Then we have the 10 year yield down to 1. 86. A little bit of buying in u. S. Treasury pending appeals lord. Guy lets look at what is happening in europe. Stocks are up by around 1 . Bullish as the day has progressed. Every sector is in positive territory. Eurodollar is a little softer, still north of 1. 12, but only, just as you can see. We are getting a bit in the bond market today, five basis is over , unwindingan 10year the moves we saw on december 28, 20 night. Is this going to be sustained . The data out of europe are not great, but from a Broader Market perspective, we are definitely riskon this first trading day of the new year. Does it imply anything for the rest of the year . I very much doubt it. Lets get perspective on where you will potentially be making money in 2020. We are joined by Alberto Gallo, portfolio manager. He is going to give us perspective on where we are going to do well and where we will not do well. Where am i going to make some money in 2020 . Alberto it is definitely a more challenging year than 2019. We entered 2019 coming from the centra panic and Central Banks seem to the market. This monetary dominance is probably going to fade in the next decade. We can call the 2010 decade a kick the can decade based on military policy which postponed the issues in the economy and created issues in inequality, the lack of micro reforms in the economy and lack of competition. In the next decade, the 20 20s, we call them the daring 20s. We think policymakers will try to fix these problems, but not all the solutions will be marketfriendly. There will be more fiscal policy and less Monetary Policy, which means probably higher in longer Interest Rates, more inflation, and there will be some shocks to monopolies. Think of tech in the u. S. Or at large monthly sick monopolistic industries which some regulators and policy makers may challenge. Less consolidation, less wall street, theseain are some of the trends we see starting this year and developing in us few years. And also, more esg, more correct investment. Of theent is more aware cost was his of where we put our money. Guy there is a lot of money, the. Lets talk about the amount of money at risk. Democrats are in favor at the moment. We have a savings glut at the moment in the world and in a sea of liquidity out there that is available that is causing asset prices to rise and yields to remain very low. What is going to change that . That has been a huge dominant theme over the last three years. Of battle if you think about you could have slightly faster growth above 2 in the u. S. And slightly higher inflation, which we still think the fed will tolerate. We dont see bond yields moving a lot higher, but the upside for carry products like credit or bond is lower now. You have to be a lot more specific and choose companies are sector that you like. Where was he an upset in emerging markets come bonds and currencies that are still cheap like the mexican peso and the best, they division the the indonesian rupee the indonesian rupee. Em equities are really cheap, they havent moved barely in the last five years. They are still rangebound, even though they went up last year compared to u. S. Equities. That is an area where there could be a shift in capital. That is where potentially there is additional upside. Also, the dollar is starting to weaken. We may be one slowdown away from the fed cutting rates again, maybe not this year, could be later it in the year or next year. The goal ultimately is a safe haven against the depreciation of paper currency. That is ultimately where we are going, towards more central bank liquidity. We are addicted to lower Interest Rates. It is very hard to normalize, and Central Banks fail, and probably it is too late to try again. Vonnie which Central Banks . This is our mliv question of the day is the most important one in 2020 . It is an west question. There will be a central bank that will have more of an impact on the Global Economy than others. Which when will it be . Alberto they are all important. The fed is on hold, so i think for now, the spotlight is not on the fed. The ecbs trying something new, they have understood the negative impact of negative Interest Rates. They are trying to offset that with other things like the loans to banks, potentially more qe. The riksbank in sweden has already increased Interest Rates. I doubt the ecb will do that, but they are trying to do something new. That is an interesting want to watch. I think on a marginal action point of view, the pboc is important. China still has room to do credit easing. We have seen a decrease in bank reserve requirements. They are trying to push banks to lend. We know that china has been hawkish, trying to deleverage the economy in the last year and a half. Now they are switching back to the path of least resistance of lower reserve requirements and easier policy. So that the central bank can give a little margin of stimulus. Overall, we know that we are very close to the bottom. So we really need to look at fiscal policy and which countries are able to provide fiscal stimulus. Again, we go back to you were up with germany moving away from the theory of having a black, zero deficit, but probably not this year. Probably something that is a work in progress. What you am curious think of the opinion piece suggesting that President Trump shouldnt have started the trade war should have started the trade war with germany and not perhaps china. I am curious as to your files of that piece i am curious as to your thoughts on that piece . Alberto if you think about u. S. Trade policy, it has been operating on three fronts, with n. A. F. T. A. , with china, and with europe in the beginning. But having a trade war on three fronts etc. To impact the u. S. Economy last year. We saw going down, companies starting to reduce the workforce. I think the Trump Administration made the right decision to focus on the most important trading partner of the future, which is china first, and be relatively more friendly with mexico and europe. I am not a believer in going from a trade deficit to a trade desk to a flat trade to a flat trade balance with tariffs. This is part of the way of the u. S. Economy operates of the consumer. Issue, whichbigger is spending and future fiscal policy. I dont think tariffs are going to be able to solve that with germany. Guy everybody seems to think that trade story is going to get easier, not harder. Word we find ourselves in a world where that is the case . The president is indicating, and the chinese are backing him up on this, that we get a first phase trade deal signed in the next couple of weeks, and move quickly on to phase two. Hard, andlooks really the president thus far has shown a huge desire to use tariffs as a main weapon. Why do we think the 2020 is going to be different on this front . Alberto we need to think about trade as a game. Trade is being used for the electorate to attract those as well. I dont think theres only place to deal before the election, think it will be used as a possibility to boost interaction. Guy do we get more tariffs being put in place . Alberto it is possible that if the economy remains strong, and markets go up you may get more threats. Of the at the moment, the markets are in the euphoria phase. A rebound in pmi, which by the way, we are not seeing everywhere. We saw some disappointing manufacturing data in the u, in italy in the u k and in italy. China is rebounding, but services are lower. We see the economy going sideways, may be slightly up, and markets going a lot higher. I am at dissipating a lot of these gains. So we have taken the foot a little bit off the accelerator here. We were a lot more convinced of a buying risk in the beginning of 2018, then we had a big selloff. Now we are trading a lot more about single opportunities in countries that we like or dont like, and single names that we dont like or like. It is probably a good year for alpha. There will be some political for the two the tea. Even with Central Banks printing money there will probably be some political volatility. Even with Central Banks printing money. We saw thomas cook last year and we saw lebanon, so there is room in the market. Guy volatility will pick up next year according to Alberto Gallo from algebras investments will stay with us. Vonnie lets check Global Markets now. Abigail starting off 2020 with a riskon bank. Take a look at the indexes, a lot of green on the screen. In the u. S. , the s p 500 and the rising, nonetheless, pretty strong showing. Particularly true in europe. Look at the stoxx 600, up about 1 . In the asian session, the shanghai composite also putting gain. Reater than 1 the bulls are out thinking that perhaps the macro uncertainties are out for the year ahead. Sector wise, more sectors are higher. N are on bottom, some of the defensive sectors. Up top once again, similar to last year, tech is at 1. 1 . Some of the particular stands for technology on the day also has to do with the chip sector. We have the s p 500 informations tech index up 1 after last years 48 gain. The stoxx up again, adequate are than 60 gain. Helpa and macron perhaps to that. Interesting, there is one wrinkle, a rally for the haven assets. Take a look at the 10 year yield and the german bund. We see a rally from bonds and bunds, and also the japanese yen railing against the dollar. It will be interesting to see how that works out in the weeks ahead. Vonnie yes it will. Abigail doolittle, thank you. Do remember the function gtv on bloomberg, it allows you to view the recent charge featured on bloomberg tv. Catchup on key analysis and save your favorite for future reference. This is bloomberg. Tony live from new york vonnie live from new york, i am vonnie quinn. Guy and in london, i am guy johnson. Lets check in with the first word news. The pentagon has prepared to deploy more troops in iraq to iraq. Re troops in the defense secretary says iraq is in turmoil right now after an assault on the u. S. Embassy compound in baghdad by a run back to by iranbacked militias. House Speaker Nancy Pelosi and Senate Majority leader Mitch Mcconnell are locked in a standoff over President Trumps impeachment trial. Bloomberg has learned that over the holiday break there were no negotiations on how a senate trial would be handled. Pelosi had delayed sending the senate the two articles of impeachment. She says she wants a fair process for the trial. China has temporarily halted a link between the shanghai and london stock exchanges. Bloomberg has learned the move was prompted by political considerations. It is one of the issues the hong kong protest. The link allows Companies Listed on one venue to issue shares in the other. In australia, the navy is rushing to rescue thousands of tourists stranded by wildfires. At least eight people have been killed in the blazes in New South Wales and in victoria. The fires have destroyed hundreds of homes. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am ritika gupta. This is bloomberg. Vonnie thank you. We are back with Alberto Gallo, algebras investments portfolio manager. A lot of people are talking about emerging markets. This seems to be the time of year when they stage protest. We have already seen a little bit in the south asian nations, thanks to the redistribution of the supply chains and so on. Are you looking for a been a year in em . Alberto we have to think about emerging market debt, which is a ready very tied to the yields. The yields are not much above bonds from developing Market Countries developed Market Countries, but if you look at local currency debt, there is very high real Interest Rate premium in countries that are relatively stable from the point of view of debt dynamics. Think of russia, mexico, where inflation is under control. Indonesia. So there is value in some of these countries. There are other countries which on the other hand have structural issues, like south africa, or turkey, which is coming back to the temptation of credit easing, of pushing back banks to lend to boost gdp. So you have to be very selective. But over all, emerging market local debt last year was one of the few Asset Classes that remained unlocked, didnt receive inflows from investors. Finally, equities. We are fixed income fund, but in the equity world, you can see that emergingmarket equities, generally nonus equities, remain cheap compared to u. S. Assets. So if you really have a faster than expected growth year, think of above 2 in the u. S. , above 1 in the eurozone, as a reference, then there should be some rotation in nonus equities. European banks are still at rockbottom valuations, and generally, em equities are still very cheap. It is not necessarily our base case scenario, but certainly the ity the the convex upside versus downside ratio is very high,. So we like having exposure to these. ,onnie the have any concerns or is this creating an opportunity for your fund . Do. Rto we if the upsidedownside is very good for things like em equities or european equities, for credit, if you take the market as a whole, the upsidedownside is not great right now. Starting from very low spread levels, you can make y,ngledigit returns from carr but you also know the amount of downgrades in index is increasing, and there are some corporate fundamentals which are getting worse. Sectorsll, we see some struggling. We know retail is under pressure, energies under pressure, we are late in the cycle. Oil prices are different up that should up by a contractor in supply, not an increase in demand oil prices are driven up by a contraction in supply, not an increase in demand. We have to be more selective. As we buy upside in european banks, we purchase Downside Protection credit. Guy you are doing this via the options market. How convinced are you that this is how things are going to develop . What is your degree of certainty . Em, you sound like you are tiptoeing into these positions rather than allin. Alberto there is different ways we can do it with option or directionally. Credit is essentially on option because you are starting from a spreads. Of if you are going short in some parts of the credit market, you know your downside, your spread tightening is very limited. It is a matter of time. You might be forced to wait for a long time before the power of the central bank is overshadowed i fundamentals or political risk, and you normalize the spread level. Guy with the Central Banks sitting over there, sounds like a very risky trade. Alberto and in fact, you have to remain wary of the Central Banks. You have to remain carry. We still have a juicy carry of about 5 10 higher in our funds. We hedge some of our exposure, but we are very wary that they are still Monetary Policy dominant so far. We think markets the pendulum has swung from a year ago and we were almost in panic, turnout when we are in a euphoric state, with very high animal spirits, so we dont want to push the accelerator to the maximum just when everyone else is doing it. Guy in terms of the volatility this year, i am curious as to what you anticipate. Last year, fx volatility, you can find anywhere. To a certain extent, in all the major Asset Classes, it was pretty much true. Where do you see the biggest pickup in volatility this year . Is a great to be foreign exchange, if so, which pairs . Is it going to be in the bond market. Because to a certain extent, last year was a bit of a snooze fest. Alberto that is true. Med markets,s cal but they are roughly on hold now and have the u. S. Elections coming up. We have to see which candidate will win the democratic primaries. That will make a big difference. You have candidates who are promarket, and candidates who are promain street and they want to break monopolies, a raise taxes. Which might be good in the long run, but might cause disruption in the near term. The other thing is geopolitical risk. In the mediterranean, we have turkey trying to gain control of gas assets in cyprus, russia is still active, we have latin america, a lot of hotspots. Central banks, some of them are trying something new. The riksbank, the ecb doesnt want to cut rates further, the fed is on hold. So you have conditions for a bit of volatility. There are fundamentals which are improving but very slowly. Market so far have seen the glass halffull. Fine, but it is also good to prepare in case the glass becomes half empty again. Guy on that, that is where we will leave it. Alberto gallo joining us from algebras investments. This is bloomberg. Vonnie checking u. S. Markets now. An optimistic tone this first day of trading for 2020. We have chip stocks leading things higher. The s p 500 up more than. 3 , the dow up and 6 . Guy as we approach the closing europes first day of trading volumes are a little light,. Markets are up, though. Riskon. Every sector trading higher. Banks are leading the charge. A few minutes to go until the end of the trading session. That is coming up next. This is bloomberg. Guy first trading day of the year and it is a positive one. We are trading higher. A little light, but not fully back into gear. Not everyone is back at their desks. This is what the sessions look like so far. This is the intraday on the stoxx 600. We picked up strongly. A lot of this is down to what is happening in china overnight. Since then, we have gone sideways. Most of the gains were priced in two u. S. Futures and around the world by early on in the session. The stoxx 600 up. 9 . Individual markets look like this. Yeartse 100 a laggard last , today also a laggard. Wall street stocks have done well. The autos have done well. The dax is up 1. 1 percent, the cac 40 up 1. 2 . Lets show you the sector breakdown. Every single sector in positive territory. If you believe europe will come back next year, that could be one place you want to look. They are incredibly cheap valuations. Continue to be low. Technology has not been europe, but it is trading higher. The car sector is getting a move higher. Industrials are up. What is trading at the bottom end of the market are the expensive bond proxies that did well for the bulk of last year. The health care sector, only up. 3 . Food and beverage, nestle, etc. We do also have a bond market move. We are seeing bonds as the yields go down. Goods,l households and some of the luxury stops having a slightly better day. Utilities in there as well. That is the risk on risk off story. Individual names, lets throw them out and see what is going on. We talked about airbus, up 2. 27 . We have a lastminute dash to make the numbers for year end. There was some speculation they would not be made. Seems to happen on a frequent basis. Is aative tullow negative story in the oil sector. We had a find in yana that was supposed to be more juicy. Lvmh up 1. 27 . That is a heavy weight for the French Market and it will be benefit as will the minors from a more inflationary stance out of china. Those are the sectors in europe that could do well. The autos could be in that mix. Luxury tends to do well when china does well. You see the mining stocks, pure plays tending to do better when the chinese story is more open. That is certainly the narrative coming out overnight. Lvmh up 1. 25 . That is the european story. There is some discrimination in this trading day. 3 . P 500 up we started out more gangbusters than that. Pulling back slightly. Not so much on the nasdaq. The nasdaq up. 6 and holding on the gains of 2019, well above 9000. Gold up 10. 1530. R. 7 , nearing the 10 year yield gave up some of the basis points it put on a few days ago and is back down to 1. 87. Lets look at some of the areas where we are seeing individual movement. Sox up 1. 1 . Across the board with an upgrade on amd and plenty of other good stories and games for many of the semiconductors. Also hardware and equipment and the media stocks. United airlines is another interesting one, up 1. 6 . Apparently now is time to get in. It received an update on the street. Wynn resorts up 3. 5 . An upgrade in december. Morgan stanley says it is time to get into macau gaming stocks. Revenue was estimated down 15 , not as bad as expected. That is giving wynn resorts and gaming stocks a left. Lift. Gha utilities are bound, other sectors are down but that is the worst performer in the s p 500. Guy lets get insight into what is happening in the markets. Disappointing Economic Data out of europe once again. Germany december manufacturing , 43. 7, a little bit better not that much and a number that continues along the bottom. Bloomberg Senior Editor for markets joins us now. John, there seems to be optimism at the moment. John the data, particular he out of the euro zone and germany, are not improving. I completely agree with that. There is a strong sense one of the many things they gave us the rally last year was the belief germany had hit a navigable rockbottom and we were on our way up. That is possible. It is not proven. Moment, wes at the are taking a lot for granted in terms of the effect any easing of the trade war is going to have and any belief we are going to have any expansive fiscal policy in the euro zone. Hard to ever believe donald trump taking the advice of paula krugman, if he were to take his advice and turn on germany, what would happen in that case . John i do not to speculate. I do not think it would be good for american or European Assets or chinese. There is an argument to do it the german surplus is a remarkable beast. To putk of continuing the euro zone into even more trouble than it is already in and create harm for u. S. Trading partners would outweigh any benefits from forcing the germans into behaving slightly better on the international scene. The other point that would require the germans to continue to cut Interest Rates or the ecb to cut Interest Rates, which would have the effect of strengthening the dollar. Guy it does not sound like the ecb wants to cut Interest Rates. Probably more likely we see the fed cutting rates than the ecb. You and i were chatting this morning and you are pointing out a chart of the relative rates between the u. S. Two year and in germany. How big of a risk is this to the european recovery that we get a strong euro off the back of that . John at this point i do not think it necessarily matters why much because the reason german rates would be increasing is so much more important than any affect that has. We are still at the point where the differential to the u. S. Is historically very deep indeed. 3. 5 a year ago. We are still at about 2 in round numbers. That is historically very high. At this think that point the European Market needs low or negative rates. Part of the reason the lagarde ecb does not seem to be enthusiastic about maintaining rates where they are is we are getting growing evidence negative rates do not help that much. Vonnie there is a camp of ecbstors that see the getting rid of negative rates slowly but surely. I guess it would take time. Do you see that happening . It would be almost an aboutface in some ways, wanted . Wouldnt it . John is an aboutface in some extent. This is after we used what was supposed to be an emergency measure in q. Week and 2008 still being enforced in qed qeill being enforced in still being enforced more than a decade later. An alarming deflation scare it cannot be necessary to maintain them for law for long. If they are not gaining result, and look at what is happening in the nordic countries, the way in which they did not yield the results that were hoped there, then like many other Central Banks, the ecb needs to admit an error and start to retrace. Can i tonight guy take you back to the beginning of the conversation on the positive vibe around Global Markets. Coming through the end of last year and into todays session. What is the john authers perspective on this . I hear a lot of people talking about a reasonably benign year, but a lot has to go right to maintain assets where they are. John that is what concerns me. If you want a couple of parallels that concern me, both from this time of year, one is two years ago when we entered the year already very buoyant. At that time it was about tax cuts. This time it was about the trade war. You also had yields rising sharply and we had a melt up that went on for months and a great deal of excitement that was not pleasant in february of 2018. The other interesting parallel, which ive mentioned earlier today is with y2k. Remember we were all scared computers were going to stop working at the turn of the millennium. The fednt of support gate at the repo market in terms of the proportionate increase to helping thesheet is repo market at the moment. You might remember interesting things happening to the u. S. Stock market in the early months of 2000, and more interesting things happening thereafter. Vonnie i want to point to point your article from new years eve, which is the roundup for this fictional hedge Hindsight Capital. You do point out that even though we torture ourselves with returns for Hindsight Capital, the rationale for all its trade did exist at the outset without the benefit of hindsight. What should you be looking for as a lesson from 2019 Hindsight Capital that we can using 2020 . John the lessons you have to logic canthe economic take an extremely long time to work its way out in the real world. What we discovered and what is clear now is that the damage that had been done by the crisis of 20 of 2008, 2009 was so severe it did put a stopper on the inflationary psychology for a long time, as in up to this point, a decade. That does not mean the logic is indefinitely postponed. You could similarly have said two years since the dot com bubble, this is madness. It would have carried on for a while. If you looked at the overextension of mortgage credits before the financial crisis, that carried on for two years after u. S. House prices pete before we finally got peaked before we finally got pitched into crisis. You can see ideal capitalization but you have to give them a lot of time to come to fruition. Nes quotea classic key that the market can stay irrational longer than you can stay solvent. That is what happened today. The hedge funds had a terrible decade. Did worse than bonds, let alone stocks. That is because they make perfectly sensible bets that inflation would come back and rates would rise. They may not be proved right, but they were very early. The real issue has been there has been a huge amount of centralbank support. John this was another thing we should have grasped. Guy why was that changed . Once the genie is out of the bottle, why would the fed or other Central Banks go back to not having the markets back . There is a sense that whatever happens, if it gets too bad, the fed put it there. Whatever it is, it is there. The Christmas Eve selloff is an interesting case in point. The fed more than blank, completely turned around after that alarming reaction to the announcement it did intend to go back to normal rates. I will answer your question. Inflation. If we discover the amount of money printed does lead to higher inflation, that is going to make a big difference to how Central Banks behave. Whether you want to call it murphys law or whatever, the ultimate pain trade at the moment for which nobody is positioned anywhere because they have learned the lesson of last 10 years, the ultimate pain trade is the recovery of inflation. Guy i suspect it does not have. O recover much john i remember writing of british inflation of more than 10 . Im not that old. 2. 5 would be high inflation. Guy always a pleasure. Nice to see you with your british understatement. John authers, bloomberg Senior Editor for markets. Lets see where european stocks have settled. Light volume for the back end of the session. Not much movement. A little bit lower. The ftse 100 up. 8 . The cac 40 and dax up 1. 1 . We are restarting the cable show today. Back in business. Jonathan ferro is on the other side of the atlantic. I will be joining him in london. We are on of the top of the hour on dab Digital Radio in london and around the world on your bloomberg devices. This is bloomberg. Vonnie live from new york, i am vonnie quinn. Guy from london, im guy johnson. This is european close on bloomberg markets. Lets check in with bloomberg first word news. Here is ritika gupta. Filing for Unemployment Benefits dropped to a four week low. In a bloomberg that was in line with estimates in a Bloomberg Survey of economists. President Trumps Campaign says it raised 46 million in the last weeks of 2019. It ended the year with 102 million in cash. The president s campaign has urged supporters to donate as a way to show their disdain for the impeachment investigation. Bernie sanders likely has the largest war chest of any potential nominee. 34. 5ampaign says it raised Million Dollars in the fourth quarter. Julian castro has dropped out of the race for the democratic president ial nomination. He was the only latino candidate and supported progressive policies. He was unable to rise in the polls. In a video message, he said it is not our time. Benjamin netanyahu will Ask Parliament to grant him from immunity on corruption charges. That could block the start of his trial for months or longer. Netanyahu is counting on being the person who forms the next government and having his coalition consider the request. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am ritika gupta. This is bloomberg. Vonnie thank you. Our stock of the hour is one of the biggest market losers. Cigna jewelers had a terrible year last year. 2020 is not starting up better after an analyst downgrade. Taylor riggs is looking at why. Taylor down 14 , having one of its biggest oneday drops for the year. Off 44 . Back this is after analyst cut the stop to a neutral, saying investors should be playing offense with other retail names that are not signet. Take a look at what this means from analyst perspective. Sells on thetwo stock, downgrading to underweight. Names that wells fargo covers, a street target of 12 per share, analysts not feeling bullish on this stock. Also highlighting other retail stocks. The theme has been haves and havenots. Walmart, target, amazon doing well. Other Companies Like macys, gamestop, signet, a lot of other beaten up names you could take advantage of if you are looking to buy the dip. Signet, according to wells fargo, not one of those. Guy what are analysts saying about the top line for this companies . Taylor there is good news and bad news you break down the revenue for this company. Kay,ood news is sales at their largest unit, it is only down. 1 . Zales jareds down and jareds down 2. 3 to 5 . International is down 13 . The smaller portions of revenue parsing the biggest decliners while the biggest portions of revenues are seeing the smallest amount of sales declined. Right, thank you for that. That is our stock of the hour with taylor riggs in san francisco. Coming up, it is our global battle of the charts, the first of the year. This is bloomberg. Vonnie it is time for a global battle of the charts. The first of 2020. You can see them on the bloomberg by running gtv. Kicking things off is romaine bostick. Romaine happy new year. Want to take a look at the euro. This was the story of 2019. It got batted around a lot but we started to see strength into the end of the year. I want to look at this yellow line. This was the main point of resistance for most of the year. That is longterm average. 233 days. A lot of resistance toward the end of the year. Toward the middle of december, we broke through the line, came down, surged through it around Christmas Eve. Today we are hitting that line again. A lot of strategists say the technical set up is a positive one. When you look at the chart, higher highs and higher lows. That is a good sign from a technical basis. You combine that with the optimism surrounding the macro and political issues and a lot of strategists are starting to raise their forecasts for the euro, expecting you to appreciate every quarter this year, finishing out the year around 1. 15 and heading into 2021 around 1. 18. The euro has had two down years versus the dollar but with the dollar weakening and the macro outlook improving, we could see this trendline improve. Vonnie well done. I love it. Something in keeping with the theme of the program. Next up is guy johnson in london. Guy is an interesting chart, romaine. What i have here is an argument for why european equities are going to outperform in 2020. What we have is the white line is the europe value versus growth index. The other one is the german two and 10 spread. What we saw in december it was a steepening of the curve, the biggest steepening in over two years. What that tends to do is signal the fact that we are starting to get into a better economic situation, which in theory should improve the outlook of some of the value stocks. We see that today. Today in europe you have the bank stops doing well. That is one area of focus. The big steepening we had during december. The question is are we going to ca pickup when it comes to the european equities . European equities are largely value stocks. Are we going to see carrying on in this year . Germanyeye on the 210 to see where the european equities are going to outperform. Vonnie this is a very difficult one. I was going to look at the control room but we are out of time. I will not choose between two of myco anchors. You both win. It is a tie. Coming up, is balance of power with david westin. Isaac boltansky is among his guests. This is bloomberg. David from bloomberg World Headquarters in new york to our tv and radio audiences worldwide, i am david westin. Welcome to balance of power, where the world of politics meets the world of business. On the brief today, Anna Edgerton from washington on the stalemate over the impeachment trial. Bill allison on the huge fundraising numbers for bernie sanders, and brian swint on sluggish numbers out of europe. Where are we with the impeachment . The speaker refuses to send the articles over. What is going to happen . Anna the next step is for the house of representatives to name impeachment resolution that would name the impeached the impeachment managers who would present the case in the senate trial. We were expecting that to happen in early january but now it appears to be part of nancy pelosi strategy to delay that to make demands on what the senate trial looks like. It is unclear what leverage she has to shape the contours of the senate trial. We will see what her next steps are. Mitch mcconnell will show up a