Matt no cheating. The Trump Administration removes its designation of china as a currency manipulator ahead of tomorrows expected signing of a phase one trade deal. Proceed with caution. Markshares howard tells bloomberg exclusively, investors should beware of the bull market. The market has been up for 11 years. We are in the longest bull market and expansion in history. Profits are not rising though stock markets are. It does not mean the market will go down tomorrow but it does mean that the odds are in my opinion in the investors favor. Matt fit and focused. Can the former maintain its dominance when it comes to fixed income currencies and commodities . We are just an hour were away from the start of cash equity trading. Let us take a look at future us. Daxave green arrows here on futures and ftse futures and cap futures. We are looking at gains of about. 2 per 0. 25 green arrows in the u. S. Futures picture although they are not quite a strong with the exception in general, they are not as strong. I can only see some small gain. What are you seeing . more of that howard marks interview later. What we are getting through from u. K. Corporate the companies reporting. Period aftering the last few months of 2019. A slight upgrade. More on the Gaming Sector as well. Let us talk about what is going on on the gmm. Things are looking mixed. Asian stocks moving moderately higher. Yesterday in the u. S. , we saw the s p and the nasdaq hit alltime highs. We have can it last as those words of howard marks bringing in our ears. We see the u. S. Removing china from its list of currency manipulators. That is one of the stories we are covering. We did see some gains come through on the chinese want. We did seeme data some gains come through on the chinese yuan. Lot to talk about this morning as we move ahead into more conversations about trade and u. S. Bank earnings. Definitely looking forward to getting those Bank Earnings out. In terms of trade, the u. S. Has dropped china from its list of currency manipulators. Here is what our top guest had to say about it. Sentiment isn obviously visible. This is another step in the process of milking down and pulling back from the tremendous confrontation that went on in 2019. They can move on to more substantive issues. It is a symbol. Tomorrow, when they sign the phase one deal, there will be a commitment on the chinese side for the relative stability of the exchange rate. Matt let us dive into the market now with our Market Strategist out of singapore. What does this mean for the chinese currency . How strong could it get . Mark in the shortterm, it is probably more like an point than any real future intent about where it is going. Appreciatingbeen for the last several days. People were expecting the chinese yuan to be taken off of this list anyway and your seen a gradual move upwards in the yuan really since the end of last year. An impressive performance. 690ave put it over the level. It is quite a big move already. Huge volumes in the yuan business in the last few days. It shows you that a lot of people were getting out of the trade anyway. Left in the near term. The most traded currency globally on monday which is very unusual. Shortterm, it has probably priced in a a lot of good news. It all depends on where the u. S. And china go in terms of will they move forward on a phase to two deal . A phase yuan appreciating will probably be slower. It is a twoway street. It also depends on what the u. S. Does from its point of view. For now though, everything seems to be rosy. The u. S. And china are making a deal. And from here, the yuan can continue to appreciate but at a slower pace. Anna the u. S. Treasury talking about enforceable commitments. In the see the wording phase one deal. How does the data from today on imports and exports set us up before the gdp data that we will get later this week . Optimists may be focused on the intraasian trade story. Good pieces the what the import numbers are higher than expected. That means china is doing more business within asia which is good news for all of the countries around asia. They will all be very pleased to see that. That is positive for broader growth across asia. People wont be too surprised about the gdp but what they would like to see is a pickup in retail sales and factory orders. Any would also like to see increase in bank lending. There is a lot of secondary data which will be coming out in the next few weeks which will be extremely important. We do know that the forward leading indicators are starting to turn positive for china. That are flashing signals are better than they were a few months earlier. Optimistic that china will have a decent first quarter. Matt you have the question of the day on your mliv blog. Which assets will benefit the most from yuan strength . What are you hearing . Mark if we look back to the last time of yuan strength, that was good for equity markets across the world. That your em index rise more than 30 . Anna mark, thank you for joining us. Mark cranfield from singapore. You can join the debate today and get involved in the question of the day if you wish. Reach out to us and the market team. European, all of the market open. Howard marks says now is not a good time to be interesting. Guests if they agree. What is the Investment Community making of the climate right now . We speak to the ceo of ceo of glaxoarmo the klein. A 56 rise in fourthquarter orders. This is bloomberg. Matt welcome back to bloomberg markets, this is the european open. We are 48 minutes away from the start of equity trading across europe and the u. K. Let us get the first word news. Iraqi leaders want american troops to stay in the country albeit privately. That is according to mike pompeo. Ofis downplaying the removal the u. S. Army from the country. In india come inflation surging to a fiveyear high in december. Jumpump ride late the pushed by food crisis. Manchester united risks losing its position as englands top soccer club. As there is a string of subpar performances. The team is forecasting annual revenue will slide as much as 11 from last year. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. This is bloomberg. Anna laura wright in london. Let us debt to our stocks to watch. We are joined by our equities team. And dani burger who is focused on other stocks. Victory on friday in terms of the m a story. Today, they announced their fourthquarter order volume that jumped and that was before the takeover completion which is to be concluded by the end of the month. Takeaway. Com stock has been dancing under the reckitt set in december. Under the record set in december. Today, it could go back to the record. Matt that is the story on take away. Dani, you have the story on bhutto boo hoo. Com. Dani they have seen record trading in the last four months of 2019. And expect a gain of 42 , upgrade from 38 . They have also upgraded their margin outlook. Across the board positive numbers from the company. They say their key regions have all done well. One of the reasons they have done well is because they know their customers and they are good at getting celebrity endorsements on social media. Perhaps instagram is due success for this stock. Sectorhe european chip in general. Semiconductor revenue coming in above estimates. Speakn smithkline we to the ceo of the business at the j. P. Morgan conference in san francisco. She talks about the importance of innovation. It is the first of our three priorities. We are thrilled with the progress we are bringing whether it is the positive data for patients or the six new approvals we expect in 2020. Technology for us is an enabler, and accelerator of innovation. It is so exciting to see the advances coming in biology, particularly immunology and also technology. That is why we have been building out some very exciting new partnerships whether that be , the pioneers in crisper or cell therapy. We see a lot of opportunity fundamentally to improve through genetically validated targets, the possibility of success. Backu had a deal a wild for more than 5 billion. Analysts at the time worried. Recent success has proven the critics wrong. Fundamentally, we are betting on the acquisition of a company. We believe the core medicine thed go beyond women with certain gene leading to ovarian cancer. Out over theed summer that this medicine would be relevant and could be very important for 100 of women. Preventing reoccurrence by 40 . Andre excited about that some other medicines in the portfolio. Emma walmsley. Am a coming up, we bring you an exclusive interview with another ceo. Will be withnah us. Are traveling to work, tune into Bloomberg Radio live on your device. This is bloomberg. Anna welcome back to the european open. 20 minutes past 7 00 your in london. 40 minutes to go. Positivepected to be at the opening of trade. Affectingas been acquisition targets. Tot as it hans ford deals build scale and entered new markets. Meanwhile, the conference in paris has a theme of accelerating growth. Stephane boujnah is with us. With that the of your conference , accelerating growth in europe, how much of that growth will be from m a and how much of it will be from your own sources . Is full ofurope opportunities. What we are talking about is growth within the continental of 5 Million People with a singular currency and a high concentration of companies. With the highest pool of savings on the planet. We are going to discuss how europe as a group can build a unified capital market. As faryour next, growingext, we are organically but we will also for theis as a model future of building a unified group in a diverse culture. That is the purpose of the conference and the ambition of euronext. Matt youre going to have to do some m a to achieve that. What about the bme . How serious are you about buying the Spanish Exchange . Stephane we are monitoring and analyzing the situation. And this work we are doing now may lead to an offer or may not. Areasnds on the parameters and sets of circumstances. For the moment, we are in the analyzing mode. There is another offer on the table. The question is whether or not we will do a competing offer and we are in the process of analyzing this option. Matt what do you need to see their . What do you need to see there . What are you waiting for . Stephane we are examining all of the relevant circumstances to reach a conclusion. We believe it is important to weigh all of the options. There are many other parameters we need to take into account before deciding whether or not to make an offer. Anna are you confident you have enough buying power to go up against this was on this particular deal if you decided to . Stephane yes. Anna yes, ok good. What about the Italian Exchange . If the London Stock Exchange has to sell the Italian Exchange, would you be interested in that too . Stephane my understanding is that the London Exchange has no intention of getting rid of that group of companies. They may want to change their minds. There would clearly be a willing partner for this great group of assets. T would be a natural fit matt i look at your threeyear 2 3 annuale growth there. Why the low single digit . What do you need to do to boost that . Four why are you happy with or why are you happy with only 2 or 3 growth . Clearly, it is an ambition that may sound to certain commentators shy but which is reasonable. We in the business of have higher ambitions. This is a reasonable target. And on top of that, the rules of the group would come from consolidation either from geographical expansion as we have just discussed the single country exchanges or platforms becoming part of the euronext family. But also from the diversification by the acquisition of platforms that are geo that are geographically focused. Ininvested a few weeks ago exchange. Icity there is a clear diversification. Anna let me ask about Something Else working hours at exchanges in europe. Are considering formal consultations regarding the length of the day. Will you launch a similar investigation . Are you interested in doing that . Stephane we are part of that consideration that factors in all sorts of drivers, family thetime, efficiencies, preference of investors. We are part of that. Which is welcome. But we have to weigh all of the dimensions especially in a new technological environment. Matt thank you for your time, stephane boujnah, the ceo of euronext. Great talking to this morning. Have a great time at the conference. Washington has dropped its designation of china as a currency manipulator ahead of tomorrows trade deal. This is bloomberg. Good morning oh no, here comes the neighbor probably to brag about how amazing his Xfinity Customer Service is. Im mike, im so busy. Good thing xfinity has twohour appointment windows. They have night and weekend appointments too. Hes here. Bill . Karolyn . Nope no, just a couple of rocks. Download the my account app to manage your appointments making todays Xfinity Customer Service simple, easy, awesome. Ill pass. Welcome back to bloomberg markets. This is the european open, 30 minutes from the start of cash equity trading. You are looking at pictures of the iranian president. He is talking about the plane crash in which 176 people died. Lane outans shot that of the sky with ground to air that plane out of the sky with ground to air missiles. He says it is the fault of several people. Iranian authorities will find out whether any official in the country broke laws. But he says the root cause like with the usa. Lets talk about what is coming up ahead. What you should be looking out for it. The e. U. s new trade chief is going to washington. He will meet with robert lighthizer. Three weeks before the state contests begin for the democratic candidate, the party holds its seventh debate. And u. S. Bank earning season kicks off with signs of and estimates. Jpmorgan and others reporting numbers today. And we get cpi inflation data at 1 30 p. M. London time. Be nothe top story has to more cheaters in china. The u. S. No longer considers china a currency manipulator. Washington has dropped the label, saying the country has made commitments not to devalue its currency. Joining us is Tom Mackenzie. This comes ahead of tomorrows signing of a trade deal. Is this the main set up time this move . Set up behind this move . Tom it is a nod towards those trade discussions. Course we will remember the label was put on the chinese , despite thet course the fact that china didnt fit the criteria for currency manipulator and that label. But trump went ahead and pressured mnuchin to do it. Now they have removed it again. Beenrms of what we have getting and hearing from the experts on the ground, this is more symbolic, but what it does boostd the sentiment the sentiment. We have seen it reflected in the currency which has strengthened to around 6. 88, the highest in six months. There was a question of trade talks moving on, if they progress smoothly. Economists are revising estimates. 6. 8 and seven by the end of the year. Nejra also the impact on the trade war it has been having on chinese imports and exports grew we have the data for 2019. If there is one story, there is another if you look at the relationship between the u. S. And china specifically. Tom the top line numbers, justts grew 6. 5 , imports over 15 . Over 2019, china managed to increase exports globally half of 1 . Exports from china to the u. S. Fell 11 . This as a result of those tariffs. When you talk to anz bank, they say in second half of the year we should remain cautious around the trade picture. Around average of 19 tariffs are main on chinese exports. But they have done well. Markett grow that share beyond the u. S. And europe. Able toey have been find a lot of other customers for their goods. You have been talking to the bnp Paribas China ceo about their expansion plans and a number of banks have talked about expanding. What did the ceo tell you . You are right. We heard from Goldman Sachs saying they wanted to double. Jpmorgan expanding their office space. Ubs looking to double. Ofspoke to the ceo in terms bnp barry bonds china. Bnp Paribas China. They will go through the regulatory process and they want to add headcount. Listen to what he said about the challenges of growing. If we grow the business, we will have to hire more people. As one of the foreign banks and one of the many foreign institutions coming into china, the Biggest Issue is the local towns. Tom a battle for talent in china as these foreign banks try to expand market share. He also said a stronger yuan would boost inflows from Foreign Investors into chinese equities and bonds. Much. Nk you very Tom Mackenzie with an update on the macro picture out of china. We will get chinese data or gdp later on which will be of interest. Joining us to discuss china further is a chief economist. Thank you for joining us. About the we know now phase one trade deal that looks set to be signed in washington and everything to do with currency manipulation, does it look as if we see a stronger chinese currency from here or has that move than done . Probably it has already been done, but we have to wait for further we are expecting the growth at the end of this week and probably it will print around 6 . Isprobably more appreciation possible if we have a stabilization. This is the main trigger. We have seen negative headwinds coming from the trade. Even if we have seen a stabilization in domestic demand and the conception, the rates and headwinds remain on the phase two of the agreement with the u. S. It is possible to have a rebound of the currency but on the longer term, situation we have to be cautious because it is not sure that growth should stabilize on 6 but it is possible to have slightly weaker to 5 in the coming years. I got to ask you about the currencyaken off the manipulator list. The swiss were added to the treasury watchlist of manipulators. S p does it mean for the and fiscal policy, that the u. S. Wants changed . It is a challenge. I would say as a swiss banker and economist, it is a pity for the swiss currency to be on the list because we are not really manipulating the currency. Has been National Bank in relationship with the euros. Notaries currency but it is manipulation. Tooproblem is to avoid toong a but first need move into negative and then also to interfere in the currency forex. The result has been globally positive of these two reactions from the central bank. I would not say this is a manipulation. The risks are related to the eurozone and the attitude of the ecb and strength of the europe rather than deliberately manipulation of the currency. Att to a lehman who is not economists, monetary theorist, central banker, it seems fairly manipulative to push your Interest Rates far below zero and then say if the currency moves in a way you dont like, you are prepared to intervene. How is that not currency manipulation . I would say this is the problem of the swiss market. The swiss economy is small. It depends on the export sector. The capital flows are not only depending on domestic demand but external demand. We have seen in the event of geopolitical risks, we are recently with these strikes. We are in the same situation the japanese yen [indiscernible] appreciation of the currency. The best way is to intervene in the markets, in order to avoid of the currency. So i would say it is not a manipulation. It is to keep currency in a way which prevents the swiss economy from a sharp appreciation because of it too strong appreciation of a currency. It is a small economy related to the big, large eurozone and of course with big risks coming from the world economy. Do you see the snb sticking with its record low Interest Rates for the rest of the year, and any person being affected by negative Interest Rates in terms of their dealings with their local banks . We have been obliged to change the monetary situation that is to say, the way we manage the current accounts. The negative shortterm have been impacted on a certain level of customers. It has been a big thing. Concerns, have been concerns by the negative restraints and environment. On then important impact currency and the way to manage the accounts of the customers but also for institutional funds. For thank you so much joining us. It has been a pleasure. We learned a lot from you. China, to us about negative rates. Boeing could be about to lose its title of the worlds biggest plane maker to its rival airbus. It will report deliveries very we will look at the future of the company amid the crisis. Bloomberg radio is live on your ab digitalice or d radio. This is bloomberg. Bloomberg. Welcome back to bloomberg markets. This is the european open, 15 minutes away from trading across the continent. Not a good time to be investing. That is the opinion of howard marks, cochairman of Oaktree Capital. He says sooner or later stocks will go over the cliff. The market has been up for 11 years. We are in the longest bull market some of the longest expansion in history. Stock prices are rising. Doesnt mean the market will go down tomorrow, but it means the odds are not in my opinion in the investors favor. 5. 3 billion. Likennects popular apps venmo to Customer Data in the banking system. It had a meteoric rise. The sale price is double its valuation in a 2018 funding ride. It should add fuel to visa which saw its stock triple. Lion air wanted to put pilot through simulator trading training before flying the 737 max, but boeing convinced them it was unnecessary. That is before 189 people died when a lion air jet plunged into the sea, partly blamed on inadequate training. Thank you very much. Airbus could displace boeing as the biggest playmaker. The Company Reports production figures amid the crisis of the boeing 737 max, the bestselling jet. Boeings new boss took charge yesterday, vowing to rebuild trust very lets assess the fate of boeing. To rebuild trust. Lets assess the fate of boeing. The man advises many in airline sector. You have been visiting boeing. You have known this business for a long time. What is your assessment of the changing Corporate Culture needed under the new ceo . It seems to be vast. Ceo of boeing what impressed me never having met him before was he was focused on the culture. Boeing has been assumed seen anda fine engineering quality culture. I put questions whether it had changed, too much bottom line and cost driven. I was happy with his answers. Change. Rying to drive in the light of acknowledging mistakes and showing contrition for the accidents. It is one thing for a ceo to say be inanother thing for to reality. I was wondering if he was able to able to stand on reorganization because we see the news flows in recent days that suggest toxicity in parts of the business has to stop. Now we have a new ceo. Matt cant member if it was monkeys working for clowns are clowns working for monkeys. Clearly that kind of frustration lies in somewhere in every giant company, but do you think boeing was pushing too much to cut costs, too much to get products out more quickly, to hold regulators off . That was my feeling. I got reassurances from dennis that was not the case. I said how do you manage your business when you have airlines, like ryanair, very aggressively seeking ever improved cost deals , and at the same time you are having to invest in new Aircraft Programs . Tosaid i am not going to lie you, we are always trying to cut costs and improve efficiency but never have we done it to the extent of safety or doing the right thing. I have the feeling that there max lapses on the 77 program for which the company has got to learn and change its approach. If we look forward to new programs like a triple 7, 8 and nine, havent done so. It is an opportunity to learn. That is more delayed. That is a better thing to get the aircraft out there safe and reliably. [indiscernible] they really cannot believe what the company has done. They see a need from an Airline Point of view to have sweeping changes one or two beyond some board positions. Boeings it possible for to make a solid project, to put the worries about cost partially to one side and to work closely with regulators as we need them to, if they are going up headtohead with airbus . Customers will be amending savings. Demanding savings. We seehe end of the day the situation going is in, the hundreds of maxes grounded. The parts around seattle and other locations in storage. Pay is too high a price to for not taking a shortterm pain in the management of cost and looking at every facet produced. That includes involvement of the pilots and engineers, some of whom said their voices have been too weak. There was a change to improve the structure. Safety has been a line of the board. When or if we will see when or if the max flies again. What kind of support do you think would be appropriate for this business to get the talk in the media about aircraft and the bills being frozen to give them relief . There is a tax on tickets in the u. K. It falls on domestic flights where you pay into both directions. If you go london to edinburgh and back, you play it you pay it. Similar tactics are not applied the bus or train tickets. It is a big burden. The Companies Make it clear. If they had the cash, they would have sufficient liquidity to go into. Seenhe government cant be as a biased or favorite just way. This is the biggest provider. Thank you very much. Analyst at jail as consulting. As the u. S. Has the u. S. Engine run out of steam . That is coming up. This is bloomberg. Welcome back to bloomberg markets. This is the european open, six minutes from the start of cash trading. The dominance of u. S. Stocks may fizzle out. That is according to Goldman Sachs. For more, lets get over to dani burger. No. Anna in fact lets not. Lets not because we are having trouble establishing our connection. Lets get to the other stocks in focus. Hill int for william the gambling stocks. Gambling on credit cards will be ade illegal in the u. K. And chemicals in germany, keep an eye on yvonne it. Confirming their outlook for the full year, looking backward. There are interesting calls which suggest substantial movement in the share price. What have you got . No. i have got were pretty excited renault. The french finance minister expects a new renault ceo to be named in the coming days. My thoughts immediately went to carlos ghosn. He is free in lebanon, but it is unlikely that they name him their ceo. Right now he saw has been putting out statements that in no way is it considering dissolving its alliance. I getting an update, which is think pretty interesting area definitely want to watch renault and all of the car shares in the coming days. Two of the worstperforming automakers in 2019 in terms of stock performance. The market open is 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. Minutes to go before the start of trading. Here are your headlines. The Trump Administration removes its description of china as a currency manipulator. Proceed with caution, tech shares and trade optimism push stocks to fresh records. But investors should beware of the bull market. Jp morgan and citigroup, can the former remains its dominance . We are looking at futures across European Equity indexes that are gaining. But not nearly the strength we saw an hour ago. As we get closer and closer to the opening bell, we get closer to closer and little change and u. S. Futures turn red. If there was as mismatch. That seems to be closing a little bit in the favor of the u. S. The ftse 100 is fairly flat. The spanish market opening fairly flat. U. S. W all new highs in the china no longer designated a currency manipulator. All of that lifting sentiment in the u. S. Not enough to take us to a high in europe equities. Lets have a look at the sector perspective. We have a flat picture emerging around europe. Financials to the upside. Health care fairly mixed. Utilities to the upside. It does not seem like an obvious narrative going on here. To be fairlyoks mixed this morning. We wait for further details of what it is that the phase one trade deal is going to include tomorrow. We see that signing taking place in washington. We focus in on the european trade narrative as well. Take a look at the stock 600 and terms of individual movers. Off to ae market get negative start even though everything was up. 390 stockse have that are gaining and 182 down. I have arranged it in terms of points so you can see what is weighing on the index and why it is doing what it is. Asml is adding the most points. Hennessey. On, we haveownside anheuserbusch and nestle. We have a relatively even session here in terms of the stoxx 600. Up about 1 10 of 1 . Anna european markets opening fairly mixed. The u. S. No longer considers china to be a currency manipulator. Very good to have you with us. Will this phase one trade deal give another eight lake up leg up . The next step is whether the two countries adhered to the trade agreement. Do you think all of the phase one has already been priced in . Power, equity indexes, the new highs . Laura i think it is largely priced in. Big part of that was the expectation that the phase one agreement would get signed. The twotionship between countries seems to be Getting Better the removal of the currency manipulator tag is a good sign. Industrial need the data to continue to improve. Anna for people to make a portfolio that benefits from what china has to offer, what their and their expectations be . Laura getting the gdp data tomorrow will be relatively weak. The markets are always forwardlooking. Industrial pmis seem to be dropping in companies countries like germany and the u. K. We have chinese gdp later this week. Up on exposure to china. Laura it is quite cyclically exposed. A lot of the industrial sector is dependent on chinese growth. Here is thatn from we will need to see the data coming through to support that. We will get later on the u. S. Bank earnings. Those shares have done tremendously well over the last year. It looks like Earnings Growth could fade a little bit. What do you think of financials and earnings more broadly . Laura i think it is quite difficult for financials to earn decent margins in this kind of environment. A lot of them are still trading below. They are not pricing in a steep return environment from here. Alot are pricing in deterioration of returns from here. It is a tough environment out there for financials, specifically banks. Anna thank you very much. We will talk about the pharmaceutical sector. New drugup to six approvals in 2020. We will get analysis of the sector, next. This is bloomberg. Matt welcome back. We have some breaking news on blackrock, the worlds biggest money manager. Avoid companies with high sustainability risk according to the new york times. Blackrock has come under fire recently on concerns about its investments in companies that are tied to Climate Change. Blackrock saying it will avoid companies with high sustainability risk. We will continue to bring you updates on this important developing story. Lets get the Bloomberg Business flash. After a strong holiday season. A record of outperforming the u. K. Retail industry. 40 . Expected to be over it expects a higher profit margin. We have learned the company is talking to China International capital and Goldman Sachs on the share sale. The operation of pizza hut and kfc could happen sometime this year. Clives. Uying it connects popular apps like venmo to Customer Data in the banking system. Sale cost is double its evaluation. Also fuel visa. That is your Bloomberg Business flash. Anna lets get to the Health Care Sector. The potential of six new drug approvals in 2020. We spoke to the ceo. She told us of the importance of innovation to the company. It is the first of our priorities. Progressppy with the in the momentum we are bringing. Whether it is positive for patients or six new approvals in 2020. Achnology for us is accelerator of innovation. See theciting to advances that are coming in biology and technology. D is based here. We are building new partnerships with 23 and me, crisper, the pioneers in cell therapy. This is a great ecosystem. We see a lot of opportunity. To improve through genetically validated targets the probabilities of our medicines. That is the point of our company. Had a deal for 5 billion. Recents worried that success has proven critics wrong. Where do you see your future success . We were betting on the acquisition. It could go beyond the women with that jgene. Our hypothesis was 50 . The data played out over the summer. This would be relevant and important. Women. of s is a horrible to disease, ovarian cancer. We are excited about that and other medicines in the portfolio. Expect to see some of the experimental drugs potentially become big blockbusters . Having sevenom medicines in the clinic last year to doubling that. In part with that acquisition. Readouts. Positive and another metaphor endometrial cancer. We are hoping to get approvals for that. For people who are running out of options. Failing seven different treatments. The important thing is we have be cma in up to 10 studies. We are optimistic and in business. That was the ceo of gsk. Still with us is a Portfolio Manager at janus. What do you think about the Health Care Sector right now . The sector is in a pretty good place following a good 2019. Particularaluation to the other defensive sectors. Think you will see mid to high single digit earnings for the sector as a whole this year. I think the sector is in a pretty good place. There is always the overhang of possible changes to u. S. Pricing. That has been a debate within the sector for a long time. That is unlikely to change. Storysk, i buy into the that they are reinvesting in r d. Historically they have focused on other products. There is more to go there. Gsk is still a small discount to the rest of the pharmaceutical sector. It is pretty high quality and has a good vaccine business in there as well. Anna you mentioned the u. S. Pricing. She was supporting more transparency around drug prices. It is something that drug Company Bosses have gotten more sensitive to in recent years. You see more muted list price increases. What we do not see are the net prices in the u. S. Those are private discussions. You do not see what companies are actually paying. When i say u. S. Drug prices are higher, im comparing it to what they are actually paying. Matt is there a way for uniquees to build a advantage in order to get around the pricing caps that will surely come . Personalized medicine or gene editing. Are there companies that have a secret weapon there . Laura it is interesting that you mentioned gene editing. Dynamicshink pricing come into discussions as much. Novartis has a new gene therapy to treat Muscular Atrophy in children. But it ised highly treating an unmet area and very young children. Thank you very much. Just a quick word that Boris Johnson has been speaking, covering a host of issues. Is likely thinks it that the u. K. Will secure the eu trade deal by end of the year. Think that is possible. We will keep our focus on brexit as we go through 2020. Up next, we will bring you the stocks on the move this morning. Do you know betting using credit cards. This is bloomberg. Anna welcome back. 20 minutes into a trading day that looks negative for europeans. Lets get an update on the individual movers. Boohoo now trading at a record high. They said the last four months was a record. This as other u. K. Retailers struggle during the holiday season. Investors treating this as welcome news. 42 . Expect growth around 32 . Is an update from a lot of other u. K. Stocks here. They are selling one of their arms, their plumbing and heating business. They are selling it to newberry investments. These proceeds will be used to reduce net that. Debt. To reduce the complexity of the company. A lot of the Gambling Companies are tumbling. William hill is a down about 3 . The u. K. Will ban the use of credit cards for gambling. About a hundred thousand customers used credit cards in the u. K. To gamble. This is a sizable chunk of their customers. Thanks very much. Speaking of big movers, Oaktree Capital cofounder and cochairman says now is not a good time to be investing. An exclusive interview with bloomberg, he pointed to the long bull market run is one of the factors. The market has been up for 11 years. We are in the longest bull market and expansion in history. Profits are not rising, stock prices are. It does not mean that the market will go down tomorrow. But the odds are not in the investors favor. Our guest is still with us. What do you think . It has been a long bull run so far but does that mean it is too late for investors to get in . Laura i think it really death what market you are looking at. If you are an investor who needs a good level of income, i think equities are still the only asset class that is offering that kind of yield. It has been growing in recent years. I hear his point about the length of the bull market. But we are looking at an environment of modest global growth. You are looking at potentially excelling. You have to look at where you are starting from. From a u. K. Perspective, it looks reasonable. Anna what do prophets look like . When people look at the u. S. , they say look at the s p profits. Corporates are painting a very different picture about their profitability than the picture being painted by the s p levels of profitability. Is thatobvious or something that tells us that profits are under pressure . Looked back at earnings in recent years, it has been very muted. Companies on average do not seem to be growing. They are growing their earnings at a decent rate. There is good Earnings Growth there. The headlines, it does not look like there are a bunch of earnings. In the u. K. Market we have high exposure. Matt we are following this blackrock story. Copy ofyork times has a a letter that larry fink wrote to other ceos saying that block plans to announce Investment Decisions with sustainability. They will shun fossil fuel oriented stocks. They will start other passive funds that will not include fossil fuel companies. Is this a clearly it is a growing trend. Blackrock is a massive company. They have more than 4 million under management. Does this change the game . Laura i am not sure. These concerns have stepped up over the last two years. Whether you are running an environmentally sustainable funds are not. You are dealing with that at the moment. Everyone is trying to get up to speed on it on the same time. We have not gone down the exclusion route. We own shell and bp. Going down isefer engaging with the companies. They are likely to be able to invest in renewable in energy. Anna thank you very much for your thoughts this morning. She will be continuing our conversation on Bloomberg Radio. That is where we will be heading at the top of the hour. First china, now europe. Washington sets its sights on the next trade fight. What should we expect from these meetings . This is bloomberg. Anna welcome back. 30 minutes into a trading day that is still pretty negative. Alongside matt miller in berlin. You called that at the open. We saw them getting closer and closer to the watermark and now they have gone under. May be concerns related to howard marks little warning that we just shared. He says is is too late to invest in this bull market after it has gone on for too long. This is a breakdown of the indices groups. Today they are all down. Beverage, food and Health Care Stocks leading the losers. Everything is off including real arete and utilities, which trying to keep their heads above water. Today looks like a risk off day. It could be that way in the u. S. Lets get the first word news. Iraqi leaders want american troops to stay in the country, albeit privately. Is downplaying demands to remove the army from the country. The Iraqi Parliament voted to expel the u. S. Forces. In india, inflation surging to an alltime high in december. It was driven by food prices. This limits the reserve banks ability to cut prices. Fple says it is helping the investigate an attack on a naval base. It reiterated its argument. Apple says there is no such thing as a backdoor just for the good guys. Earninger united risks losing its position as englands top earning soccer club. Performances. Bpar the earnings potential may put it behind Manchester City and liverpool. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. This is bloomberg. Anna thank you very much. Banks cook caliph kickoff Fourth Quarter earnings season. Here on the details for what to look out for his dani burger. Is all about the forecast. To see if crucial 2020 will be a better year for the banking sector. The Fourth Quarter does tend to have a lot of noise and it with some oneoff charges that it these banks. The macro forecast will be in laser focus. Companies, trading will be one of the things we look for. The Fourth Quarter was so volatile. Did keep traders on the sidelines . When it comes to jp morgan, fixed income and fixed trading is not good for them. In the Fourth Quarter, they easily beat their competitors. Important for citi. They have been spending a lot on technology. Target for 12 in 2019. That is the number we have to look out to. Wells fargo is the other one we will hear from. Technology spending should be pretty massive for them. Matt Asset Management arms are also equally important for these banks. We have had some breaking news on blackrock. The largest money manager in the world saying it will avoid companies with high sustainability risks. What does that mean for the industry . Blackrock manages 7 trillion. They say they will only divest from the highrisk, nonsustainable companies and their active portfolio. They have a lot of passive funds under management. If you are tracking an index, you are not meeting your mandate if you are divesting from companies that insist exist. That should make a difference. For their passive funds, they say they will be more active in pushing those companies they hold to be more sustainable. If they are taking a more active role, this should trickle down to other money managers. Typically they take more of a passive role in deciding how those factors should go into the companies. They have a standardized checklist. They mostly focus on the governance aspect. It is unclear whether this will be a more active role that black blackrock well see. They hold enough of these companies that if they wanted to, they could have a sway and how they run the. Anna very interesting to see passive. Active will go the u. S. Has dropped its label for china as a currency manipulator. Forcible commitment not to devalue the yuan. They get ready to trade sign a high phase one trade deal. Phil hogan will be in washington looking to soothe tensions with the Trump Administration. A potential for further transatlantic fallout on trade. What is the eu hoping to get out of this set of meetings this week . Good morning. It is no secret that this has been a very difficult year between the eu and the united states. We know President Trump does not like the European Union as a trading partner. He will tell you it is not a fair relationship. The europeans disagree. Tol hogan is hoping deescalate the situation. The case between boeing and airbus. That retaliation over the french digital tax. It is becoming difficult to separate the politics from the trade. We know the u. S. And eu are in another fight over the nuclear and iran. Europeans are insisting they want to keep the deal alive. They believe the best Case Scenario is that everyone takes a breather. They really do not have an incentive. Trump might not be in office by the end of the year. That is something the administration does not like. The Commission President is going to unveil heard green deal. Where will that money come from . That is the obvious question. We know the green deal is everything for this european commission. Her credibility hinges on it. This transition to Greener Energy will not be cheap. We have had Bloomberg News reporting that she will pledge the European Union will spend 25 of its sevenyear budget financing climate activity. She can leverage close to 300 billion euros. The key take away here is that this is a proposal from the european commission. It will not be easy to agree on. Anna interesting staff. Thank you very much. Investors take note. The odds are against you. Our exclusive interview coming up next. This is bloomberg. Matt welcome back. Almost 45 minutes into the trading day and looking at red arrows acrosstheboard. Losses. Lets get the Bloomberg Business flash. Laura the Worlds Largest asset manager is accelerating its push for a greener future. Blackrock will put Climate Change at the center of its Investment Strategy and avoid investing in companies with high risks. Nearly 1 trillion under management, blackrock could not be bigger. Forlooks at the potential six drug approvals in 2020. Of drug pricing. We absolutely support any kind of regulation that continues to support innovation. But also more transparency. No one should have to be rationing their medicines. We wholeheartedly support more transparency. Boohoo is raising its guidance. Supposed to be over 40 . Fors maintaining its record retailorming a u. K. Industry that is struggling. Anna thank you very much. Capital says too much money has rushed into the market and it is bad news. An exclusives in interview, the ceo says oaktree is better off than a few of its competitors. The market has been up for 11 years. The longest bull market, the longest expansion in history. Profits are not rising, stockmarket stock prices are. This is a liquidity rally. It comes from people having a lot of money to spend. It does not mean that the market will go down tomorrow. It does mean that the odds are not in the investors favor. Is now the time to be a contrarian . Is growing at a reasonable clip. Forecasters say the odds of a recession in 20 have declined. Stocks brushed off the threat of irani and hostilities and surged to a new record. Urgingeld spreads keep closer and closer to a prose crisis low. This is a time to have less risk than you did three to five years ago. We were here now we are here. If we are here, we should have less here. I do not know whether we are going to go over the cliff tomorrow or continue straight up to the sky. Are less in the investors favor then they were three to five years ago. I want to get to the substance of your new memo. You call it, you bet. Stock market is no better than a casino. Are they right . Investing involves hidden information, luck, and skill. Skillestion is, how much does that investor have . If you dont have much skill, then you are down to lock. Luck. If you have skill, you can have an edge. It is the difference between roulette and poker. Or blackjack. There is a science to playing blackjack. There have been books written about it. You can actually get good at it. You can get good at it. You can turn it into a skill game. Most people who have not read the book and do not know the theory and dont study it, to them it is luck. If you do not have the skill that you should, you can control the outcomes. That most people lack the skill required to be a superior investor. Watch of those people do . Any other activity, dentistry, law, veterinary, we pay people to do the things we cannot do. So that is what they should do. They should get outside help. His take on the current state of the markets and investing. Up next, some of the stock movers this morning. Including a Chemicals Company that is plunging after reporting what it is called subdued trading. You can see the drop here of 15 . We will tell you why. This is bloomberg. Anna welcome back. 51 minutes into a trading day that looks pretty negative. Lets get to some individual stock movers. Some stocks are defying the trends. Dani burger has a breakdown. Dani i need at least one upbeat story for us today. Gaining the most is old mutual. This is after a court ruling for the insurance provider saying they do not need to reinstate their prior ceo. This came after they let him go after alleged conflict of interest. The former chief executive says he is appealing the ruling. We are seeing old mutual gain almost 5 . Elementals is down. This is after the Chemical Company is saying that trading has been week. They are looking at a Challenging Market environment. Their income is going to come in at 124 million which is lower than expected. Og Semi Conductor also falling today. Analysts say there has been so much hype over the chip sector. You have a lot of investors moving into these companies. Matt looking at some of your individual movers. European stocks are broadly moving a little bit lower. Not such huge moves. After wall street touched on new highs overnight. This is also as the u. S. Says consider chinaot a currency manipulator. Lets take a look at what is moving markets. We were talking to an economist before who says it is not fair to call this a currency manipulator. When theyto call it go into the deepest negative rates in all of europe and say if it moves in a way they do not want to, they will get in the market . I guess you could say they are a currency manipulator but they are not very good at it. Look at the fundamentals in switzerland, that will attract capital. You have a massive trade surplus with the u. S. Found nd has very sound fiscal policy. Havenct that it is a means the s p has a really tough fight on its hands. They are manipulating their currency by stepping into the market and having ultra low Interest Rates. But it is not being that successful. As a result, it is odd to lump currenciesh other that are too weak compared to the fundamentals. We have spoken a lot about fiscal stimulus in europe. This is something you drew our attention to where Christine Lagarde is looking at the german Budget Surplus with sites on stimulus. To kicklicy areas need in to help the ecb. His berlin listening . They have been banging this drum forever. Mario draghi has been saying it for years and years. As were a lot of the Ecb Governing Council members. She has a lot of ammunition in her argument. Germany announced a record fiscal surplus. The pressure that the ecb has been applying on the european German Government will continue. They have hard numbers that underscore what everybody knew already. I am not sure we will get the level of fiscal stimulus from germany that the ecb and others are pushing for. I think it will be incremental. We will not see deficit spending in germany. My question is, what difference would it make if the German Government were to spend a lot of but money . When he comes over here, he says if we spend money to fix our highways in germany, which they desperately need to do, it will not help. It will not give some young kid in portugal a job. You hit it on the head, it needs to be done. For a rich first world country, the infrastructure is not what it should be. Even just to serve taxpayer interests. They should be doing this fiscal stimulus. I think it is oversimplifying it that this would not be any spill over to the rest of the area. As the German Economy grows, there is spillover effects. Matt sadly, he is right. The autobahn has some serious problems. Cannot go 10 kilometers without running into a construction site. Germany is famous for the audubon. Hn. Autoba anna thank you very much. That is it for us. Hey. Hey. You must be stevens phone. Now you can take control of your home wifi and get a notification the instant someone new joins your network. Only with xfinity xfi. Download the xfi app today. China and the u. S. Get set to sign there phase one trade deal. Should markets worry about a new front on the trade war . Trade optimism pushes u. S. Stocks to records. The market has been up for 11 years. We are in the longest bull market, the longest expansion in history. Profits are not rising, stock prices are. Not in thee investors favor