Investors seem to be taking that news prewell. I want to point to the that news pretty well. I want to point to the 10 year yield at 1. 71 . Brexit news countered by a little bit of trade news. Guy absolutely. Brexit news helping the pound out, up a little bit. Volatility is spiking on the sterling. The turkish lira down again, but not by that much. Sanctions coming out of washington could have been worse. The saudi market in a bear market. Back to you. Vonnie i do want to point to a headline about gm. As we know, it is in talks with United Auto Workers union. The ceo of gm is now said to be in the room for those uaw talks, and agreement is near. The stock is jumping. Lets see where we are with the performance. Having been , negative at the beginning of the session, on the news that gms ceo is in the room with uaw. Lets get a look now at the major u. S. Bank earnings and the performance today, as you can see. Jp morgan is up 1. 8 . In descending order, city groom down almost 0. 2 , wells Fargo Citigroup down almost 0. 2 , wells fargo down 0. 8 , and goldman sachs, the worst performer, down over 3 . Jp morgan is doing the best, just in terms of the stock performance, but overall, apart from jp morgan, which obviously did very well, who is fa ring the best right now . Alison to your point, jp morgan stock is the best. They had 18 return on tangible equity, and they showed that they are gaining share in fixed income trading. They showed they are executing in their loan portfolio, and guiding to cost below where they were previously. Citigroup, also some positives in terms of fixed income trading better than expected. That was better for all the banks. With citigroup, the concern was cost. Thats one thing they have been watching this quarter. With revenue pressure, they really need to bring down costs to make their return on tangible equity target. We are going to be listening on the call to see if theres more leverage to pull expectations into the Fourth Quarter and next year. Are there more opportunities to bring that down . With wells fargo, the most positive thing is actually the negative. They took a 1. 6 billion charge off of the bottom line. We think this is helpful in terms of clearing the decks a little bit before Charlie Scharf starts at the bank, the incoming ceo. Goldman, the stock is weaker today. I think theres a couple of things. Fixedome trade income trading came in better than expected. They fared pretty well, they beat on equities, unlike the others. The concern for investors is what is happening in the Investment Banking fee line. As others across bloomberg have been speaking of, wework is a concern. What is happening in equity markets is a concern. Fees were weaker across the board. Contrast. Stronger by that maybe one of the concerns. Guy the pickup only came in the last month. Can i extrapolate it . Alison i think you can. What the banks will tell you, if you look back over time, its always september that really makes the quarter. It tends to be a big month, and it was a big month for creditrating. That really bodes well for bank of america, also someone like credit suisse, who has been outperforming the banks this year. Agency trading is also an area that nomura is strong in. There are definitely some takeaways. The fact that there was also some positive news on the rates business is good for banks. The currency business, less positive for someone like ubs. Vonnie alison, thank you. We will be chatting with you a little later on in the session. That was Alison Williams of bloomberg intelligence. Guy lets drill down into the markets, be take some news away from those u. S. Bank earnings. Jp morgan looking good, others not so high or hot. Weve got geopolitical concerns we need to factor in as well. Nicolausister, stifel head of equity strategy, is with us now. Did you see anything in todays earnings from these big banks that is going to break the u. S. Banks out of the range . Barry i look at jp morgan as a key bellwether. I like the net income, the trading. Loan growth was in line with what i was expecting. Some of the other banks had special issues related to their investments. There was good cost control premuch across the board. Overall, i think there basing, bottoming. If we can get some traction on the higher 10 year yield, ive been of the mind that the set up that we have here in october on the 10 year yield reminds me a lot of july 2016. A slightly higher bottom from the low, and better economic prospects after having fully digested a slowdown. Banks alphaare u. S. Generators or income generators . Barry they have great dividend yields in the banks, of course. Power forward total return forecast, which is fairly extensive, is showing low Single Digits for 10 years. If i can lock in a dividend yield that looks pretty rocksolid and growth that slightly over the course of a decade, its not a bad investment for people with a longer horizon. Vonnie you are looking for a cyclical bounce. What makes you so confident that events in the next few weeks will reverse that . The last your show in year, ive been very positive on the bond proxy defenses, utilities, reads and staples. This monday, we rotated into more of a cyclical call. Its kind of like gretzkys rule of skating to where the puck is going. We have to be three months ahead of reality. What we would like to think is fedg on now, which at the has totally done a 180. They were overly tight as far as rates go. Now they are cutting rates and replenishing bank reserves. I like the tenor and tone, and i think brexit is better. The market has already digested a lot of the slowdown in bad news that we are looking at the slow down and bad news, and i think we are looking at better news. Vonnie that said, the imf growth forecast a little disappointing today, really bringing down the 2020 u. S. Growth forecast. What makes you so sure all of the things you say are the correct tenor for you for a bounce encyclicals that wont inounce cyclicals that wont derail that . Nominalhen you look at growth for the s p 500, yearoveryear, nominal gdp made it flow for the year. I think the third quarter, which onl be ported preliminarily october 30, comps are going to get easier. I am thinking Semiconductor Index orders, as well as the durable goods. Im seeing the signs of a bottom all of this has been digested in the market with massive outperformance the past year and the highly defensive bond proxy , such as utilities, reads, and staples. I think it is worth a rally toward year end for a more cyclical profile. Financials, energy, industrials, primarily. Guy to get that rally into yearend, youre going to have to get people to stop sitting on their hands. They had a good year. Why should people take risk into yearend . Why will they be encouraged to do so . The backdrop. Arent the backdrop doesnt look that great right now. Why will people take risk into yearend . Why will they get out of cash and get out of there bond proxies . Through 2020 in june, the fed is going to add almost 500 billion, certainly 1 3 of 1 trillion. We think they might cut one more time, if not october, then december. The market typically responds well to a few rate cuts like that. A lot of what the administration does is hard to predict, but i like the tone that has a feel feeling to it. I think both sides are going to throw each other some bones, and we get some better results, so maybe china will buy some beans and boeings, and the u. S. Will rollback some tariffs, and it will be a little happier. Brexit, that looked awful up until a few days ago, and i think it is looking a little better now. Backdrop is improving. You have the yield on the s p over the 10 year yield, which makes for a cyclical rally. Vonnie barry is sticking with us. Stifel header, of equity strategy. Here with the first word news is kailey leinz. Kailey the u. S. Is raising tariffs on turkish steel and stopping talks on a trade deal. The administration is calling for a ceasefire in syria, but not a turkish withdrawal. The u. S. How far apart and china are on trade despite the handshake deal, beijing will struggle to buy if you billion dollars of u. S. Farm goods unless it removes retaliatory tariffs on American Made products. That wont happen unless President Trump removes tariffs on chinese products. The European Union sounding a more optimistic tone about the chances of a brexit deal after the u. K. Sent revised proposals. Negotiators are trying to wrap up at agreement in time for eu leaders to rubberstamp it at their summit this leak. The focus is on the border between ireland and northern ireland. The son of democratic president ial candidate joe biden says his service on a ukraine Gas Service Company board was a bad idea. Did i make a mistake . May be, and the grand scheme of things, yeah. But did i make a mistake based upon some ethical lapse . Absolutely not. Alison President Trump kailey President Trump viviana President Trump made whiledited claims that serving as Vice President , joe biden made promises to that ukrainian company. Global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Im viviana hurtado. This is bloomberg. Vonnie thank you. Coming up, the imf finds stagnant global trade in its Growth Outlook for a decade low. This is bloomberg. Vonnie live from new york, im vonnie quinn. Guy from london, im guy johnson. This is bloomberg markets. Stocks a touch higher. Emma chandra has more. Emma we are looking at some Risk Appetite returning to Global Markets after yesterdays negative session. All the major indexes in europe in the green, including the bluechip euro stocks, despite the ftse 100 falling into negative territory. More at play in the inverse relationship with the pound, as the likelihood of a brexit deal lifting the pound. The s p 500 and the nasdaq both in the green today as well. Really, the s p 500 surviving that slew of earnings from u. S. Banks. They were pretty mixed. Nevertheless, still seeing a gain of some 0. 7 . Well, rising. Again 00 eating and the s p putting in a gain after turning slightly cautious yesterday. Traders focusing on what they see as a path forward rather than what we seen in the past, a ratcheting up of tariffs. Earnings about to play a bigger role. If we take a look at some of the movers, they are earnings related. Weve got the likes of Johnson Johnson and unitedhealth, both thing in a beat. In Johnson Johnson, it was strength in the drug unit. At united health, medical costs are stabilizing. They are working to lift the likes of anthem. If we switch up the board again, the next couple of weeks we see the majority of the s p 500 Companies Report earnings. This gives a sense of where we are expecting to see Earnings Growth or not. Tech, and materials, even expected to perform the worst. Communications and health care expected to perform the best, but look at the big difference in those expected gains and losses. Vonnie thank you. Still with us, barry banister, stifel head of institutional equity strategy. You are looking for a weaker dollar. Im curious as to what would weaken it, and where you think it would weaken to. Barry if we get some resolution on brexit, the pound is clearly undervalued. As far as the yen being a risk off currency, technically it is still up in the air, but i actually do expect some relief there. Yuan popped up against the dollar. I think if we get any positive movement on trade, i would not back. Prised to see it is very negative for earnings for the multinationals. Vonnie so it would be a sort of side effect for better geopolitical elements abroad. What would that do to emerging potentiald to the u. S. Investment . Would you be recommending that fel put money elsewhere commending at stifel to put money elsewhere . Excessthe fed giving the reserve pop, essentially unwinding a lot of the quantitative tightening that was done in the past year, this is all positive for the world. We had a shortage of dollars, for all practical purposes. Its been very negative for emerging markets and foreign dollardenominated debtors. If you get some relief on the dollar liquidity side, i think that is positive. Sounding reasonably positive on trade. The phase one deal that may or may not have been signed or agreed basically confirms the current status quo. The problem with that is that the status quo is causing data, particularly manufacturing around the world, to decline at a fairly rapid rate. Why is status quo good for investors . Pmiy the jp morgan global actually popped up last month a little bit. Based on lagged effective chinese stimulus, it should have. China does its major stimulus in the first three months of the year. This year, they did the same thing they did the last five years. There stimulus so far, including the one announced overnight tonight, was very positive. It is trending up for the year, and it was a positive surprise. I think china is waiting for some clarity on trade to do more on the stimulus side. Granted, its target is not going to be flood irrigation style, but it is targeted. We have a lot of put options on the market, on the fed, on china, even on the election in 2020. As a consequence, i think you are seeing positive movement out there that helps mobile growth prospects. Where dothink you see the biggest if that is the case, where is the biggest bang for my buck globally . If i take a look at germany, highly exposed to the , if thisring sector stimulus comes to pass . Barry european banks are highly correlated to the u. S. 10 year yield, and we think the u. S. 10 year could pop closer to 2 and not back down into the 1. 5 range, where it recently Double Bottomed at a slightly higher low on the second round. I mentioned that back in july 2016, the Double Bottom with a slightly higher low on the 10 year yield. Similar prior year fed mistake, which the fed made in 20 15. It showed up in 2016 and results. The fed made a mistake last year, now they are reversing that. Yelleneversed hermit reversed her mistake in 2016. Closer parallels to 20152016 in the past two years. Guy barry, thank you for joining us. Barry banister, stifel head of institutional equity strategist. This is bloomberg. Guy from london, im guy johnson. Vonnie in new york, im vonnie quinn. This is bloomberg markets. Its time for a look at some of the biggest business stories in the news right now. The beats so low pro were unveiled today by the beats solo pro were unveiled today by apple, the first major redesign since they bought the headphones. Bonds plunged to record low yield. The struggling company is said to prefer a lifeline led by j. P. Morgan to that reported rescue by softbank. Bloomberg has learned the jp morgan package may include at least 2 billion of unsecured payment in kind debt. The coupon would be 15 . Option ratherhat than selling a controlling stake in itself to softbank. Shares of german payments. Ompany wirecard plunged today it found repeated questionable Accounting Practices at the company. The ft says there were inflate to prices at the company. Wirecard calls the report total nonsense. That is your Bloomberg Business flash. Guy still ahead, weighing global risk. The imf making its fifth straight cut to its Global Growth forecast. We are going to your from the imf chief economist. That conversation with tom keene, coming up next. Vonnie in ice bounce today. The s p is up 0. 7 . Unitedhealth group up almost a percent after medical loss ratio ash almost 8 up almost 8 after medical loss ratio with betterthanexpected. This is bloomberg. Vonnie live from new york, im vonnie quinn. Guy from london, im guy johnson. This is bloomberg markets. The pound spiking through 1. 27 as eu negotiators are said to be closing in on a draft brexit deal. Let me give you some other details. The deal status apparently coming from two people with knowledge of the talks. The brexit deal will hinge on Boris Johnson getting dup support, the Unionist Party out of northern ireland. We are putting ourselves in a situation where the brexit negotiators are said to be close to a draft legal tax. As i said, we are spiking through 1. 27 on this news on the cable rate. Vonnie fascinating to see what will happen with the border because the dup has said there will be no border in the water. Trade tensions continuing to weigh on the Global Economy according to the imf, making its fifth straight cut to the Global Growth forecast. Tom keene joins us to unpack the report with the imfs chief economist. Gopinath is head of research for the International Monetary fund. We are thrilled she would join us to begin our coverage of these meetings of the International Monetary fund and the world bank. I will be in washington with francine thursday and friday to drive forward this conversation. Always a good launch with your economic outlook. 3. 0 statistics is extraordinary. Recession . Ignal indeed,indeed gita this is the lowest since the Global Financial crisis, the 3 number. It is a combination of trade tensions, but also some factors in emerging and developing economies. To get to a position where we have more countries in a recession like environment, that is when Global Growth goes below 2. 5 , and we dont have that in our projection. Vonnie very good to see tom theyre a see that. Show the dynamic on china as extraordinary, down on 6 . Jp morgan models out a slowing china down below 5 in the coming years. Describe the vector of the slowing chinese growth. Is there a persistence to it, or can it recover rapidly if we get a clearing of the trade war . China is in a gradual structural slowdown as it undertakes financial regulatory tightening and the rains credit growth. We should expect a slowdown coming from that. At