Lift when it comes to european stoxx 600. I am trying to figure out the risk. We are entering another monday. Again is at 105. 48. Gold is down. Cold acting as a haven. Gold is acting as a haven. Coming up, we are live on the beaches where we are speaking to sell vini. Here is viviana hurtado. Viviana tense week of protests and hong kong as violence intensified. Onstrators but themselves the Police Responded firing tear gas. The clashes follow three days of demonstrations. They began friday. Most protests were denied police permits. Saudi a ramin is posting a decline. Exporterbiggest oil posted semiannual results. That is down from 53 billion a year. Say it willcials sell shares in 2020 or 2021. This weekend, the opposition grabbing the moment the momentum. Thangives him a bigger expected lead of 15 Percentage Points. Posters have said he would have trouble overcoming the margin of over seven at the main election. That is in october. 32 people have been killed and 15 missing after a typhoon struck china. A typhoon came sweeping through the provinces toward shanghai more than one Million People were evacuated as the storm approached. The damage is over 2 billion. This weekend Jeffrey Epstein was found dead in jail. The former financier was accused of molestation and sex trafficking. The jail where he was being held is now the target of two separate investigations. U. S. Attorney general william barr says the death raises serious questions. Boris johnson is being accused of spending promises. Time he promises to cut taxes. The combination could lead to a big increase in borrowing. Global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. Im viviana hurtado. This is bloomberg. Francine we are getting some breaking news out of hong kong. The hong kong airport says the emergency has been even has been activated. China says hong kong shows signs of terrorism. So far we have very few cancellations in the last three or four weeks. Things are ratcheting up now they are starting to cancel flights is a big deal. If you need to travel from hong kong, just check with your travel agency or your airline before you do go to the airport. We will continue watching that briefing from hong kong. President trump isnt the only one worrying about the dollars rise. Worried the ascent could be a catalyst for recession. President trump has said the planned trade talks with china could be held off. Joining us now, karen ward. Gallo, thank you both for joining us. Karen, lets kick off with you. Trade concerns. Day in and day out, seems to be Getting Better or worse. How do you deal with it . Karen understanding the roots of the problems and having adjustment about whether having a judgment about whether things will deescalate. The hostilities, one in tariffs and one intellectual properties. Who is going to dominate global tech . I think we have always been skeptical. Deescalategoing to and live very happily. We have been more riskaverse. Defensivebout more ways of managing oil portfolio. The challenge is, weve got the Central Banks telling they are going to do as much as they can to support the outlook. For investors, the challenges i know i want to derisk my portfolio. Where do i go . Providernment did not the clear safe haven statement. I think that is a challenge for investors. Exposureus think about but more in a more defensive way. Alternative. He francine does the trade war stand for the next 18 months or did escalate . Alberto we see it in a longterm development. Existing powers are trying to retain their predominance. At the same time, Central Banks are pushed to do more. Maintain this level of growth. Decreasing ande the Monetary Policy is decreasing. The patient has been under anesthetic from qe. There is no chance this qe is enough to make the patients the patient recover. Toare positioning for yields go lower. We prefer to have hard assets or things linked to hard assets. Ding invest in countries where Interest Rates are still high like russia, mexico and brazil. Francine how have assets reacted when september rate cuts were called off . Karen the equity market and bond market look like they are on complete different pages. The bond market has the recession priced in and the equity market hasnt. It is not my base. All of our strategists have to concede that we are trying to make judgments about the political strategy. He does it he doesnt want to head into the election with people losing their jobs. Are all mindful of if you problems for the u. S. Administration to change tact. We have seen that. It just adds to the challenges about the scale to which you want to shift based on the headlines. More moderate shifts but thinking about assets that you activelyare going to balance. Francine what moves the most if there is no talks between the u. S. And china . Alberto the markets are very polarized. The evaluations are consistent with a war which is long Central Banks but short growth. Assets are required to pick up and growth memento him. Momentum. Unless there is a very strong uturn, that is not going to change. The best on yields being lower by Central Banks are still doing very well. Are gold to companies that monopolistic. Quo. Is the status we dont think the trade war disappears at least for the next three to six months. If trump wants a victory, it will probably be in q1 or q2 of next year. We are positioned with the view that qe and centralbank easing becomes the status quo becomes qe infinity which what which is what we have been saying over the past five years. Francine alberto, thank you so much. Us. N, both stay with we are getting back to those headlines from hong kong. The Airport Services say the center has been activated. The advise the public they advise the public not to come to the airport and flights have been canceled. If you are due to arrive, just check the airlines before you go. Coming up, italys beach boy takes his campaign to the coast. He is set to become the companies the countrys next Prime Minister. This is bloomberg. Francine economics, find, politics. This is bloomberg surveillance. Lets get to the Bloomberg Business flash. Here is viviana hurtado. Viviana cbs and viacom working through the night to determine a price for the longawaited mark longawaited merger. Be sherryan would redstone whose family Investment Vehicle controls both companies. Viacom ceo would lead the new company. For such is loss after one of its tshirts sparked online controversy. The design lists cities and countries but shows both hong kong and macau as independent nations. Verse she says it is deeply sorry and resolutely respects china. He says he will continue at the swedish Event Company until a successor is in place but is looking for another challenge in his career. Sharesis tenure, his have outperformed industry peers. Ams has offered 3. 7 billion euros for ashram light. Osram light. The offer is higher than 35 euros a share. That offer was accepted by osrams board. It was rejected by top shareholder by the top shareholder. Francine thank you so much. The bid for full control has started on the beach. He is on the campaign trail after pulling the plug on bullish government last week. He is calling on swift elections. Tadeo. Us now is maria is he ready for an election . Morning. Od he is 100 ready for this election he wants this election. He went out here and speaking to people, going into the water, shaking hands. He is in full Campaign Mode. Italy. To the south of he said i am ready for it and investors have nothing to fear. Nothing to fear because we are not leaving the euro. Lets take a look. An exit from euro for the euro is out of the question and not being discussed. What we are discussing about, find wrong and want to change our rules on immigration and taxes. Theres no plan to exit europe or the euro. Maria that was Matteo Salvini who told me he will double down on this idea that italy needs a fiscal shock he wants to cut taxes. This is problematic because italy needs funding. We have seen the European Union put water on the idea. Francine maria, thank you so much. Ward andh us, karen Alberto Gallo. Alberto, you have been following very closely. Unclear when it is the election takes place. There are a lot of people who dont want this election. Alberto we have three scenarios. In october. S happen the second one is we have a technical government to carry through the country potentially next year or longer. The third scenario is the parliament with fivestar and other parties taking over. The league has been promising a lot of spending. A lot of populist governments that we follow including the u. K. These promises are not realistic the longer he stays in power, the closer he is to the budget lull at the end of the year. The more likely his promises are going to appear as unrealistic and political lies. His incentive is to have elections now. Every other party wants to wait. Repricedt has clearly election risk but this was not a new development. The market is very liquid. You have big news. We think they are chances you longere a reshuffle or a extension. Francine if we do have early elections, what are the chances that sell vini governs that salvini governs . Aberto you can have coalition between salvini in other parties. We can have a coalition between salvini and the more moderate centerright party. This would be a more probusiness scenario. The question is, whether the Northern League make it govern alone. They have not been against the euro but they want more spending and they want to cut taxes which in principle are Good Measures they have to come with reforms and not with just an increase in pensions. Have to come with investments. They have to come with investments. And not just spending on shortterm expenses. Francine karen ward and Alberto Gallo stay with us. Flights are canceled as violence in hong kong continues. The Chinese StateCompany Tells police we are live from the city. This is bloomberg. Francine this is bloomberg surveillance. I am Francine Lacqua it all flights out of hong kong airport have been canceled as violence intensifies in an intense week of protests. Protesters through projectiles including some were filmed beating protesters. Lets get to our asian government reporter. Theres a lot going on. We were brew we were briefed by police. We were also briefed by airport security. Ring us uptodate about what is bring us uptodate about what is happening now. We have thousands of protesters descending on the airport, one of asias busiest. The airport has announced they are canceling all flights. That is huge news. A previous airport protest that led to hundreds of Flight Cancellations and delays. This is part of that sort of tactic from the protesters of ramping up a disruptive economye that hit the that hit the economy trying to get attention for their cause. The police are saying there have been more than 100 arrests after this violent weekend. [no audio] are we closer to a resolution if violence increases . I think we are at a point now where both sides are becoming increasingly aggressive, but at the same time, that is driving them further apart. We are almost further from a solution then we have been. A lot of people have talked about neither side being able to back down. Gone too far. Every single appearance carrie lam has made has only angered people even more. The police are coming out and defending their tactics which also angers the protesters and bring brings more people out on the street. We have beijing supporting the police and the government which is hong kong. A very intense affair in the sense that the government is trying to not is trying not to look they are in the squeezes of beijing. Everything they are doing so for prodemocracy protesters in hong kong, you got a situation where it looks like beijing is backing the government. It looks quite bad. Francine we look at your markets. So far, not much trade sending stuff lower. This is bloomberg. Morning recession Goldman Sachs a says a downturn moves over the u. S. Salvinis beach story. He tells bloomberg an exit from the eu has never been his plan as he takes his campaign to the coast. Sally are in snap profits fell more than 12 saudi are ins this is bloomberg surveillance. In london. Cqua annemarie francine i think we need to take a break and cover a couple of other stories and get back. A little bit of a shortfall compared to what analysts were expecting. The price of oil. On to more. I think annemarie is now ready. Over to you. The First Time Ever they reported first half profit. The first time they have had this earnings call. 47. Umbers came in under about 12 less then this time in 2018. Inciting lower crude costs but higher price. They struck this deal at the end of 2018 with other members of the cartels to restrict production. We have seen saudi production fall. Potentially another headwind. Two things if youre looking at this and want to be a potential investor. They are going to restart ipo talks. Taxes. Ve higher for each barrel of oil they put out, it has to generate less money than other producers. This is because the government aramco. In uses the payout of the dividend. It was very high. The only investor in the company is the government. If you are looking to want to become involved, they are signaling theres going to be a lot of cash payouts. Much. Ne thank you very lets shift gears and talk u. K. Boris johnson is being accused. He says it says a combination of things and brexit could lead to a big increase. Still with us is karen ward and Alberto Gallo. Karen, when you look at brexit but when you look at the combination of fiscal u. K. Over the next 12 months, what do you do . Karen the spending is coming clearly thesuggests Prime Minister is gearing himself up for german election. Whether that is him anticipating being forced on him by vote of confidence in the house or whether he needs to put himself into a german election in order to get a greater majority, to deliver a no deal, but also perhaps to extend the timelines before he wants to face u. K. Voters. We are in election every mode. That is highly likely. For investors, the bond market like all bond markets are heavily weighed down by quantitative easing. Sterling is telling you most about u. K. Risks. International investors are worried about what is going to happen. Francine lets go to the u. K. 10year yield. If we bring the u. S. 10year yield which should be up on your screen shortly. It is at 1. 69. The u. S. 10 year, it is a big move and you look at the yields. Negative yields in europe ever more negative. How difficult is it . Karen it is terrifically difficult to find income. The Government Bond markets are going to provide an insurance if things get real. Bond prices rise, you can still get 10 return on u. S. Treasuries even from these yields. Even if we saw these yields collapsed to zero. Collapse to zero. The government can provide insurance but just not providing income. Where are they going to provide income find income . Going to do you see it zero, the yield . Alberto Central Banks have given this promise of qe and lower yields creating inflation. It is wrong. It hasnt worked. In europe rates continue to be inflationary. They will continue to give liquidity to buy assets. We expect them to announce a new qe program. The Federal Reserve will continue to cut also pushed by political parties. We do think that yields will continue to go down and even countries that were deemed to be safe like australia canada or sweden may start qe in the coming years. Heir economies are held down commodity dependent. We have been through 10years of low Interest Rates. The economy cannot sustain higher Interest Rates and we are stuck in this qe infinity environment. The challenge is the challenge is to invest. We dont invest in negative yields. Francine thank you both for joining us. Gallo. Ard and alberto lets get to the bloomberg first word news. Viviana at their riskiest u. S. T, that is how treasury secretary describe the u. S. And world economies. The u. S. Has engaged in. Goldman sachs says concerns are growing. The trade war will trigger a u. S. Recession. , matteodeputy premier salvini, maybe catching sunshine at the beach after he pulled the plug last week on the Coalition Government. Is league Party Leaders trying to drum up support. Won support in Parliament Without having to drum up allies. I dont think anyone is scared of democracy. We ask for elections. One should be scared if we were saying we dont want elections. Our not letting the people vote in coming up with strange government. Alberto fernandez that gives him a bigger than expected lead of 15 Percentage Points. Voters have said macquarie would have trouble overcoming a margin of seven at the main election. At least 32 people have been killed, 15 are missing after a typhoon struck china. It swept the eastern coastal province toward shanghai. As the storm approached, more than one Million People were evacuated. China state tv putting the damage at over 2 billion. Jeffrey epstein was found dead in jail. The financier was accused of child molestation and sex trafficking. His apparent suicide pumping outrage among the victims seeking justice. The jail were he was being held is now the subject of two investigations. Global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. I am viviana hurtado. This is bloomberg. Francine thank you so much. Lets get back to the la