Transcripts For BLOOMBERG Bloomberg Daybreak Americas 20200207

we don't know exactly how the whole board really panned out. but i think for now, the chairman should be replaced. the chairman should be replaced. if he really cares about the organization, if he really cared about credit suisse, he would step down as chairman. this would really spring stability and allow the opportunity for a true fresh start. but as long as mr. rohner is questionsre will be about who is going to be the next one to be pushed out. so i think the best thing for -- andanization would be when the board made this change, they did say leave it in 2021. that's not good enough. he should leave immediately. francine: david herro, thank you so much for your time. he's the chief investment officer at harris associates and a top credit suisse shareholder. this is bloomberg. ♪ alix: credit suisse bombshell. unexpectedly -- janet john tr -- ceo tid .hiam unexpected live resigns and president trump praises the u.s. economy, and now the economy has to prove itself. the latest read on jobs and wages on deck. welcome to "bloomberg daybreak" on this friday, the brewery seventh. friday, february 7. it is jobs day in the u.s. workt $13 billion put to in the asset class. many say there is still room to run. the treasury markets are telling a different kind of story. it is all about dollar strength today. euro-dollar breaking below key levels. will we see it break below the range we have seen for a while? down by about three basis points. 1.61% is where we print. time now for global exchange, where we bring you today's market moving news from all around the world. from hong kong to frankfurt, to d.c., andshington, new hampshire, our bloomberg voices are on the ground with today's top stories. the markets are awaiting jobs data within the next hour and a half. analysts are estimating 165,000 jobs added. joining me from washington is michael mckee. walk me through the numbers. michael: for years, this has been about how it would affect the fed and the outlook for interest rates, but with the fed on a self-imposed hold, this is probably going to be start to be seen in the context of the 2020 elections. i think what we will look at most importantly is the earnings numbers. our workers better off because the labor market is tightening? hourly workers have declined the last few months, not what you would expect. we will see if that continues or if there is a turnaround. that doesn't mean headline job growth won't still matter. the blowout adp number earlier this week suggests that there is room for an upside surprise, so we will keep an eye out for that. then the question is, is that maintained, and where does that take the on employment rate? the other thing is the annual benchmark revisions. deliberate apartment set from march 2018 to april of 2019, there were 500,000 fewer jobs created then had been reported. the 2018-20 19t job market really looks like. it won't change anything for the markets, but it does get a lot -- a lot of publicity. maybe that means there is still room to run here. alix: thank you. we want to go to asia on the coronavirus outbreak. the death toll has hit 638. joining me is rishaad salamat. walk us through any sort of updates we learned overnight. a lot of controversy over the dr. that first identify the outbreak. rishaad: absolute tragedy there. this meant pronounced dead, the one who first set off the alarm bells in regards to this coronavirus outbreak. he succumbed to the disease itself. many people in china now questioning the government because they had silenced him at one stage, and then he was allowed to speak again, and then silenced. people have really come and called to arms in regards to his death. away from the human tragedy of looking also have data at the inflation figures. they are likely to be bundled in. the corporate's are hurting. burberry saying they can't give full guidance, saying that they ,losed hundreds of their stores and the ones that are up and have seen a 70% to 80% decline in sales. foxconn, the apple supplier, is down, too. they are staying out another week. toyota shut down continues here as well. singapore has gone to orange alert, the equivalent of the sars outbreak. people have been asked not to shake hands and find different ways of greeting each other. shipe have this cruise just off of yokohama with 61 cases. they are in quarantine, too. the death toll at the moment is 638. are 25 cases,here in singapore 33 cases, and two of them are regarded as being serious. alix: thank you very much. i would go to europe, where credit suisse ceo tidjane thiam has resigned. he will be replaced by thomas --s time -- thomas got stein thomas gottstein. joining us is francine lacqua. what happened? why now? francine: this is pretty unclear. we know that there were concerns that the spying scandal not once, but twice over the last couple of years, had tainted the bank. the chairman had concerns about that, but a lot of investors thought this was behind the chief executive because he was ther directly implicated in spying scandal. last week emerged a story of a huge fight between the chief executive and the chairman. unclear whether this was on strategy or ways of dealing with some of the spying allegations. since last friday when the story broke out, many big shareholders, including david herro, had come to the defense of the chief executive. yesterday after a board meeting, it was pretty much a surprise that tidjane thiam had been ousted and replaced with a man that had been at credit suisse for 20 years. we did speak to david pharaoh minutes ago -- david herro minutes ago. he called several times for the chairman to step down, but does support the new executive thomas gottstein. he said that harris associates is still committed to credit suisse. they are the biggest shareholder , with over 8% of shares. alix: thank you. now we had to germany, where industrial production fell 3.5%, adding more downside risk to the euro. joining me from frankfurt is daniel schaefer. walk us through the details here. daniel: yes, it has been a , much larger, 3.5% than expected. it is the biggest since the financial crisis, and it comes on the heels of factory orders yesterday which also dropped the most in more than a decade. now all of this may mean that the german economy might have contracted in the fourth quarter , and this is obviously prompting renewed recession fears in europe's largest economy. the german government is sentimento improved among german manufacturing companies. it has only recently slightly moved up its gdp forecast for to 1.1%,, from 1.0% but there are renewed risks. the flareup of a potential trade war between the u.s. and europe that might come, the risks of the coronavirus spreading having .n impact on the german economy german companies have already had to shut down plants in china temporarily. and certainly, we have already seen several large german companies warning, including daimler, that the outlook for this year could be worse than expected. so in all, and gloomy outlook for the german economy. alix: let's turn back to the u.s. companies like uber saying it will deliver its first ever quarterly profit by the end of the year. joining us is dani burger. it seems like it is enough for now, according to most analysts. dani: absolutely. we heard from j.p. morgan that the era of growth at all costs is over at uber. this is a step towards achieving greater profitability. you just need to look at the share price reaction premarket. investors are excited. they are moving away from the cash burn that had seen uber drop so much from its ipo price. they are definitely not giving a full year of profitability, just one quarter at the end of the year, but if they can get to that full-year, it means they might be included in major indexes, and that brings a lot of passive money. we could see some big gains in reaction to this. we are seeing the effective cost cuts that contributed to this view of profitability by year-end. we saw $615 million lost. that compares to an 870 million dollars loss from a year earlier, so some big effects from cost cuts. uber is still investing in things like electric scooters and helicopters, but for now, those cost cuts really working out. alix: thank you very much. finally, in the u.s., seven democratic candidates take the stage a new hampshire following the iowa caucuses earlier this week. joining me from manchester, new hampshire is kevin cirilli. with no necessarily clear winner from the iowa caucuses, kevin. kevin: no, with 100% of precincts reporting, pete buttigieg working out a victory, but essentially it is a razor thin majority against senator bernie sanders. yesterday i went to bernie sanders' press conference, and he was doubling down on the feeling that he won. he got the most in the popular vote, setting himself up for a longer-term strategy where he feels if you get the most votes, you will win. tonight, ahead of this crucial debate, this is the first time where buttigieg is at the top of the polls, and being perceived and treated like a front-runner. yesterday i spoke with the national press secretary for the sanders campaign and asked her how they are going to draw a contrast with the buttigieg campaign. what she told me was essentially, they are going to talk about medicare. look for a preview of an attack you could hear from bernie sanders and elizabeth warren against pete buttigieg. what i am very struck by is how former vice president joe biden is going to try to re -seize some of the momentum. alix: thank you. we will have special coverage of the new hampshire primary on tuesday, february 11. coming up, more on your morning trade and analysis of the markets in today's first take. this is bloomberg. ♪ alix: time for bloomberg first take. joining me from our in-house team of wall street veterans and insiders, vincent cignarella, carl riccadonna, and also with us, torsten slok, deutsche bank chief economist. i'm starting with you, carl. it's jobs day. what are you looking for? carl: we are very close to consensus this month, so about 160,000, especially if we see these back revisions that lower the pace of hiring over the last couple of years. no change to the unemployment rate yet, but we look for that to grind lower over the course of this year. looking for a year and rate closer to 3.3%. torsten: we have 190,000. a few things pushing higher, namely since is hiring. the weather was milder, so it could be lifting the numbers a bit. of course, the coronavirus. don't know if it is showing up yet in the data. a joltis a little bit of in the numbers today. vincent: the traders are with you. we saw good adp numbers. basically good numbers overall. that as mike mentioned earlier, we are going to focus on earnings. at the end of the day, that is the feedback loop. if the consumer has money in their pocket, they are going to spend. it rolls downhill. alix: but we are seeing a significant moving euro-dollar, particularly breaking some levels that started yesterday. i wonder, if we get that number that torsten is looking for, does that continue the rally in the dollar? is the error toast -- the euro toast? vincent: wednesday was sell cable. we are going to see with this new law enacted with the treasury, where corporations can complain about currencies, if you will, at some point down the road, trump is probably going to focus on germany, auto tariffs as we get closer to the election. that is going to weigh on the euro, on the election. torsten: we had a client on wednesday with a big discussion about where the outlook was, and surprised that there was very little conversation about today's number. there's not expectation that it will be way over the top, and no excitation there will be a big crash. it is almost as if we have all come to accept and recognize there is very little creation to jobs numbers to what it used to be. if we are just going to see sideways movement, and mr. bartley, if average hourly earnings and wages are running a little over -- and most importantly, if average hourly earnings and wages are running a little over, that is something they are paying attention to at the fed. carl: looking at the aggregate income number to make sure the consumers have the spending power to continue propping up growth in an environment where global growth is not there, germany certainly doesn't look like it is going to be much of an engine, and when we look at the u.s. economy, housing very small contribution. business investment is largely absent from the picture. if consumers are doing ok, we can probably muddle through. if they are showing signs of frailty, that is a big problem for the global economy. vincent: when you talked about the global economy, coming into this year, asia was the bright spot. new trade agreements, the are ecp movement, the potential for and now pick up, coronavirus has stifled that. now we are back to the united states because there are no alternatives. alix: we are not overbought, even at this point. vincent: we will see. there's a lot of enthusiasm in the equity markets. at the end of the day, i promise you, these are untouched by human hands. these are algorithmic models trading this, and they can swing both ways. alix: talk global growth to me for a second because you just changed years at deutsche bank. walk me through what you guys did. torsten: we basically tried to quantify what are the transmission channels for the virus. of course, it all originated in china. the issue becomes, how did it rip allowed, and what were the effects on the rest of the world? we basically had that growth in q1 would be flat, a pretty significant hit to the chinese economy. but the conclusion more globally was that global growth would only be down year-over-year by 0.2%. that means that at the end of the day, everyone, when we sat around the table, agreed this is probably going to be temporary, and we will have almost complete payback in q2. that means the net effect might be relatively small, at this point, at least. to doi think what we have is really pet attention to a lot of anecdotal evidence. that is where it is going to show up first. when we hear hyundai is shutting factories in south korea, airbus reducing production, toyota delaying production, foxconn and whatnot. we are in a world where it is just in time inventory management, so ripple effects can really cascade across the globe in ways you wouldn't really be able to see in macroeconomic models. i think we are safe in today's payroll number. we are probably safe in the february number. but if these shutdowns continue to ripple across the global economy, once we get to march, april, i think we could start to see some real disruption. the manufacturing sector is not in healthy footing. the manufacturing ism looked a little better at the start of this week, but in general, look at the german industrial production factories data. manufacturing job growth has been extremely weak as well. we've got some real problems in the manufacturing sector. torsten: that's why it is all about the transmission channels. maybe some of these channels that we are overlooking, there are ways that this could be spreading to individual .ompanies outside of china carl: which means a better parallel. people go back to sars, but a better parallel might be the japanese fukushima disaster, which caused those kinds of supply chain disruptions. gm was stopping production lines because they didn't have a $30 microchip that could be sourced elsewhere in time. alix: thank you very much. torsten slok of deutsche bank will be sticking with me. any charts we use throughout the two hours, go to gtv on your rental. -- under terminal. this is bloomberg. ♪ alix: the impact of the coronavirus is starting to be felt in other areas, in particular, will refineries in china. they are processing 15% less crude, and they could cut that breakeven if the coronavirus continues hampering demand. a shrieking market for gasoline, if it -- a shrinking market for gasoline, aviation, and fuel. this is bloomberg. ♪ ♪ alix: this is "bloomberg daybreak." happy jobs friday. you're looking at the s&p down 0.3 percent, but yesterday we closed at record highs. not a lot of risk wanting to be taken into the weekend, where any headline can happen. the dax in germany, you are having a solid week for european stocks, but the dax underperforming because of the weaker industrial production out of germany. we are seeing some really interesting price action in euro-dollar. watch these levels, down by 0.2%. you are looking at a potential unwind here of the dollar. --you pot stocks last year if you pot stocks last year and hedged them to the dollar, you may have to unwind here. in germany down by about one basis point. crude off by 0.6%. we are paying close attention to his credit suisse. it is sinking in european trading after the surprise resignation of ceo tidjane thiam, who was ousted after a power struggle with the company's chairman. torsten, i did want to highlight the governance of this. how it feeds into the esg conversation. how are clients talking about esg, how they think about it, how they invest in it? torsten: it is becoming a very important topic because more and more, any asset managers, pension funds around the world are beginning to ask are we esg compliant. what that essentially means is they have invested more and more money going towards esg compliant companies. and then the debate is for individual portfolio managers, what companies should that be, what sectors should it be, and globally, what part of the world are more esg friendly than others. alix: i was struck by how quickly the board did act like the fact that shareholders were against it. one shareholder in particular, david herro of harris associates, warned please don't let tidjane thiam go. here's what he had to say recently to bloomberg television. david: for now, the chairman should be replaced. the chairman should be replaced. if he really cares about the organization, if he really cared about credit suisse, he would step down as chairman. patrick, i was struck by the conversation with david herro. he didn't really have an answer. what is your take on where we go from here? patrick: i think it is really incredible that even after thiam was replaced a day after he was ousted, this thing is still rambling on. you just had herro saying he wants rohner to be replaced now. anust interviewed mr. rohner hour or two ago. in his answers, he was very loyal and approaching in a fact-based manner that he would agree to disagree with guys like herro. my perspective, he's just saying you can try to unseat me, but we will see what happens. alix: there's two questions in relation to that. why now? i was struck by how quickly the board acted. are we going to have more accusations of spying coming out later, or did something happened that came to a true boiling point? patrick: from my conversation with mr. rohner, it seems that it was based on the spying incidents, and the second was potentially worse than the first because it indicated a pattern. it was at that stage at the end of last year that the board had to swing into action and think about topics like secession -- like succession. these news articles weren't stopping. i think that all accelerated in the last week or so. it accelerated with the shareholder attacks. you have seen the result of it this morning. alix: i was also struck by the fact that they are promoting an insider to take tidjane thiam's job, we knew can make the argument that this is a culture shift or change that needs to happen. what are you hearing from shareholders or experts about that? patrick: it is a cultural shift, but in a way, also ace shift back to his with her lend. thomas gottstein -- a shift back to switzerland. thomas gottstein has been at the bank a long time. i wouldn't necessarily say it is a cultural issue. i don't think that thomas gottstein has been accused by anyone of spying. alix: this also comes with the structural issues that banks in europe are dealing with, which is negative rates and the head of the ecb saying that we are kind of out of ammunition. torsten: negative interest rates have been so damaging for so long. we now see the experiment in sweden where they have tried to go away from negative interest rates, and we are watching very carefully. it is pretty clear across the economic data in the banking sector that some of the problems of negative interest rates are very pronounced. alix: when you talk to clients about europe, at the end of the buy it was about buy value, europe. has the conversation shifted? torsten: there is still expectation for a rebound in the second half of the year. that opens up conversations about if it is just manufacturing or also services. services is doing well. the many factoring sector has been doing poorly because of trade war's, and the service sector has been doing well. so now the question comes again that maybe the manufacturing sector is a little bit weaker, may be europe takes a little while longer. alix: torsten, you're going to be sticking with me. patrick winters of bloomberg, thank you. we want to get an update on headlines outside the business world. viviana hurtado is here with first word news. ritika: we begin in china -- viviana: we begin in china with the coronavirus outbreak. one of the victims, the chinese doctor who was initially sanctioned for warning about the deadly disease, leading to online anger against the communist government. singapore has raised its virus response level, now the same status as it was for the sars at a benefit -- the sars epidemic 17 years ago. a heated call between president trump and british prime minister boris johnson in a dispute over china's huawei technologies. president trump spending months trying to persuade the u.k. not to allow huawei to help build 5g networks there. he's unhappy mr. johnson defied his demands. to the iowa caucuses, the final vote counts are in. pete buttigieg holding a razor thin lead over bernie sanders. 26.2% stateg had a delegate deliver lengths -- elegant equivalents, 0.1 percent more than bernie sanders. 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. i'm viviana hurtado. this is bloomberg. alix: thanks so much. we are going to take a closer look at one generation to getting to enter the workforce, bornhat is gen z, those from 1997 to 2007. ey released a study, writing z's influence will be increasingly seen and felt from employers, marketers, technologists, and business leaders." joining me is the author behind eyt report, marcy merriman, america's cultural insights and customer strategy leader. if you are a company and you want to hire, this is what you have to be focused on. what did you learn in your survey? marci: the biggest thing is that this is a generation of contradictions, which is why we wanted to do this in a first-place. we had been looking at this like a homogenous generation like everybody else, and this is the same mistake that was made with millennials. we really want to understand how they are different, how they are unique, so we did a segmentation study to understand the unique aspect of them. alix: what did you find? marci: we learned there's actually five unique segments, not just what they are doing, but why they are doing it. we found five unique segments driven by different things. alix: we have them here. stress drivers -- so these are different types of people. really high achievers versus those that want a lot but don't want to do anything to get it. can you walk us through these? that: the biggest one really dominated is stressed drivers. they are dominated -- stressed strivers. they are dominating the discussion. they are driven by fear. it is not so much opportunity. they are concerned they are not going to be good enough, not going to be able to get into the best colleges, not going to be able to get jobs. the second most influential, not the biggest, are the authentic activists. they are the ones we are seann come out in parkland, talking about climate change, talking about all of these different things, really pushing on society to do things differently. they are also driven by fear, but they are german by fear of what will happen if they don't do it. these two generations together make up almost half of it, but the reality is there voice and what they are putting out there represents much more. torsten: how do you think about this relative to the other generations? consumer confidence for the younger generations is actually relatively low compared to the older generations, which looks , thatike a systematic younger generations don't have 401(k)s, have trouble finding health care. is there anything that makes this generation different from what the other generations are at the broader level? marci: they are much more pragmatic, i think, because they have seen what happened with millennials. going to college, racking up massive debt, not being able to get the jobs they dreams were out there. they are met with this reality to work hard, to save. they are even thinking about retirement. a portion of the more think about what is happening down the line. torsten: one thing that has been more evident recently is if you look at the people who have noncompetes in their contracts with employers, the young generation has a more significant amount of noncompete agreements relative to the old generation. so one thing that becomes very important is what can they do. if they are high achievers, , anything that can do other than work hard and save money? marci: i think what we can do as employers, as businesses, organizations, is understand them. a lot of them are working hard. who is comingng in as employers, understanding why they are different, why they are so different from past generations, not buying into the stereotypes of youth and thinking they are just like all youth because they are different, and how they are different from one another. torsten: is there a conclusion which sectors in the stock market i should buy after i've read the paper? alix: that would be nice. i don't know if we can know that yet because they are select 20. marci: the oldest are turning 23 this year, so they are just now moving in. alix: if we measure wages, that is how we are going to measure wage growth, but then you have a generation coming and that may be valuing things different. maybe there's a different thing you need to do to woo them to come work for you that isn't going to be measured in wages. torsten: absolutely. if your preferences change in economic terms and you have a generation that wants to do some thing else, it becomes critical to have an understanding of these issues. alix: i wonder if the models continue to work the same. marci: we are understanding the unique segments within them. if you say gen z wants to all have a chance to do something social, or climate, or whatever it is, not all of them care about that. there's a group of them that care very passionately about it. understanding that group and what drives them, there's others that care about money. their top concern is, can i make enough? can i support myself? one-size-fits-all will not win with this generation, and companies will miss a huge opportunity. alix: i also wonder how this winds up playing when we were talking about yesterday earlier. you have shareholder push from one side, then maybe a group of younger generation coming in from the other side. torsten: it fits in with the hope little discussion that the younger generation has little preferences that look different from what older generations have. if there is more awareness in the other generation of what is going on in society, and is beginning to step up and say we want to change, then the position is around what i think they want to change and what will they do, and are they willing to do something to change those things, and what can companies do. alix: torsten, think a lot, and marci merriman, thank you as well. i wonder what the next will be, gen w? coming up, if you have about $200,000, that is coming up in today's "businessweek" feature. if you have a terminal, go to tv . scroll through and check it out. this is bloomberg. ♪ viviana: this is "bloomberg daybreak." we begin with burberry. it's scrapping its yearly forecast. the british fashion house warning that the coronavirus outbreak wiped out at least 3/4 of sales in china. stores, and of 64 at shops that stayed open, sales have plummeted. by the end of the year, uber forecasting its first ever quarterly profit, months earlier than planned. it is a signal from the ride-hailing service that cost cutting are exceeding expectations. uber reporting a fourth-quarter loss that was less than estimates. activist investor paul singer has a new target. elliott management built a stake of almost $3 billion in japan's softbank group. the hedge fund believes softbank is one of the world's most undervalued companies. tokyo shares were up as much as 8%. i'm viviana hurtado. that is your bloomberg business flash. alix: we turn now to our weekly "bloomberg businessweek" feature to profile stories in the latest issue. first up, the consumer economy just doesn't care. the manufacturing shrinks while the consumer sector keeps on driving. and then, i sabotaged my boss with ransomware. our bluebird reporters goes to the motions of how ransomware attackers force you to give them money. and nobility for sale. for $88,000 and up, you too can be a parent or countess. joining us -- a barren or countess -- a baron or countess. joining us is silvia killingsworth. is a tale of two economies. you are seeing a mild recession in the manufacturing and industrial sector from last year. meanwhile, consumer confidence and consumer numbers are up. mcdonald's, target, everyone is seeing great numbers. part of it is that the manufacturing is a much smaller percentage, about 11% of gdp. but also, the trade war is the real obvious factor here. that has been the most affected. consumer has not been as much affected by the trade war. alix: i wonder if, in your research for the piece, does that stay the case, or does it bleed over? silvia: it depends on how 20/20 plays out and what ends up happening. i think there are a lot of initial proposals for the tariffs, consumer products from china that were may going to be affected, but that sort of fizzled out. so it really depends how we go forward. alix: let's go to my favorite title, "i sabotaged my boss with ransomware." what did we learn? silvia: any old person randomly on the internet can become a hacker. you don't have to have sophisticated tools. you don't have to be able to code anymore. you can go online, to the dark indexed,e it is not and download software that basically helps you run a campaign of essentially kidnapping ransom, but it is data. we had someone log onto a -- don't open attachment unless you are sure who it is from. we sort of pretended that he was filing a piece. max opened it up and it took over his whole computer, encrypted all of the files, and then said you need to send me 150 dollars in bitcoin or else i won't get your data back. that is obviously on a very small scale, but just replicating what can happen to companies, cities. it happened last year. pitney bowes had this problem. a couple of cities in florida had millions of dollars ransomed. this is a real problem that is affecting and infecting companies and states and cities, as well as into the jewels. alix: i want to see what -- as individuals. alix: i want to see what that help desk call is like. let's end with this nobility title. apparently i can buy it. silvia: because of the laws, these titles, most of these are in germany, where there are a lot of titles because of how geographically disparate it was in the late 19th century. wilhelm, the kaiser the titles don't mean anything legally. they are basically just social status. they still have to be inherited or given down the family line, but the key, the loophole is adoption. you are basically seeing adult adoptions. someone might say i've adopted this person, and then that person will pay them 88,000 dollars up to millions of dollars to be a baron or count or prince. alix: i would totally rock a count steel title. [laughter] alix: silvia killingsworth, thank you. you can read all of these stories in "bloomberg -- "bloombergnow" businessweek" now. jeff bezos paid $18.5 billion vignette 19. it is a record for the artist. he bought the paintings in a november auction. speculation is that he might be starting to build an art collection. coming up, rising oil prices and the perception of inflation could be having an effect on bond yields. if you are jumping into your car, tune into bloomberg radio on sirius xm channel 119 and on the bloomberg business app. this is bloomberg. ♪ ♪ alix: time now for trader's take. joining me is vincent cignarella, voice of the bloomberg audio squawk. type in squa on your terminal. no one prepared for inflation, and you are looking at -- vincent: we are looking at inflation. line, the five-year-five-year rate even. the green and red lines, the spot lest the five-year contract for wti crude. dayse seeing oil dip these , primarily the coronavirus effect. this isn't going to last. it is most likely going to got the new later than second quarter. the one thing the fixed income market is trailing behind is the concept of inflation. one thing the equity markets cannot comprehend is inflation. we are going to get inflation in 2020. we are either going to have a president do middle-class tax cuts, which will create more disposable income, or if the election turns the other way and we get a democratic president, we are going to see some income equality actions taking place. we are going to be putting money in the hands of the people who spend it, not invest it. i think we can see the fixed income market take a little hit as we go to 2% on the 10 year. alix: doesn't it matter the type of inflation, if it is oil related or wage related? vincent: it matters to the fed, and i honestly don't see why. when you match up oil with inflation, you can see a real close correlation. that food and energy doesn't count maybe for the think tanks, but not the guy on the ground. alix: happy birthday, by the way. coming up, job day coverage continues with our all-star panel. this is bloomberg. ♪ [ fast-paced drumming ] [ fast-paced drumming ] that's why xfinity mobile lets you design your own data. you can share 1, 3, or 10 gigs of data between lines, mix in lines of unlimited, and switch it up at any time. all with millions of secure wifi hotspots and the best lte everywhere else. it's a different kind of wireless network, designed to save you money. switch and save up to $400 a year on your wireless bill. and save even more when you say "bring my own phone" into your voice remote. that's simple, easy, awesome. click, call or visit a store today. ♪ alix: welcome to "bloomberg this friday, february 7. i'm alix steel. let's take it from the top. >> they will be impact on economic performance in q1. alix: the pboc sounds confident as the dust told from the virus rises above 600. >> the corporates are hurting. foxconn is saying that the people who were meant to go back to work on monday stay out another week. alix: burberry scraps financial guidance for the year, with the virus cutting sales by 3/4 or more of sales in china. >> as long as mr. rohner is there, there will be questions on who is going to be the next one to be pushed out. alix: david herro's endorsement wasn't enough as credit suisse ceo tidjane thiam and excitedly resign. a month-long spying scandal -- tidjane thiam unexpectedly resigns. the months long spying scandal continues. francine: a lot of investors thought this was behind the chief executive. bank thiam pivoted the away from the volatile trading business into catering to clients. german industrial production plunges by the most since the global financial crisis. drop,has been a surprise 3.5%, much larger than expected. it comes on the heels of factory orders yesterday, which also dropped. pres. trump: the years of economic decay are over. alix: president trump singing the praise of the american economy. michael: now with the fed on its self-imposed hold, this is probably going to start to be seen in the context of the 2020 elections. i think what we are going to look at most importantly is the earnings numbers. our workers better off now because the labor market is tightening? alix: wages and the validity of the phillips curve in focus. in the markets, a little bit of a risk off field. industrial production numbers out of germany were terrible, but how much risk do you really want to be taking it over the weekend? s&p futures down 0.2% after another record close yesterday. euro-dollar particularly. how much more upside will you see if the dollar breaks through some key levels? still a touch of buying coming into the onto market. joining me the hour is lara rhame, fs investments chief u.s. economist. i always love having you on set. thanks for joining. what is the one thing you're talking to clients about? lara: i think we are going to see seligman to him continuing. we really need to look at the solidgs data -- to see momentum continuing. we really need to look at the earnings data. there's a lot of uncertainty coming from international economics right now, and going forward, i think there's still some concern that we haven't seen the last of the bad data. alix: let's talk more about jobs. we are just about half an hour away from that number. is subadraon set rajappa of socgen, head of u.s. rates strategy, and irina novoselsky, careerbuilder ceo. we're looking at wages and jobs. what do you find? rina: it continues to what -- it continues to be what we were seeing before. especially during an election year, where we are with the skills gap shortage, the pressure on these companies is only going to continue to accelerate. alix: where are they getting all of the jobs? the adp number was so amazing. literally where are they coming from? irina: one of the things we don't talk about is turnover. it could be coming from growth in jobs, but also feeling the changes that are happening. we also have a really mobile workforce, with five generations in the workforce at the same time. we have people doing possible hours, people doing jobs a lot more. you mentioned gen z in the last segment. they are driving a lot of different changes for companies, whether it is purpose, but these digital natives have a very different view on work. alix: sue bought, what is it -- subadra, what is your call? subadra: it is going to be difficult to have a clear take away after this number. we have been watching earnings. we will be watching the headlines number. we will also be watching revisions. lara: i am curious as to what this could do for rates. we have seen long-term rates come down so significantly since the outbreak of the coronavirus at the beginning of the year. do wages figure into that? subadra: absolutely. think wages always figure into the bond market. it is very hard to get excited about wage numbers. they have sort of stayed between the year-over-year earnings 3%.ers, anywhere around we did see it rise up to 3.4% earlier in the year, and then it has been steadily defining. you really need to see steady gains to get excited for ye the outlook for inflation. managers are seeing in 4%, so we hi 3%, low are seeing a little bit of that movement happening with low income and higher income. alix: is that a good thing? lara: well, yes. what is the fed's big concern right now? they want to make sure growth has traction going forward. they have the low and implement rate. growth is stagnant, but i don't think you can complain given where trend growth is. they are worried about the devil they don't know how to fight, which is deflation. these perpetually low inflation numbers. the best case scenario for everyone would be those center gains, the wage gains. i am not saying we want inflation. i am just saying it is the last piece that has never really re-normalized since the crisis. to that degree, standard of living gains and seeing the broad base of rising tide finally lifting all ships with these lower income wage increases i think will be something everyone would welcome. irina: one of the things that is interesting is benefits are increasing. we talked about the gen z, the millennial population are asking for more than salary increases. we are seeing that being given out beyond just wage increases, but benefits. more paid time off, different fox ability for work. sometimes that overall wage growth number doesn't capture those hidden benefits. be in some seems to sort of a coma the last several years. i think that pickup in wages would be a positive, especially given the fact that broadly speaking, even realized inflation and expectations are very low. you're seeing some sort of a pop or a steady rise in income that is probably a good thing. alix: i know you guys on the street have a lower call for the 10 year than the lowest out 1.2%. let's pretend we see more of these wage increases, whether on the top line or bottom area of workers. do you get a big rise in treasury yields, or can you just not get that? at 1.7%, the buyers keep coming into the market. subadra: the transition mechanism between wages and treasury yields has been nebulous in the past. for me, the risks are more skewed toward the downside broadly speaking. inflation numbers being steady is a good thing to keep the fed on hold. if you do see numbers turn down, you will see a much more aggressive fed. that is where i feel like the bond market is always going to trade to its -- trade towards caution and optimism. alix: so i am guessing you are wanting to buy any kind of selloff? subadra: absolutely, not just me. it would be very hard-pressed to find any sort of bears in the bond market in an environment like this. alix: or if there are, they have probably definitely covered at this point. do you agree? lara: i do. you are seeing it across the credit curve across the globe. i think em is maybe one area, and i would be interested in your views on that, where growth fears have really resonated not into lower rates, but actually into some concern with a broader risk off move. subadra: i think that is going to be the case because china, even prior to the coronavirus episode, they have been continuing to deleverage. i think that has had a spillover effect into broader asian economies. most asian central banks have been retaining and easing bias. with wildfires in australia, the bias broadly speaking in asia is going to be towards more easing. we just need to get through some of these key risk events over seeupcoming year to optimism buildup in emerging markets. of pickupsee a sort in developed markets group, you need to see synchronized pickup and global growth in asia, as well as europe. lara: we are all talking about rates and the growth outlook. equities are still close to the record high. how do you reconcile the fact oil market has not bounced since a drop early in the year? clearly concerned about the future of growth in the coming year. the bond market is rallying, reflecting the growth, and here we are with equities at the highs. irina: there is a divergence between what the equity markets and what the bond markets are there is abadra: divergence between what the equity markets and what the bond market's are seeing. fear in thearly a safe haven part of the market that there is some sort of demand destruction going on. it is because these markets are afraid that there is not enough clarity on how the coronavirus is going to play out. most economists have revised q1 growth in china quite meaningfully. we don't know if this is going to extend beyond q1 into q2. that is really where the uncertainty premium comes from from a lot of these safe. . haven assets alix: alix: look at jobs day -- these safe haven assets. alix: look at jobs day. our companies talking about the virus at all or demand destruction? irina: it is too fast for it to have that quick of an impact on jobs, but we have seen this happen with other situations internationally. it just starts companies to think, should they be pulling some of their businesses and employment back to the u.s., should they be structuring plants closer to home. we haven't seen it yet because it is just too quick to have that kind of demand and supply impact. but if it continues, there's going to be some changes. alix: the strength you are seeing in general, can you make a distention between companies that are concerned internationally versus domestic? irina: it is a convergence again. the top largest companies are starting to put more jobs out there, and we are seeing more nb.wth in s they are having the hardest time competing for those candidates. it is unclear if they are not filling them, continuing to keep the seats open, or if there is some underlying change. alix: or if we just have a super solid economy in the u.s. we will talk much more about all of this. lara rhame of fs investments, subadra rajappa of socgen, and irina novoselsky careerbuilder will be sticking with us. a week packed with drama and washington -- with drama in washington and the 2020 presidential race. this is bloomberg. ♪ berg. ♪ pres. trump: america's fortunes are on the rise, and america's future is blazing bright. they years of economic decay are over. the unemployment rate for african-americans, hispanic americans, and asian americans has reached the lowest levels in history. wages are rising fast, and wonderfully, they are rising fastest for low income workers, who have seen a 16% pay increase since my election. this is a blue-collar boom. alix: that was part of president trump's state of the union address earlier this week, tilting the strength of the labor market and the was economy. joining me now is david westin. lara rhame of fs investments, subadra rajappa of socgen, and irina novoselsky of careerbuilder are with me as well. you were talking about this on your show this week. what was the main conversation about? david: a lot of it was with a member of -- a former member of the federal reserve board. he is concerned that in fact, we had a real dislocation coming from technology that nobody is dealing with. this is what he said. skeptical about the capacity of public policy to manage a truly substantial displacement, even over a turns us know -- over a transitional period. i don't think we did a good job with trade displacement, and trade displacement itself can be small-ish compared to what happens with technology. david: there are potentially 10 million jobs around the world that could be lost to technology. dan says we are not ready for that, particularly in the auto industry. alix: and in terms of coal, we have all those jobs lost, and there was no retraining that happened, which led in some ways to president trump's election because there was no hope for them. david: glenn hubbard was there also, former chief economist for towards w bush. he says -- for george w. bush. he says there's a lot of potential jobs that may be up for grabs. lara: we have been talking about the skills cap for a while. outou have the holley wing the middle class, and one of the things we are seeing is that workers are taking career development and want career develop into over happy hours. they want training. they understand they need to get there. one of the most important things is it doesn't have to be a dislocation. we have a supply and demand shortage. we need people to go fill these jobs. we have more than 1.5 million open jobs, but there has to be a massive reskilling. david: it is a big process. alix: it also seems like companies are going to have to put money into that, and that is going to wind up hurting them in the short-term, which we are seeing with climate change as well. how do you see it? lara: i think we have all been wondering when this really tight labor market is going to cause employers to either meaningfully increase investment, try to increase productivity, something that we know has been structurally low for a decade, or when they really start to take over. you hear anecdotally from some of the biggest companies that try toe stepping in to fill those jobs, but it remains one of the most inefficient markets in our economy. we are perhaps better off than a lot of the structurally rigid economies in the your area. it takes time, and that is where you get some of the real discouraging figures from work ers. ask to whatave to extent they play off of one another. as the labor market gets tighter, that is more incentive for companies to invest in the technology that could replace some of the higher paying jobs as well, and companies are forced to start investing in that. irina: it is also a lot of the candidates that have to be ai based, and it is more of experience matching to skills matching. alix: what is the difference between the two? irina: instead of looking for some buddy that has done the job historically, it is can this person do the job. it is driven especially by gen z and millennials that don't have the same view on resumes as the other generations in the workforce. they don't like resumes. they much prefer to say i have sales skills. what jobs can i take with that skill set? i have communications skills. what jobs are available to me? we've invested in how we help our clients use their algorithms to be skills based. lara: i think what is interesting about the trade based dislocation is how regional it was. i'm interested in what they thought is about ai. if we are going to have such significant impact in smaller regions, that is something we really noticed, and it caused one area of the country to have a very different economic experience than the coasts, for example. alix: from my world in commodities, it seems that is a pretty pervasive things. you will have farmers using productive analytics and say this equip it is going to fail, i need to replace it, so you help your productivity and end user. in regard to a small farmer, it might be different. david: and then you need farmers who need to use -- who need to know how to use that analytics. it really sorts people out on how they can interact with ai if actively or not. lara: is the expectation then that the unemployment rate is going to rise significantly, or that we get the same on a plummet rate, but people are forced out of jobs that they had where theylocated to are not able to capitalize as much? david: what we have seen in autos is both. you have people lose jobs altogether, but you have downward pressure on wages and benefits. subadra: to me, the concern is more about the number of jobs that are going to be lost. if you looking at trucking and fast food, the number of jobs could be quite large. how do you train 10 million people to do something different in a short amount of time? the advances are creeping up quite rapidly. i am just worried that there is not going to be enough time to train a very large population in a very short time. lara: particularly --david: particularly when we have never done this well. no one could come up with an exhibit of when we have done this well. so it's not like we can say let's do it like that. alix: that's very encouraging. [laughter] alix: really great conversation. looking forward to that program, david. investments, fs subadra rajappa of socgen, and irina novoselsky of careerbuilder staying with me. tune in this even for the full episode of "wall street week." really dynamic conversations on the big issues you need to know at six clock p.m. eastern on bloomberg tv -- at 6:00 p.m. eastern on bloomberg tv. this is bloomberg. ♪ viviana: you're watching "bloomberg daybreak." we begin with activist investor paul singer. elliott management building stakes of almost $3 billion in japan's softbank group. the hedge fund believes softbank is one of the world's most undervalued companies. in tokyo, shares were up as much as a present. wynn resorts -- as 8%. wynn resorts losing $8 million a day from casino closures and macau. the ceo saying it is too early to predict when casinos will actually reopen. of itsts as much as 3/4 revenue from macau. burberry is scrapping its yearly forecast, warning the coronavirus outbreak wiped out at least 3/4 of sales in china. on the mainland, burberry has closed 24 of 60 stores, and at the stores that remained open, sales have plummeted. alix: thanks so much. a couple of the movers we want to highlight this morning, definitely uber, saying they will have their first quarterly profit by the end of the year. surging, tesla falling, but only a bit. a huge driver of outside gains in the nasdaq. coming up, moments away from u.s. january jobs report. this is bloomberg. ♪ alix: this is "bloomberg daybreak." i am alix steel. latestnds away from the read on u.s. jobs. equity markets a little bit but offrading down .1% the lows of the session. european stocks as well. in other asset classes we want to be watching euro dollar. how much more upside will there be in the dollar? we want to go to michael mckee live at the u.s. labor department. michael: a strong report. in january. created unemployment up to 3.6%, but wages rise .2%, pushing the annual rate up to 3.1%. hours worked unchanged. it was 34 point five in january of 2019. the unemployment rate jumps to in% from a record low 6.7% december. combinedand december increases to 7000. more jobs reported on payrolls. ofual revisions from april 2018 to march of 2019 lower the total number of jobs created five 514,000. that means there are fewer people working today than we had thought, even with the strong report. in part, that is because there are fewer people in the labor force according to these annual revisions. there will be a lot of meaningless discussion on twitter today. you can follow it there. in terms of sectors, another bad month for manufacturers. they lost 12,000 jobs. makers.metal another bad month for retailers. 300 jobs lost. a good month for construction workers. , although theoll department does not suggest any kind of strong weather. interestingly enough, transportation and warehousing was up 28,000, helped by 14,000 couriers and messengers. that may be a seasonal effect. people hired to deliver packages who are still on the payroll in early january. as always, health services up a big. the bottom line, fewer people overall working than we had thought. growth toward slower job broken this last month. alix: stay with me. in the markets you are seeing equity futures almost in neutral territory. the dollar gets a jump. fed fund futures show less easing priced in for 2020, yet you are still seeing buying in the bond market. yields down two basis points. let's get more analysis. lara rhame, subadra rajappa, and irina novoselsky of career builder. lara: this is a number that does not change our view of the tight labor market, a strong jobs economy. these reports have a lot of numbers, it is easy to get bogged down. one of the interesting nuggets is the fact that we have seen the participation rate at 63.4, the highest since 2013. it has been slow, this expansion, it is somewhat of a conundrum, harder to get people engaged in the labor force. that is partly because of the skills mismatch we were talking -- inin the last -- and, the last session. the fact that we are seeing this number reach a broader sector of the economy and bring that number in, the highest participation rate since 2013, is an indication we are starting to see the strong labor market lift everybody. subadra: i think the bond market is focused on the wage number. was 4.3ctation number increase in average hourly earnings and it is slightly below that. this is a steady as she goes number. we do not see -- the revisions were in line with expectations. the headline number is positive. broadly speaking, this does not change the outlook on employment. alix: does this echo what you are seeing in the market? irina: it was interesting the categories they got hit on where we are seeing more construction jobs added. health care is a big category with nurse and nurse practitioners. every city is highly in demand. continuing to see retail decline. one of the things interesting is the number of hours working has gone down and we are seeing that for the flexibility of the workforce. one of the things we are working with our clients is how you continue to bring in diverse workforce outside of gender and ethnicity and also h. pluse seeing that today 50 contributes 40% of our economy around jobs. as this people continue to retire, they are coming back from retirement and taking part-time roles and shorter than 40 hour work weekends. that could be one of the reasons that is driving the hours. i don't know if you have a different view. mike, i know you want to jump in? ishael: what we are seeing the continuing question about how much we can get out of the labor force. a lot of people in the labor force getting jobs, more people coming in, a large number of re-entrance into the labor force. with the benchmark revisions showing fewer people are overall thehe labor force, department has to answer how far they can let echo. there is nothing that will -- they can let it go. we will probably see all of the numbers put into a political context because it is 2020. there the question is do you want to look at the number of jobs created or wages, wages up 3.1% for everybody, up 3.2% for nonsupervisory and production workers. reasonably good numbers. you look the big job gainers like leisure and hospitality, transportation, health care wages, they are still much below other categories. is the expansion working for everybody? these are the things you will see argued out. alix: when you talk about the revisions, 514,000 jobs lower than we thought, does that mean we saw better productivity, we infer that from the lower number? michael: you may see productivity adjustments, but what they do is benchmark against actual numbers of how many people were working instead of the survey numbers. it shows there were fewer people working and fewer people in the labor force so you have to parse the difference between those to get to the productivity numbers. gainss show the job reported after the tax cut not as strong as originally thought. it may mean there is more room to go in the labor force as there are still people who have not come back in. lara: i am interested in what you think about the fed. we had markets continually pricing at another rate cut for this year. obviously there is not a lot of consensus around the timing of that. at the same time you have the fed officials say we are good. there is a high bar for moving in either direction. how do you reconcile that? michael: i think you go with the fed in this case. markets were pricing in a recession last summer and that went away. what you are seeing is the usual market view that every nail needs a hammer and the fed is the hammer. the coronavirus is worrying people. they are pricing in a fed rate cut. the question is when that stops, do markets price it out. the fed will sit on the sideline because there is no data that suggest they have to move one way or the other. subadra: i agree with mike. i think there is not much data for the fed to lean toward easing, at least not from the coronavirus, at least not as of yet. broadly speaking financial conditions are extraordinarily easy. there is no urgency for the fed to act to ease monetary policy. i think they will hold their ammunition over the near-term. alix: financial conditions this loose and the fed having this easing bias or not, how do you get anywhere inside the economy? irina: we keep seeing it every single month. these employment gains are above the underlying trend. every metric that we have we keep seeing -- i think you will have companies pivot toward having to spend on investment. they have been reticent to do that for some time. that is a place where they may have to overcome some uncertainty and try to get those productivity gains going. what if you run out of workers? we are coming up to an election year. how do ceos look at the election and hiring and wages? irina: election years are historically difficult hiring years. we talked about supply demand in equity. it is already difficult to get candidates. one of the ways we help clients find candidates is through different media channels. in an election year, there is a lot of money being spent on getting viewers to pay attention to different political messaging . ceos and companies are now competing with this influx of dollars into consumer eyeballs they now have to spend more to get them to listen to the jobs they have open and get them to pay attention. it becomes a historic thing, a much more competitive landscape. or bads that a good thing for workers? irina: it is good for workers in the sense that continues to be a candidate marketplace, but it will continue to increase days jobs are left open and they'll have an impact on companies. michael: i want to follow up on something lara just said about companies having to invest. you have to wonder if that is true given that uncertainty remains about trade, and the companies do not seem to be having trouble finding workers. they say they do, but they are still hiring a high pace. why not hire people instead of put them on the end of productivity increasing investments for now? you can get rid of people. that is the conundrum going forward for business leaders and ceos. lara: i agree with that. think as i look ahead, there is a lot of consensus around the consumer staying strong, which means business investment is a key concern. companieslot about finding workers, but ceo confidence has gone down. there will be continued uncertainty. when i look at the investor side, it has been week, and i think it will continue to be weak. the end of the china phase one deal, the expectation was you would see a pickup in spending and business investment broadly speaking. with the election year uncertainty hanging everett now the coronavirus -- hanging over it and now the coronavirus, i when less optimistic you will see the investments that boost the economy. that is part of the reason we are more cautious. alix: it looks like the bond market probably agrees with you. you are seeing some buying despite the jobs numbers. would you be a a buyer? it is hard to justify being long. our bias will always be to be long bonds. i think if we do not get a lot front,lines on the virus probably trading in a range between 1.40 and 1.50. we will reprice to a lower range given all the risks of the economy. alix: great conversation. thank you also much. michael mckee, subadra rajappa, irina novoselsky of career builder. lara rhame will be sticking with me. we want to give you an update on what is making headlines outside the business world. viviana hurtado is here. viviana: we begin with the change at credit suisse, the ceo resigning. it all has to do with the bank's management hiring private detectives to follow former executives. credit suisse directors rebuffing appeals from major shareholders. instead they sided with the chairman. the new ceo heads the swiss unit. now to a heated phone call between president trump boris johnson. bloomberg has learned the president rated boris johnson in a dispute over china's huawei technology. donald trump spending months trying to persuade the u.k. not to allow huawei to build 5g networks. he is unhappy johnson divide his demands. we end with the iowa caucus final vote counts. pete buttigieg holding a late -- a thin lead over bernie sanders. buttigieg has .1% more than bernie sanders. pressws agency associated will not call this one because of the tight margin and the irregularities. 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. i am viviana hurtado. this is bloomberg. alix: let's break down these jobs numbers one more time. a huge gain in january. 225,000. we also have the employment rate of 3.6%. the move five -- a move higher in the labor force participation rate. basis, we areear now over the 3% level, 3.1%. the highlight, annual revisions came in 514,000 jobs lower. starting this year, less robust track from last year, but the numbers are solid. the question is where do we go from here? s&p futures down .4%. coming up, we will focus on manufacturing jobs, the week part in theweak jobs report. we will speak to the ceo of gmm. bloomberg users, interact with charts on gtv . this is bloomberg. ♪ viviana: this is "bloomberg daybreak." i'm viviana hurtado with your bloomberg business flash. begin with the 737 max. not the only problem boeing has. the company says targets debut in december star liner had a second software flaw. boeing catching the above while star liner was in orbit. another glitch prevented the unmanned spacecraft from reaching the international space station as planned. isthe end of the year, uber forecasting its first-ever quarterly profit one month earlier than planned. it is a signal from the service that cost cutting measures are exceeding expectations. uber reporting a fourth-quarter loss less than estimates. i am viviana hurtado and that is your bloomberg business flash. alix: let's recap those jobs numbers for january. 225,000 jobs added, very strong. the wage numbers coming in light , up .2%. the revisions to all of the historical data coming in at 514,000. that arises president trump's job a bump. with a special guest with ceo insight. we are focusing on manufacturing companies. manufacturing jobs fell by 12,000. here is the man behind the scenes. gmming us is ravin gandhi, founder and ceo. it is one of the world's largest suppliers of nonstick coatings and products. it does business globally including china, india, and the eu. also with me as lara rhame of fx investments. where you stand in the manufacturing sector exposed to tariffs, exposed to the virus, how is business? ravin: we had a great year in 2019, up 25% year-over-year. in that sense it was great. obviously the economy remains rocksolid. as i looked at 2020, we are forecasting low single-digit growth. the virus is a big factor. trade with us is still a factor and that is because of the tariffs. those are my concerns. fascinated by the space you are in. -- last year was a big year where manufacturing declined across the board. we saw the latest ism numbers seem to bounce. do you reflect that would you feel like there is still uncertainty? ravin: in my business there is a lot of uncertainty because we supplied to most multibillion-dollar manufacturers of cookware and small appliances. we saw a lot of sales in q2 and q3 2019 because people knew the tariffs would hit them in the third tranche. mightr for 2020 is there be a lot of people in america who have warehouses full of inventory that will be sold off. that is a potential dark cloud on the horizon. lara: how do you thread the needle between the uncertainty in your supply chain, the potential regulatory uncertainty , the election debate crystallizes, the candidates become clearer, when does it clear up? ravin: i do not know that it does clear up. i will take those one by one. in terms of the supply chain, that was turned upside down. i give the president some credit for making china blank on one hand, but on the other hand there is lots of inflationary risk if those tariffs are paid by americans. they are not paid by china. in china, you have a lot of people who went to india, who went to malaysia, who went to vietnam. they still have to get things set up. if you're talking about the broad political risk, i think that is the biggest one. if i look at the race right now, there are a lot of people on the left on both sides of the left, moderate as well as on the socialist side. that is scary. it will be fascinating for us. lara: i am interested in your company's experience with this phase one trade deal. that theme evidence agreement occluded rolling back some tariffs. president went to china with issues that go far beyond importing and exporting debt things like intellectual property, other protections, diverse security, does humpty dumpty go back together again? ravin: no. i think there needs to be a phase two. i have been on the show a number of times being a cassandra saying this guy will fall if you have tariffs. that did not happen. the stock market remains high. the president did well in that sense. there is obviously hundreds of billions of dollars being paid by american consumers and inflation is something nobody wants. if we get it, i think it makes the president vulnerable. if we do not have a recession in 2020, the president will be hard to beat. if things start falling down and people start seeing the tariffs and the potential inflationary situation is an unforced error, that will make them very vulnerable. lara: so great to get your -- alix: great to get your perspective. ravine gandhi, and lara rhame, thank you for joining us for the hour. lara: have a great weekend. alix: uber and pinterest searching and premarket. it was not just the jobs number. more on how those stocks are trading and how to trade them. if you're jumping in your car, tune into bloomberg radio heard across the u.s. on sirius xm channel 119 and the bloomberg business app. this is bloomberg. ♪ alix: time for technically speaking. bill maloney, chartered market technician, voice of bloomberg equities quad joints me now. listen to bill on the bloomberg at squa . we talked about uber. walk me through the chart. bill: up 7% in the premarket. the stop bottom in november. the first resistance today will be back to the first day of trade, 41 to 45. all-time high of 47. the zone today is 41 to 45. alix: let's get to pinterest. pinterest, that is up 19% in the premarket. it wants to close this november 1 cap at 25. .ook for resistance at 50% the top of the range of 29. 27 to 29 are your key levels. alix: wrap it up with the overall s&p. you seem to have a little bit of selling. bill: we are down 10 points and premarket. we had this big bottom as stocks have surged this week. we want to look for today supporting at 33 34. yesterday's lows 3327 and 3314. alix: that does it for me at "bloomberg daybreak: americas." with jonathan ferro is up next. this is bloomberg. ♪ jonathan: from new york city for our audience worldwide. i'm jonathan ferro. "the countdown to the open" starts right now. ♪ jonathan: payrolls friday, jobs growth delivering a big upside surprise. president trump and president sheet reaffirming commitment to the phase one trade deal. recession risk lingering in europe. german industrial outlook plunging. here is your friday morning price action. equities lower. it is as if the payrolls report never happened. down .4%. the euros weaker. year, 1.60.n the 10 let's get you the big issue. the details on the payrolls report. let's catch up with michael mckee. good morning. michael: the market reaction may be telling you this is no longer about the fed. people will see the jobs reports from here through november and a lens of 2020 politics. if you're looking at it that way, a good start of the year for donald trump. 225,000 jobs created. the unemployment rate picks up

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