Anna dup says no. Sterling slides. Northern irish allies cannot support the brexit deal as it stands. By billion to shareholders 2022 as Sales Estimates are missed for the Third Quarter. A president ial meltdown. Pelosi accuses donald trump of hurling insults at her after lawmakers criticize his withdrawal from syria. Republicans say the speaker was at fault for walking out of the meeting. Good morning. Less than 30 minutes until the start of cash trading and equities. Is almostng the pound all that matters for the moment. Every minute it seems we get a new headline on brexit. I just heard you talking to and the poundra, has come down. It is weaker in dollar terms. 127. 56. We will no doubt have this chart up for most of the day and most of the week, and maybe most of the year. Take a look at teachers. We do see a mixed picture with weakness in the pound comes a little strength. Dax futures and cap futures are down. If you look at u. S. Futures, S P Dow Jones and nasdaq many contracts also trading down. We are seven hours ahead of the u. S. Open on wall street. Anna lets remind ourselves where we have been on the brexit story. When we watch what is happening with sterling, we see the sterling market, stock equities moving on every twist and turn of the brexit saga. U. K. Domestics very attached to this story. The ftse 100 has seen a negative correlation. This remains a market moving story. We have seen these headlines, to go to suggest reasons doubt the deal comes through. The main sticking points remain when it comes to the dup. It looks as if ground had been made up but perhaps that is not the case. The arithmetic remains difficult. What are we hearing from brussels . I am sure that is their main concern, and what can Boris Johnson even do to win over the dup . Anna to give you the latest signs on what the dup has said, they have three objections, one is customs and the way custom checks would be conducted. Vat is a late entry into the area of disagreement. Consent remains a big issue for the dup. And was topical last week in Northern Ireland, and it remains so. It looks overnight that progress had been made, but maybe that is not the case. The u. K. Government reacting to what the dup has said, and says talks in brussels are still to come. They have somewhat of a holding statement. The dup does say conversations with the government are ongoing. We look for those conversations to continue. Lets get a market perspective. Great to have your perspective. It is exhausting watching the breaking headlines as to whether a deal is close are not. The market is focused on this because october 31 looms. This could get kicked into next week or beyond. It is an ongoing saga as many people are calling it. It shows how big of an issue the irish border is. This issue has been an underlying problem since day one. Adding parliamentary approval for it, theresa may got scuffled three times. It seems there is a lot more work to do to convince the dup that this is worth signing on to. Matt it is amazing we do not see more of a reaction in the pound. I know there is a lot of volatility, but if the dup says no, what is going on . Do you think there is a lot of action in the currency . We have had so much good news ,his week that any setbacks they seem to have overcome them. Everybody is a little cautious. The response we have seen makes sense, but if we get in the coming hours and later in the day were the dup is not on side, the move lower we have seen in sterling that has been modest will gain traction as the day goes on. Dup, any negotiating partner says no until they say yes. We have no idea if they will say yes. We will keep glued to the bloomberg feed to see if we get any further update on their position. The way the stock market has performed recently, u. K. Stocks have been lifted, they have been lifted by expectations of a deal and we see them moving on that. Is that something you focused on . Largecap u. K. E. Tocks move with the pound as it goes lower, though stocks go higher. The midcap stocks are the ones that become interesting because they will rise if we get more optimism on a deal and more resolution. There is a bit of a dichotomy. Still, the main way to gauge brexit sentiment is to look at the currency. What we have seen this week is optimistic. Richard jones, you go back to your keyboard and we will look for your updates. Mliv go on the bloomberg to get his updates. Lets get to an earnings story, eriksson has raised its sales target on signs that spending on a new five g network is speeding up. They have reported thirdquarter results that beat analyst estimates as u. S. Authorities seek to limit huaweis influence over 5g. Eriksson has picked up contractors. Joining us now is borje e. Ekholm, president ceo, telefonaktiebolaget lm ericsson. What kind of increase are we looking at in terms of 5g orders . The fiveyear penetration is rapidly gaining momentum. And over the last two years it has been accelerated by over a year. We see the drastic acceleration of demand of 5g. So far that is driven by north america. Lso korea those markets are driving the 5g demand now. I know youk want to talk about your business and not problems other businesses are having, but do you see evidence of the huawei affect . Is there any evidence about putting your numbers . Borje we cannot see any impact in our order books as of today. , the geopolitical situation has caused more uncertainty, and i would be more uncertain than normal. That is more of what we are seeing. We are not seeing any positive news from this. To see anyou able increase in margins as well . I know a lot of times in order to gain market share to get an edge over your competitors, you will have to give better prices. O customers how do you see margins developing now . Borje we have seen during the or i should say, part of our strategy we laid out in 2017. In important part was to gain market share. We already invested in taking contracts and new market shares. What we tried to do, take contracts where we have a clear competitive advantage and technical advantage. We have seen we continue to gain contracts. Very positive in the longterm, but they may impact the Third Quarter. It is a marginal impact, a small impact. Forward, we seem no dramatics compared to the Third Quarter but we will continue to take those contracts. Confidenceo you have to upgrade your guidance today even with the backdrop of trade tensions threatening Investment Decisions . Why have you decided to be as positive as you are . Borje a couple of reasons. Is the increase of 5g in the world. 5gare seeing big demand and demand developing in other parts of the world, the middle east and asia. We see slow pickup in europe. We see a number of opportunities. Acquisition made an which is safe to us. See a headwind from the currency. When you add that together we forecast toed the 20 billion kroner. Matt borje e. Ekholm, president ceo, telefonaktiebolaget lm ericsson, thank you for your time this morning. Eriksson with earnings at a revised forecast to the upside. Rocky road. Levers we will get analysis of their earnings next. Bloomberg radio is live on your mobile device or dab Digital Radio in the london area. Tune in. This is bloomberg. Anna welcome back to Bloomberg Markets european open. 15 minutes until the start of the equity trading day. But see futures expected to rise because of weakness in the pound. Word get a bloomberg first news update. President trump is defending his decision to pull u. S. Forces from northern syria. He is fine with letting russia filled the void. The president says it is a lot of sand. RebukedParty Resolution the decision. Secretary of state mike pompeo is blaming turkeys president for the crisis. Volvo is electrifying its lineup and footing the bill for customers to plug in. They are launching their all electric vehicle and has a plan to shrink its carbon footprint. It is coping with a global sales slowdown. To cut costs, is merging with a chinese parent company. Profitabled to be but in low volumes you have to understand the cost level will be higher. It might be a lower profit wegin initially, but what believe is that an ev car will have a higher value for the longterm it the is the right thing to do. You need to earn more to be rich, according to one metric to get into the top 1 of u. S. Taxpayers. You need to earn more than 500,000 a year. Since 2011 that has gone up by a third. The only group that beat those gains, people who are even wealthier. Global news, 24 hours a day on air and at tictoc on twitter, powered by 2700 journalists and analysts in more than 120 countries. This is bloomberg. Matt thank you very much. Sales for the Third Quarter trailed estimates, rising 2. 9 . Most analysts are forecasting higher than 3 . The company maintained its fullyear targets of growth at the lower end of its range. Lets speak to one of those analysts now. Alicia forry, consumer analyst, investec bank. What is the problem matt unilever . Atwhat is the problem unilever . Can they get back on track for the full year . Alicia i think it is a bit of a challenge, but the guidance implies there is no need for growth to accelerate in q4. It is worth pointing out that q3 had a very strong comp, a very tough comp. We had good weather in europe which boosted ice cream sales. There were better numbers from brazil that made it tough this quarter. This is a disappointing result this morning, and management needs to show the market that it has a plan for accelerating growth. What does the Product Portfolio look like to you . Food, of course, and increasingly beauty. Where should the business be focused under new management in developing the portfolio . Have an unusual structure in this business. This is an historic reason for this. This combination worked well when they were first breaking in. Now that unilever is entrenched in its emerging market, the rationale for keeping food and health care together has been reduced. It is possible that longerterm there may be a bigger move, but in the meantime what they are doing are the right things. They are focusing on premium brands, acquiring in that space for nietzsche brands for niche brands. They have made about 30 acquisitions over the last 3. 5 years. They are taking actions to diversify their portfolio better, but there is more they can do to streamline as nestle has been doing. Matt what do you want to see before you make a decision to buy more shares . What does unilever have to do to convince you this is a stock to buy . Business, is a great but the issue with unilever has been this tradeoff between growth and margins. What we need to see, the pendulum has swung too far in favor of margins, so we really need to see from the new ceo what his plans are for turning around the Growth Profile of unilever. It is starting to lose momentum versus its peers. We want to see a credible plan in place for how he intends to reverse that situation. Matt alicia forry, consumer analyst, investec bank. We are minutes away from the open. We will talk about stocks to watch. Another consumer name, nestle, ae food giant plans to return giant amount of dollars, 20 billion to investors between next year and 2022. We will explain. This is bloomberg. Anna welcome back to Bloomberg Markets european open. Five minutes until the start of the Equities Trading day. Lets get the individual stocks in focus. Annmarie hordern is looking at ericsson. We are also covering nestle. Swedish two companies that move in different directions, eriksson raising the 2020 forecast. They beat, sales came in soft. Get to sam on nestle. What is the story . Sam as you mentioned, nestle intending to return money to shareholders, 20 billion which is significant. They are also creating a division for m a, they are looking to expand and make deals , and return money to shareholders. Much. Thank you very you can get the latest stock stories from our Equities Team by going to first go on your bloomberg, and get the first word news on your mobile app. Coming up, the market open. Brexit is skewing the scale. Stay tuned. This is bloomberg. Matt we are a minute away from the open of cash Equities Trading this morning across europe and in the u. K. Lets get over to Annmarie Hordern in london with a runup to the open. Annmarie msci asiapacific, asian equities a doll session. We did see a dull session. S p 500 futures pointing to a lower start. Oil down 0. 9 . Chart increase in u. S. Stockpiles sharp increase in u. S. Stockpiles. The dup says they cannot support the brexit deal as it stands. Anna edwards is in brussels. The ftse 100 is green. We are seeing a weaker pound. Dax skechers down. Down. Futures we are seeing a mixed picture in terms of the futures market. It is 8 00 in london. We are looking at the start of european trading. Ftse 100 trading to the upside. Will we not get a deal . There seems to be growing determination, but the dup cannot support it as it stands right now. One big question is vat. Ibex down 0. 2 . Beside the ftse 100, we are seeing weakness across the european sector. British pound down 0. 5 . It is moving on every headline. In the sector picture, it is mixed. Energy and materials are looking in the red. Iron ore, everyone is concerned about the supply on a market that is already oversupplied. Staples is looking at a mixed richer. We are seeing a lot of red. Nestle announces buyback, and unilever falling short. It is not selling enough ice cream in europe. What are you seeing in individual movers . Anna i am seeing more losers matt i am seeing more losers than winners. 200 up, three had 60 down. Ericsson is the biggest gainer and the biggest addition to the stoxx 600 with 5. 5 jump this morning. It added almost a point to the index. Unilever is also a gainer regardless of the ice cream outlook. Unilever is up almost 2 this morning. Glaxo, some oflack those rising incipit the. You do not see nestle on the upside. You see it on the downside. The biggest point loser on the downside this morning is pandora 00 firstquarter sales missed estimates. Then you see lloyds down. Nestle off 0. 2 . It takes points off the stoxx 600. Anna european markets opening lower. The ftse is the sole exception. The pound fell after the dup says it will not support the brexit deal as it stands. It puts the chances of an leaderst in doubt as eu meet here in brussels. What has the dup been saying . It is surprising that we have this pushback on the consent process, because some reporting suggests progress had been made on finding Common Ground on consent. Remind us of what the dup objects to . In Northern Ireland, in the Republican Community wants to join irish republic. In the parliament in northern can blockne party with a third of the seat. It is called a petition of concern. It appears the dup does not want to give up the ability to block something with a third of parliament. The Irish Government is worried about one party having a veto over everything else. They say they need to see a majority the edo. Majority veto. There would have to be a majority of both communities. Dup does not appear to have shut the door completely and support the deal as it stands and it will continue to work with the british government. There is more work to be done. Matt thank you very much. Bill smead,ow is sam unsted ceo cio, Smead Capital Management. Let me get your take on the importance of getting a deal done. How key do you think it is . Seemsin the world it just like political concerns and those things dominate the attitudes of investors. While simultaneously the price of money is microscopic around the world, which causes in moneys to be discounted into higher amounts than it would be if Interest Rates normalized. Puzzle,e piece of the and in the United States is the trade war running simultaneous to that. It gives plenty of uncertainty to people. We just ignore that in general because we cannot control it, and there is always Something Like it going on. There is always something crummy going on that affects the attitude of investors, and that is why we choose not to act on that. High on your radar does this play . For anybody in the u. K. , investors are those exposing themselves to u. K. Assets, they see the crucial story, but from the International Perspective is it something that stays in the background . Bill it ultimately will. Six or seven years from now, people might mention it in some history. Thing that is of critical at the moment. In 10 years people will look back and say, why exactly did we factor that into our Investment Choices . You pay a high price for a cheery consensus. If this is weighing down certain securities that are meritorious, you should be buying them. If it increases the value of other securities, you should avoid them. You went through those staple stocks. In the United States and obviously in europe people are overpricing stability. They are overpricing growth in the absence of growth. And what is compounding that is the incredibly low interestrate. When Interest Rates normalized in 10 years, the discount goes up quite a bit, and secondarily a completely different set of worries will take over. Marketss who used the psychology to their advantage will benefit. Matt we will keep you with us. Bill smead, our guest cohost this morning. We will come back and talk to ,ou more about those stocks more than 1 billion value funded at 18 so far yeartodate. Up next, the stocks on the move including ericsson, they raised their sales target as phone carriers boost their 5g span. This is bloomberg. Matt welcome back to the european open. We are 11 minutes into the trading day looking at a picture of the groups that are moving this morning. You can see more down than up. Resources, food, beverage, oil and gas, banks all down. On the upside you have personal household goods, those will be some of your staples. Staples on the upside. Utilities, tech and health care are rising. Some defensive stocks, but also with tech some growth names. I want to mention quickly a ondline coming out of berlin ro