partner with competitor health plans, positions, Technology Organizations to drive shared innovation on a go forward basis. We look forward to continue to do so. We look at amazon as more of a partner and innovation partner am a potentially competitor, but the marketplace will continue to change. A long we innovate with new programs, our embarq program, which is unique for gene therapies, we will have plenty of opportunity to grow for our clients, shareholders. Do you think there is a sense within the Investor Community that this is a cloud that hangs over the business, the share price . Do you need to see it happen to be able to, for the market to fully price what the Competitive Landscape will look like . You thatcannot give specific answer, i appreciate the way you ask the question. I dont project the marketplace t, as you for an i reference it. Our space is going through reformatting, specifically , clients,dividuals those who finance a large portion of the equation, health plans, the more value. There is a press for more innovation. Medicaler the lowest cost trend in the industry for eight years in a row, lowest pharmacy trend. The only company to grow organic members or customers 10 years in a row. Continuing to be innovative, and if you will, self disrupting, even if it generates dislocation, and doing so in a capital efficiently is a winning equation. The marketplace will ebb and flow as uncertainty grows and decreases. The key is credibility. In 2019, we delivered outstanding results. We are on track with all aspects of what we told the market we would deliver. In fact, we are ahead of that. We have increased our outlook three quarters in a row. That will increase value over time. As to whyam curious the share price is still down 7 this year, 17 yearoveryear. Perhaps it is a debt thing. You have plenty of free cash flow. Will he use that to pay down att, or are you looking potential acquisitions . David we made it clear that for the first two years of our combination, our priority was to pay down debt at potential, to return to our range. We are on track to do that. The health of the business buy back more stock in 2019 than we initially anticipated. We bought back about 1. 8 billion of our stock and executed a couple of acquisitions. Back to the overhang role on the stock, after the decade i referenced, even including the overhang you indicate, there is a 40 per year over 10 years, and we look forward to continuing the momentum as we go forward. Vonnie the stock is up 14 since that particular interview, bringing its yeartodate gains at 7 . Remember, bloomberg users can interact with the charts throughout the day using gtv. Catch up on key analysis and even save charts for future reference. More markets next. This is bloomberg. Lets check markets on this day. A very small move in trading. The dow and the s p 500 are both up slightly putting an alltime highs. The nasdaq had been higher putting in another alltime high but as you can see it is down 1 10 of 1 . It will it catch up to the s p 500 and the doubt . If so, it will be the 12th day higher for the nasdaq. Has been a banner year for stocks. What is ahead for 2020 . Are bullish. They say stocks will climb. There is a yearend estimate of 3650 suggesting the s p 500 could climb from 13 of current levels. Two banks suggest that we will see stops stocks drop. Morgan stanley is looking at a target of 3000 for the s p