The 1. 82 mark. A couple of stocks i wanted to point out, this is a Cancer Treatment company, and its been bought by merck at a huge premium. Nicestock is up 103 , so a return for arqule investors today. , down a downgrade at citi 0. 75 . News we got a moment ago, goldman coming into the wework cleanup. The way it works is, and this is goldman stock, which has been moving around, slightly lower, wework is going to be a borrower with softbank. This is supposed to bacon more palatable to other lenders to make it more palatable to other lenders. Apparently goleman has reached out to other banks to see if they want to get involved as well. It is keeping softbank in the game, part of a restructured doingt plan, 1. 1 billion away. The 5 billion plan will come into place, and apparently this loan structured from goldman should be in place by the end of the year. Guy bonds continued to tell a story that the market is not completely convinced by what is happening here. This is what is happening in europe right now. Stocks a little softer, but we had a big pot friday posey payrolls. Pop friday post payrolls. Youve got a slight bid in the bond market. We are going to get more german data out this week. Nevertheless, a small bed with 30 on a german tenyear. The u. K. Clearly focused this week with one of the guest risk events. Boris johnson returning to his key election message that only he can deliver brexit. The conservative party is on course to win a majority in thursdays election. The markets a little jittery on this. Kapteyn, ubs global head of akamai can strategy research, joins us now. The skew inpushing exactly the opposite direction. The market appears to want to conservative victory. Market isnt dissipating a conservative victory. Not entirely convinced that that is going to turn out to be the case. Arend i think thats because what happened in 2017. On the last set of poles into election night, you got this huge gap that was basically closed, and i think you are seeing a willingness on the part of Market Makers to take a directional bet and say this is a done deal. Largest gap you have ever had an election and got a Hung Parliament was in 2010. Youre now in the polls, you seem to be above that range, yet the market isnt quite there yet. Guy one of the other expo nation is that it could be a the other explanations is that it could be a buy the rumor, sell the facts story. If Boris Johnson is able to deliver the exit from the eu, the reality of having to get a trade deal with the eu is some big be market will have to contend with. Johnson says he can deliver it in a year, the market is beginning to wonder whether that reality is something we should bet on. Arend no one is excepting the economy to really take off. I think you get a nearterm bounce from very depressed levels, but effectively adjust for mains a very uncertain environment where the u. K. Goes sideways at 1 or so, and nothing really improves. If you are trading sterling, go a little higher, but it is difficult to see it popping far above that. Vonnie we are waiting on some trade deals this week, the potential for a u. S. China trade deal. What happens if these global trade deals underwhelm . Thed its a bit unfair but market is expecting. Baseline is you get a phase i deal. You dont get the december tariffs. The big question is what happens to the september tariffs and potentially the may tariffs. Our simpson is that those do not get rolled back, so we have quite a bearish baseline in terms of what happens next. But the market may be expecting some degree of tariff rollback. If you dont get that, you could get a bit of disappointed. I think we have a trade war monitor where we try to extract levels of optimism and pessimism trade sensitive assets. Those are basically saying that the fear of the trade war is almost entirely priced out. Andie if that is the case the market isnt satisfied, do we see some sort of major mispricing, or is it just at the margin . Arend i think it is probably at the margin. My sense from speaking to clients is theres a real desire here to try and pull the bond in cycle. A lot of people think they see green shoots. Insee some improvement inventory ratios. If you get some sort of confirmation that things do not him materially worse, that is probably enough for people to stay in their equity exposure. If it is a material disappointment, who knows. But my sense is the market once to go higher here. Guy do you think Christine Lagarde at the ecb is going to show in her first meeting this week these green shoots . Do using she sees europe starting to turn around . [laughter] arend not a shes looking at europe. At germany. We dont see those green shoots. Theyre going to have to revise up the 2019 numbers. They will release the new forecast on thursday. But if you look at where things are tracking in q4, it is clearly weaker than q3. We have think we think we are a step down from q3 growth levels. It was the case until recently that most of the weakness was in numbing factoring economy. If you were looking at that data, you wouldnt talk about green shoots. Guy when it comes to the markets, is there a case to invest in europe next year . Does the better Market Performance in 2020 come from within the unit states with an economy humming along quite nicely, and you can see that with the jobs data . Or does it come from europe, which is weak, but kind of already priced for weak . Arend we think the catch up this year. In an environment where trade is very weak and europe is a very cyclical economy, it should not have traded as well as it did. You need to remove all of the trade war risk. You need to see global trade rebound. You need to see all of the trade sensitive sectors come back. That, and our outlook, is very unlikely. We think the u. S. Is probably going to upper from europe. Vonnie Christine Lagarde is undergoing a whole review of Monetary Policy and europe. The last time that happened was something next 16 years ago. We see any major change over the next year or two in terms of Monetary Policy . Arend it is unclear what shes going to say this week because she havent even defined the yet. E of that review her testimonys adjusted it could be quite ride ranging, and literally everything is on the table. ,he target, the decisionmaking the effectiveness of their tools, etc. But the council has not yet decided on this. One of the Big Questions is do they start to narrow the scope or question what the scope is. My assumption is this is a multiyear process. The discussions ive had with some ecb councilman birds are along the lines of they want to see the results of the fed review and learn from that before they really move substantially with their own review. A lot of this requires an enormous amount of work. Clearly they are looking at the fund them into issues as to what drives inflation. We willnot something see, but that is something to look out for in this press conference. Guy we are going to talk about the fed. You are gong to stick around, arend kapteyn, ubs mobile of economic and strategy research, joining us in london. On a programming note, we are delivering special coverage when that election. Ina edwards, jon ferro, and at 5 p. M. New york, tonight talk 5 00 p. M. New york, 10 a talk p. M. In london. Vonnie lets check Global Markets now. Heres kailey leinz. Kailey if you look at equity markets across the globe, we are really mixed. We are lower by the better part of 0. 2 , while the nasdaq is still urgently higher, entity 500 higher, and the s p 500 awaits a lot of Central Bank Decisions on the tariff deadline coming at the end of the week. Investors arent looking for any kind of optimism. One place you might be able to find it in the terminal, take a look at the socalled misery index. We can see that the inflation index is at its longest going back 50 years, so that may be a positive sign in terms of the Economic Health here in the u. S. , which would be aiding a bit of risk appetite. Lets take a look at nordstroms, up by the better part of 4 . Macys of the better part of 2 even though it got cut at golden sex today. At Goldman Sachs today. It is getting a lift to some of the Shopping Center retailers. Some other stocks on the move in a big way today, a biotech bonanza. You have synthorx surging after it was bought by sanofi after the close on friday. You also saw a huge premium in the arqule deal come about by mark for double its market value. Double its for market value. Biotech finally, xbiotech higher. Vonnie thank you. Remember the function gtv on the bloomberg. Check up on key analysis, save your favorites for future reference. This is bloomberg. Vonnie live from new york, im vonnie quinn. Guy from london, im guy johnson. This is therapy and close on Bloomberg Markets this is the european close on Bloomberg Markets. Lets check the first word news with ritika gupta. Ritika former fed chairman paul volcker has died. He broke the back of inflation in the 1980s. There, he worked with president obama to rein in the investment risk of commercial banks. That led to the volcker rule. Paul volcker was 92. The fbi is calling the shooting at a Florida Naval base an act of terrorism. A Saudi Air Force officer in the u. S. Shot and killed three naval personnel. He was then killed a sheriffs deputy. Saudi arabia is promising to cooperate in the investigation. Some republicans are calling for the u. S. To temporarily halt Training Programs involving foreign servicemembers. A volcano eruption on new zealands white island. Killed at least five people. Others are missing, and dozens more injured. About 50 were on the island. Many were believed to have been from a cruise ship. White island is about 30 miles off the coast of new zealands north island. Hows investigators make their closing arguments in the democrats case against president trump, debating how far they want to go in drafting articles of impeachment. Judiciary Committee ChairmanJerrold Nadler says the president is likely to be accused of abuse of power and obstruction of justice. Global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. Guy thank you very much indeed. Hsbcs interim ceo is shaking things up a little bit. The bank is were placing its Top Investment banker, its chief operating officer, and chief risk officer. This is a confident move for a man who is interim ceo. Does this slightly hint at the idea that he is pretty confident hes going to be able to drop the interim pretty soon . Reporter youre saying what a lot of people are speculating. It is a very forceful move for somebody who was brought in as the interim guy. February to imagine in that the interim ceo will be allowed to make wideranging further changes at the bank. Many people are speculating that hes putting his stamp on it. You cant rule out one external candidate that has been mentioned quite a bit, stephen byrd, formerly of citigroup. Most recenthe shakeup of that bank, and has specific experience. Of course, so does noel quinn. Vonnie so was that the most surprising move . What about the entrance of the former hp employee . Reporter reporter yes, this is the one that hadnt quite leaked out. Andy mcguire was retiring after five years as ceo. The hewlettpackard man, you cant help but wonder that bringing in the executive indicates of the highest levels of hsbc that they are concerned about some of their tech issues with the overhaul. As far as we have heard, hsbc indicated in its most recent earnings that it was going to write off a lot of Previous Technology spending. It is tempting to say that the two things are related. Also, with the digitization of all kinds of banks and banking, where hsbc is going to be concentrating their capital, it may be easier to build up through the apps and digital than to build a branch network. Guy are we going to get an idea of what nole quinns shakeup is going to look like . Are we beginning to get our arms around understanding it . Reporter i think we are. They have been telegraphing what is going to happen. Or china, less western europe, less u. S. In western europe, the next shoe to drop will be selling the french bank, formerly credit to marcy l formerly credit commerciale. The logical buyer would probably be a french domestic bank. Guy i remember reporting on that deal when it was done. Thank you, bloombergs keith campbell. Vonnie we are back with arend kapteyn, ubs global head of economic and strategy research. We have been speaking about paul volcker passing earlier this weekend. He passed away yesterday. We have been speaking about this this morning. It has been 10 years, and we havent had a recession in the United States. Have a look at this chart. It shows that really, it is the we have gone since the 1950s, and that is really far back as the data goes. The line is the Dow Jones Industrial average. It has barely factored into whether there is a was hessian or not. Is a recession or not. When are you forecasting the eventual next recession in the United States . There has to be one, right . Arend our forecast does not expand past two years, so we are not forecasting one. Every time there is a downturn of some sort, to the extent there is hawkish and us, the reverse and you get a big move in market yields, so at the margin, that does just enough to avoid a recession. That is have been three times now in past three years. This time is a bit more tricky because i think the nature of the slowdown is related to investment uncertainty, so if you do get a slowdown now, even if you price back end some of the cuts priced in the market, it is difficult to get a response in investment through that because people simply dont want to invest in an uncertain environment. That is quite different from what happens in these previous episodes. So we will see. Vesely, the lower you Start Playing to the ground, once you start to run out of labor and you are running sub 2 because there is no fiscal stimulus left, the danger level goes up. But in our forecast, we dont have a recession. What are you looking for in terms of, say, s p earnings upside . You must be looking in terms of fundamentals earnings wise, too. Arend we have a sort of bearish forecast on the first half of next year in the u. S. We have an s p index target for the end of next year below current levels, partly because we have this air pocket in our Economic Forecast we think is going to be a correction at some sort. That hasnt happened this year. It is entirely possible that the equity market keeps going up even if you had some kind of air pocket. So equity i think is very difficult. I think it is decoupled effectively from the fundament of. We think the u. S. Might hit 0. 5 growth before going back to trend second half of next year, and we will have to see how the equity market digests that. Guy youve got three fed rate cuts priced in for next year. How do you get there . What has to happen to get the fed there . Arend it is a mobile forecast because the market is probably going to forecast for five, and it is pricing one. Basically, it is repeating itself. You had a shock to the many factoring sector last year which collapsed q4 growth. You saw consumption slowdown. It was because it was such a concentrated stock in one sector that you get an outsized behavioral response. Yearwas manufacturing last , and where that stock is coming from his september tariffs. The december tariffs are hitting the vulnerable part of u. S. Etail when we have discussions with the owners of stores, they basically say we are going to shut these stores down anyway because of Online Retail penetration, but if they are not probable now, i am going to excel rate those closures. Not to in order for that happen, you have to roebuck september . You have to rollback september . Arend you have to rollback september. Nominally, they are equally important. Guy interesting. Certainly looking for to what happens. Arend kapteyn, ubs global head of economic and strategy research. This is bloomberg. Vonnie vonnie time for your latest Bloomberg Business flash. Goldman sachs has jumped into the wework cleanup. Bloomberg has learned goldman will arrange a line of credit for almost 1. 8 billion dollars, the first step in softbanks pledge to put together 5 billion in financing for work pop. For wework. Merck has agreed to buy arqule at a premium to focus on Cancer Treatments. Merck is paying about twice arqules market price. That is your Bloomberg Business flash. Guy we are counting you down to the european close. Weve got around three minutes to go. We are negative, but not that negative. Aredax and the cac 40 slightly negative today. Closes next. This is bloomberg. Beyond the routine checkups. Beyond the notsoroutine cases. Comcast business is helping doctors provide care in whole new ways. All working with a new generation of technologies powered by our gigspeed network. Because beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected. To do the extraordinary. Take your business beyond. Guy 30 seconds to go until the end of regular trading this monday in europe. Definitely a december session in europe. Most of the main markets are down but not by much. Very tight session in terms of ranges we have been occupying. Italy down more than most. Spain up a little bit. Nothing satisfying. It comes friday when the payroll story was something that drove the markets higher, at we have a fairly busy week coming up. All of those things priced in. Rangeoxx 600, a nice high. Still above the 400 mark. Not much difference from where we came through the close on friday. In terms of the individual markets around europe, the communal markets are softer than the london market but not blind in normas amount. The ftse 100 down. 1 but not by an enormous amount. The ftse 100 down. 1 . Volumes not crazy.