Bit despite news of increased inventories. For the global exchange, where we bring you market moving news from around the world. Are bloomberg voices are on the ground with this mornings top stories. Da tart with e curran. Had positive signs since sunday, when the government said they would push through new oversight of ip protection, and they want to punish those who are guilty of ip theft. That was followed by some details in one of the state newspapers that china is also looking at the oversight of any trade agreement with the u. S. In ways of ensuring that any deal isnt limited. Then we had the news yesterday from the Commerce Ministry talking about reaching consensus on core issues. The moonbeams it is been nothing but positive in recent days, matching what is coming out of washington, though we dont yet have any further details on when or if an agreement might be signed. We have your minder did have a reminder on the economy when profit for industrial firms dropped almost 10 from a year ago. That underscores the manufacturing side in chinas economy is hurting. David thanks so much for reporting from china today on trade. Now lets go to europe, where the European Parliament has been voting to approve a new European Commission. Joining us from strasburg is bloombergs maria tadeo. Butn are in the fore, really it is climate. Maria thats right. Leyen commission replacing jeanclaude juncker. She has made climate her number one priority. She says she wants to make the European UnionCarbon Neutral by 2050. That is cutting down majorly carbon emissions. This is her number one focus, and you can see why. This is something that has really resonated across europe. Thers here are very into idea of being much more environmentally cautious. This also says the European Union needs to be more assertive on the global stage, and theres also the idea of brexit. This is still very much looming on the new commission because they will have to negotiate that trade deal with the u. K. If it manages to leave the European Union in january 2020. David thank you so much. That we go to london, where the pound fell for a second day as traders digest recent polls which show the u. K. Election race is narrowing. Joining us from london is annmarie hordern. The pound is now up slightly against the dollar, apparently on further polls. What are the polls telling us . Annmarie thats right. We have seen some pressure in the pound, even though it reversed a bit ago. These polls are pointing to the fact that we could have the risk of a hung parliament, and this begs the question, what happens with brexit . Theres going to be a key pull tonight. 2017, it rightly predicted that theresa may was going to come back without a majority when all of the other polls were saying the conservatives were going to win big. Secondly, this poll comes out at 10 00 p. M. London time, at this socalled Witching Hour between the new york market closing tokyo opening. Already during this hour, we could see rapid swings in currencies, but given the fact that we are headed into thanksgiving, a lot of traders may be leaving the desk early, we could see volatile swings in the pound. If this comes out and is favorable toward the conservatives, we could see the pound rally, but potentially if the gap narrows and is less favorable for Boris Johnsons tories, we could see some weakness on the pound and some big swings giving the time and of this poll. David think is a much. Earnings thiswas morning. Shares actually fell after the company beat on earnings, but gave a cautious outlook. Here in new york with more Brooke Sutherland of bloomberg opinion. Deere dear falling steeply this morning, all to do with that 2020 outlook. Analysts were braced for fourthquarter numbers to be not given some of the difficult planting conditions, but that 2020 outlook, people were expecting an uptick in agricultural demand. That has to do with stimulus in the Trump Administration flowing down to those farmers and optimism that we may see a trade deal. Deere is being conservative and calling for a 5 to 10 decline in that sector in 2020. David thanks so much. Finally, it is a really busy day for u. S. Economic data. We will get the second read for thirdquarter gdp, along with durable goods and jobless claims at 8 30 this morning eastern time. Mike mckee is here with more. Traders inl of the new york going over the river and through the woods. A cornucopia of data. The gdp number is not going to matter as much because it is a revision come up with the spending numbers are going to matter a lot. We saw a bit of a slowdown in september. Did that continue into october . How are we set up for the Holiday Season . People are going to be watching that. We had this faceoff between consumer and business spending for quite some time now. Consumer spending has been higher, which is important because it is 70 of the economy. Business spending is often negative, and we are expecting another contraction from capital goods orders for the weekend. If you are still around at 2 00 p. M. , the fed is going to tell you what it thinks with the beige book. Finally, cant get away without mentioning that fridays black friday doesnt matter that much anymore. People dont do all of their shopping on black friday. So ignore the hype, go get the tv if you want, but remember, we exited a very big Holiday Season last year based on the black friday numbers, and it turned out that Consumer Spending contracted in the Fourth Quarter. David thank you so much for being with us. We will have more on your morning trade and analysis of the markets in todays first take. Thats coming up. This is bloomberg. Now for the bloomberg first take, where we give you the news and you get the trade and analysis of the markets. Joining us for our inhouse team of wall street veterans and experts, Vincent Cignarella, ander fx and rates trader voice of the bloomberg audio and also joining us his Christian Lawrence, rabobank rates and ethics strategist rates and fx strategist. Are what appears to be getting toward a final resolution to phase one. The key for the markets is, thankfully, we will get to something where the talking kind of stops. At least, the outline headlines is what we dont want to hear anymore. It is not a trade deal, but a trade truce. Get to a point where at least the headlines stop affecting the markets, and we can go back to the fundamentals, back to what earnings are coming back to what really drives the economy and take this off the table. David we have a little bit of a deadline here with december 15. If we dont get a deal by the 15th, what is that going to do . Christian i think they would definitely pause the tariffs, but i am still not convinced we get a deal. Even if we do, i dont think it makes a big difference to the fundamentals. I think the risk is actually to the downside that if we dont get a deal, we get a bit of a selloff of equities. David we always talk about how the markets are responding. How is the economy responding . Are they paying any attention at all . Yelena we kind of forget about the impact on Overall Economic growth. The biggest impact comes not just from tariffs come about from the uncertainty surrounding all of the tensions. Apart, wedeal breaks will have a big impact, probably in the vicinity of 1 on gdp growth. If we do get a deal, maybe we will just stay where we are. David we get a slew of Economic Data out later today. Yelena cornucopia. [laughter] david exactly, appropriate for thanksgiving. Does that affect anything for trade . Yelena it is going to be focused on consumer. We can probably see this is impacting Consumer Spending growth. I dont think it will, although Consumer Spending is slowing for other reasons. Vincent i was just going to say, she stole my line. [laughter] vincent a big part of the talk with the trade deal is how are ceos reacting to capex, and how that investment is folding into the u. S. Economy. But for all of this year, if you look at real average earnings come up your disposable income for consumers, it is declining. Whether that is coming from a standpoint of ceos not investing , and therefore opportunities for employees to step up, get better jobs, increase their earnings or not, i will leave say, but thea to end result is consumer income is lower, and therefore Consumer Spending is likely to be lower. That is definitely going to have an impact on the economy. David david this may see really interesting point to me david this makes a really interesting point to me. The fact that they are not investing, doesnt that Say Something about what they are thinking about demand coming up . Christian in theory that is true, but i would argue over the last 10 years, we have seen this divergent i way from realworld investment to the financial world to share buybacks. I think thats one of the reasons we havent seen very strong growth over recent years, and one reason why we are not likely to Going Forward. But the point you make about the consumer is absolutely key. The consumer is holding up u. S. Growth. If the consumer starts to slow down come of the recession indicates there will be flashing red all over the place yet again. That wont happen today, but Going Forward, we can expect that to continue. David when we talk about capital investment, we automatically think about productivity. If we are not investing, what does that say about growth and productivity . Yelena our longstanding view on productivity has been, if we makeome signs of companies a lot of money, and they have to pay a lot to compensate for the labor, then they will start investing because it will be profitable for them because it will not be profitable for them to keep paying the labor market. We will see growth in productivity one way or another. It is just going to be a very slow process. One thing we are forgetting about today, gdp data will be important because we get corporate profit data today. In q2, corporate profit bounced up after some declines in the previous quarters. We will see whether they can bounce or not. If it continues to grow, that creates an essential condition for growth in the future. Not a sufficient one. We still have a lot of uncertainty. But that is a positive sign if we see corporate profits grow. David but does the market care . They seem to want to drive the prices up no matter what. The earnings were ok. They werent great this last quarter. Vincent no, but it is such a low bar to beat the earnings expectations. I love that analysts do this. The idea is that we have all these headwinds coming on us and profitability is going to be declining, well, you set such a low bar that it is easy to overcome. The reality is it does come down to earnings at the end of the day. If corporate profits do continue to beat and grow, you will see the market grow. Albeit, i think, at slower rate of change. That is what is going to be interesting for 2020. Will we grow . Yes, but what will be the rate of change . Will it be sufficient to have a earnings drive equities higher . Christian mix a good point, we will not see recession numbers today. Theres all this talk about how tariffs were delayed, and that may be brought forward First Quarter. It is ending from corporations to bring inventories in. We wont know that until may be the end of march. If the consumer did exactly what corporate did, which is bring spending forward into the First Quarter, 2020 could be a very disappointing First Quarter. David weve got this whole discussion about Monetary Policy without talking about how cheap money is. We should factor that in. How much of the high values in the equity market are sump because theres so much money out there searching for yield . Christian it almost feels at the moment that if u. S. Data comes up strong, we see equities rally, and if we see data weak, we will see the fed cutting, and the equities rally. Lack ofalk about the Consumer Price inflation, and there is a lack of that, but we seen a lot of asset Price Inflation essentially. Ultimately cheap money make up for the essentials . We had deere come out this morning. Its forecasts were disappointing people. Stock is down right now because its got problems with trade, agriculture, and construction. Cheap money doesnt necessarily fix those problems. Christian i would argue it causes more in the way of structural problems. It hampers growth, and you dont get wage growth. We are seeing unit labor costs rise quite a lot for companies. Mark becomes,ion how long can the equity really continue . David what, if anything, will it indicate about the Fourth Quarter as opposed to the Third Quarter . Theres a lot of apprehension about what the growth rate is for the u. S. For the First Quarter. Telling usicators that growth will slow down below 1 . We are not in that camp. Todays data on personal income and spending will take us will tell us a lot about the Fourth Quarter. If it falls significantly, we will Start Talking about fed cuts again. David if you are a trader today, it is thanks giving tomorrow. Are you basically sitting on your hands . Vincent oh yeah. [laughter] vincent the Trading Community right now, half of them are hung over, and the other half cant wait to be there. You dont do a lot the day before thanksgiving. You try to hold a lot going into it, especially now. With the headline to bombs that could hit over the weekend the headline tape bombs that could hit over the weekend, theres so many things that could disrupt positions. You dont want to be in the camp that is better lucky than good. David you want to keep it pretty safe because you dont know what is going to happen. Vincent you can always get back in. Theres so many peaks and valleys, if you miss one, theres always another opportunity around the corner. David christian, what are you looking for in the Fourth Quarter . Christian theres been a lot of selling of vol recently. When we look at the currency space, we are seeing record low volatility. The issue is when we start to see that, we see more people we seeg and straddles more people engaging. Thats what people will be trying to be flat as we head into the weekend. David weve got about an hour and 10 minutes before all of that data comes down. What is the one youre looking at the most . Absolutely Consumer Spending. We will also be watching thanksgiving and black friday and all of that fun holiday sales. We dont expect a very strong reading on holiday sales, actually. We are only expecting Something Like 3. 4 growth from last year. Was weak last year because of the government shut down, but overall we will see some slowdown. David many thanks to Vincent Cignarella and Yelena Shulyatyeva of bloomberg. Christian lawrence of rabobank will be staying with me. You can run gtv on your terminal, browse recent features, and save your charts if you want by running gtv. This is bloomberg. Viviana this is bloomberg daybreak. Lower in deere premarket trading. The maker of Farm Equipment delivering a weaker forecast than expected. They say sales may fall as much is 10 . Deutsche bank selling another chunk of unwanted assets to Goldman Sachs. The latest seo involves securities as a notional value of about 51 billion. They are tied to emergingmarket debt, previously housed in deutsches wind down unit, where it has been able to compete. Dell has lowered its annual revenue forecast. Component shortages from chipmaker intel hurting growth prospects. That is despite surging corporate purchases of new personal computers. Still, dell faces falling demand for services and networking gear. David for more on tech, we are going to talk now with Christian Lawrence of rabobank, who is still with us. The valuation is pretty high. The s p price index is up pretty high. It is up the highest its been since 2009. What you make of tech . Christian it is interesting because tech is such a broad category, but we can break it down into those that are more value driven and those that are more growth driven. I think that is key. When we look at the s p 500 this year, we can see a fairly Straight Line higher. If we break it into those components, we see quite High Sensitivity to Interest Rates. When Interest Rates are going up, we tend to see value outperform growth. That is true within the tech space as well. Im always a little reticent to group them as one entity when really, tech stocks very a lot. David is it Growth Driving the high number . Christian it really depends on what the Interest Rate environment is like. At the moment, it has been Growth Stocks. It was different last year, when it was mainly those value stocks. David it is near 12 year highs and valuations. Does that make you think this is not the time to go in . Christian you could say that about a lot of equities. If the fed keeps money cheap, we can continue to see asset prices rise. It is not nec