Black friday discounts in france, dozens of anticapitalist and environmental activist staged sit ins outside amazons french headquarters northwest of paris. They blocked two depots before being cleared out by police. Protesters have blamed the online giant for the introduction of black friday in france. They say it contributes to hurting the planet. Global news 24 hours a day, on air and tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. Am ritika gupta this is bloomberg. Romaine 12 00 and new york, 5 00 in london. Live from bloomberg world headquarters, i am romaine bostick. Taylor i am taylor riggs. This is Bloomberg Markets the close. Romaine London Bridge under lockdown. U. K. Police say a man has been shot after a terrorist incident. A mixed message from germany. Unemployment falls on a national audi, but daimler joins and bmw in announcing big job cuts. And we announce how private equity players are beating warren on the deal front. All that and more is coming up. Taylor lets first get a check on these markets on this holiday shortened day. We are focused on some of the record highs we have had on wednesday and then the tech index falling from those record highs, off. 2 . We pulled that into the vix, which previously closed near a one year low, rising a little bit off of that after that terrorist attack you mentioned, still with a 12 handle. We are looking relatively calm. Crude continues to plunge lower. Energy is the worst sector performer in the s p 500. We got increased oil output this morning from the eia. That means prices are following are falling, and of course it is black friday. All eyes are on target. Shares falling just a little bit but up 90 year to date. Target and best buy, some of the best performers in terms of the strong foot traffic we are seeing overnight. I want to dive deeper into this Market Action with all of our market reporters from equities, bonds, currencies, and commodities. Team, what are you seeing . Right now i am seeing you cannot take the day off. Things do happen on black friday. U. S. Stocks are at a record versus the rest of the world. What i am looking at is mainly the etf that tracks the s p 500, the ratio of that and the country world index exu. S. That has pushed forward to a new record on a backdrop that is very different than what we have been trading through for much of the last three months. It used to be if yields were down, you knew the u. S. Was beating the rest of the world and you new growth was beating value. You can see from these three lines, this correlation between this one trade risk on, risk off backdrop has been ebbing hard. The one constant, even as we get more about Global Growth is u. S. Stocks continued to beat the world. Gold has been up for the day but falling on that trait optimism. Take a look at this chart. The etf that drives a big chunk of the price action for this commodity. Look at the fiveyear chart at you will see those outflows today are really representative of how big the goal rally has been. Those prices are still elevated. Analysts say they could go up to 1600 an ounce, even 4000 according to some bats. Interesting to see what will happen as we going to the Election Year. Romaine thanks to everyone on the market seen. We want to turn to the developing situation out of london. We know armed police shot a man after a possible terrorist attack in hundreds running for their lives in the heart of the city. Police said several people were believed to have been injured just before 2 00 p. M. In the London Bridge area. Your the latest is alex morales of bloomberg news. Lets start off with the potential victims. What we know about the number of people harmed in this attack . Alex we do not know anything about the number. Police said eight number of people have been stabbed. There was a lot of panic on the bridge. People running away. We know the azalea seems to be shot by police. Emma taylor it has been taylor it has been about three hours since the initial reports of the attack. What are we hearing about whether this is a confirmed terrorism attack or not . Alex the head of Terrorism Police announced that half an hour ago and he said it is being treated as a terrorist attack. The london mayor confirmed that, he praised the heroism of members of the public who went to tackle the azalea before Police Arrived tackle the salient the lient before Police Arrived on the scene. Romaine we know we have a big election coming up. Has this had any affect yet and have we heard from Boris Johnson . Alex it is too early to see if it will have any effect. What we know is Boris Johnsons conservative party tends to poll better when it comes to issues of national security. The Prime Minister has come out and said hes being kept abreast of the situation and i think he is being briefed by the metropolitan police. Romaine our thanks to bloombergs alex morales. We will keep you updated on that situation in london. Taylor i want to turn to some of the macro news overseas. German Unemployment Rate unexpectedly fell last month despite signs of manufacturing stabilization and easy trade tensions. For more i want to welcome Bloomberg Economic executive editor simon kennedy. You heard me mention the trade fights we cannot stop talking about. My question is that at least here in the u. S. Market continues to make record highs. Do we care about the trade fright the trade fight . Is it having impacts . In the worldrkets economy have been copied between the politics you see in the trade war, things like exit, and on the other things like liquidity from central banks. The market hitting a bit of a high and the liquidity from the Central Bank Rate cuts. Also the sense it will be some kind of phase one deal in the coming weeks. Romaine when you look at the potential for that deal, are we talking about a tangible effect on Economic Growth, or is this more a sentiment play at this point . Simon it will probably be a sentiment play. There are companies that incited the trade war as a that cited the trade war as a reason not to hire. The question is how big is this if it is going to deal with some of the real issues between the u. S. And china. These deeper issues like ip will remain. For the moment, we have markets at the point where they are keen for any kind of deal to stop the rot we are seeing through most of this year. Taylor between the u. S. And china, who needs a deal more . Simon is a good question. Both sides argue the other. We have seen suggestions from china they are willing to play the long game. President donald trump one some form of deal in Election Year and the chinese are aware of that. In the longer term economically, china needs a deal. The chinese economy to some extent is built around trade more than the u. S. It will be one they will want to get a trade deal with the u. S. A little more. You are starting to see that in markets, markets tending to outperform in the u. S. Rather than in china. China has a debt issue which is very much in the news at the moment. All in all, they both have reasons to want to deal and both reasons to stick it out for a little bit longer. China needs to deal a little more. The last couple of times we went through these midcycle downturns in 2013 and 2016 and assuming we are in a midcycle adjustment now. The last times we got a big boost from the chinese growth story. That does not appear to be there this time around. Can we get a little bit more of an upswing to Global Economic growth if china is not a main factor in that equation . Romaine what you of simon what you have seen in previous cycles, jp morgan out with a report saying we are in the third wave of another midcycle adjustment where the economy , sos but does not crash out the forecast are for growth to stabilize a little bit into next year without bouncing back dramatically. The chinese have their reasons pumpo come to the stimulus. They feel debt is high throughout the economy, various sectors, and another rush for stimulus will create more longerterm problems. It is the World Economys longerterm issues that china does hold back. Can it continue to grow without china providing impetus . It can. Chinese growth has come down from 10 to 6 . That is still a boost to the World Economy as a whole. The fed has cut interest rates. Slight fiscal support. Germany stabilizing after recession fears. There is enough to support the World Economy into next year even if china does not suddenly rush to the pumps. Romaine great stuff. That is Bloomberg Economics executive editor simon kennedy. Plenty more head on the show. Stick with us. This is bloomberg. Romaine from toy stores to electronics outlets, it is the moment retailers have been preparing for all your long. Black friday is underway in the u. S. The National Retail federation expects more than 100 65 million black friday choppers, each spending over 1000 over the whole season. Joining us to talk about it is bloombergs and riley moffat who leads our coverage at bloomberg. I already bought something today. I logged online and looked at the deals and saw something i like. Am i a harbinger of good things to come for this season . Ann you said you did it online and that shows you how black friday is changing. We are not seeing people line up like they used to. 2007, 2008 you saw people swarm walmarts and by teepees. That is not what black friday and buy tvs. We saw a lot of these companies rollout promotions in october. A lot of Online Shopping has already took place. A quarter of presents have already been bought. You do not have to wake up and stand in the cold anymore. It is changing. Taylor have there been any big missteps today . Anne we saw some yesterday. Because there was a lot of Online Shopping on next giving itself, we saw costco website down for a couple hours. Nordstrom was down. Slowness on home depot. It is a bit of a glass half empty halffull thing. It is great if people want to go to your website, but if they get frustrated they will leave things in their part. Today it looks better, but we will see. The day still has many hours and we will see if there are other glitches. Romaine there has been talk about this idea there are six fewer shopping days this year between black friday and christmas than what we had last year. Does that have a real impact or to people just spend the same amount of money . Anne i think it is an excuse. If you have 11 people you want to buy gifts for you will still buy the gifts. You are right that is condensed. Christmas will sneak up on people. I do not think anyone will spend less because people started spending online weeks and weeks ago. If you are savvy, you went online back in july and started buying presents. Stick them in your closet and save a lot of money. I think most analysts are expecting total sales to be up about 5 this year compared to last year. The short holiday is just an excuse. Taylor our thanks to bloombergs anne marie moffat. I want to bring in charles oshea, moodys Vice President and senior credit officer who joint who covers retail. He joins us on the phone. Does black friday really matter given how long the shopping season has become . It still matters, but not nearly to the extent it did 10 or 15 years ago. The season has become longer and longer and longer. The season does not end on december 31 for us. We look at january as well because you see the return cycle and then on the consumer electronic front the two weeks up to the super bowl are huge tv and home entertainment. It gets longer. It is different every year. Every year we will see different performance in brickandmortar on black friday. You will see more online sales. The distribution of the online sales will continue to evolve. You are seeing more on the brickandmortar side. Amazon is still amazon. Some of the bigger brick and mortar guys have gotten much better online and theyre picking up more sales in that category. Romaine one thing we saw over the last couple of years as people continue to spend, they are buying more online but the cost for the retailers to fill these orders has gone up as well. You end up with a season where margins get compressed. What are you expecting on that front . Are retailers better managing those margins . Charles we focus on operating income. We are not sales driven. We want to know how much you make, not how much you sell. This season with amazon spending what it is spending on prime day and its little brother, sameday grocery delivery, you already see amazon guide it may not make money as a retailer in the Fourth Quarter of 2019. That puts a lot of pressure on the rest of retail. Anybody can ship for free. Shipping is part of fulfillment in our world. It is not free to the retailer, it is free to the consumer. How much is the retailer willing to absorb . This holiday will be a litmus test for how much amazon will be absorbing. We estimate they will spend 36 billion dollars on shipping for 2019, that is up 8 billion or 9 billion from last year, how much of that will they be able to recoup in membership fees . How many brickandmortar retailers will be able to do that . Not many. Shareholders will not let them. At some point you will start to see this evolving more in the retailers will have to charge for things that were previously free. How much will the consumer be willing to spend . Margins will be compressed this holiday and i think what you will see as retailers, when you combine the promotional impact of Free Shipping and discounted shipping on top of price promotion, you will see retailers walking away from the limbo bar saying it is too low, we cannot get under it, we will let somebody else take the sale and live to fight another day. Note on yourn your coverage list is target and best buy. Raymond james coming out with a note saying those stores saw the strongest foot traffic overnight and they are poised to outperform. What are target and best buy doing that other stores are not . Charles they have been doing it for a long time and they have been setting the tone with Investment Strategy and other Strategic Decisions for the last several years. Best buy has been on a seven year or eight year program to improve the store experience, improve the customer service, improve the capability of the salespeople so they can offer consultative experiences for the customer. Target went back to the past and rget again with all of the private and exclusive labels. There are 20 plus of them out there. They have been very focused on our stores matter, but online matters as well. We have to find a way to integrate the two. Target is using it stores to fulfill orders much more than best buy does. Best buy is focused on delivering out of the Distribution Centers that also stop the stores. Efficient, it is more efficient to ship out of a local store, it is more efficient and it is cheaper. They have good strategies, management has been religious about implementing and exit, and i have to say the board of directors of both of those companies, and i will put walmart in the mix as well, they had a lot of guts when they signed on for several years of we will sacrifice shortterm profit for longterm competitive advantage, which will lead to more profits. It certainly paid off her walmart, target, and best buy. Goaine quickly, when you from the Department Store segment and you look at specific brands and company brands, who do you see as the winners this Holiday Season . Charles i do not cover the Department Stores directly. It is definitely a challenge segment. Some of the Department Stores have very good Online Business and it has gotten lost in a lot of the noise around the performance. The Department Stores are in the same situation. They need to be able to invest and they need patience from shareholders and the board to allow them to implement the strategies that have worked for other retailers. That is something that needs to happen Going Forward. Romaine thanks for joining us. Charles oshea. Moodys Vice President and senior credit officer. Shares of dollar tree taking a hit, blaming rising costs on chinese tariffs. That is next. This is bloomberg. Romaine time for our top calls. A look at movers on the back of analyst recommendations. First up, ubs lowering its price target on john deere to 169 from 180. The analyst deciding the Company Outlook for 2020 and the expected decline in construction revenue. You can see the shares down. 3 . Next, rbc Capital Raising its price target on burlington stores, maintaining the outperform. The analyst setting changes to the csuite and accelerating comp sales. Sales down. 2 . Finally, Atlantic Equities downgrading dollar tree to neutral from overweight. The analyst deciding earnings that trailed estimates and reduced profit forecast. The shares moving lower by 1. 5 . Those are some of your top calls. Time to get a quick check on some of the latest business flash headlines. I will start with mercedesbenz parent daimler planning to cut thousands of jobs worldwide by the end of 2022. The companys personnel keep all bloomberg more than 10,000 positions are likely to be limited. Daimler is trying to revive Profit Margins that have been squeezed by heavy investment in electric and self driving vehicles. Rivals bmw and volkswagen have already mapped out similar cost cuts. Shares of british ecommerce surged after agreeing