tv Bloomberg Surveillance Bloomberg November 8, 2018 4:00am-7:00am EST
francine: the u.s. attorney general resigns at the request of president trump. the rally rose on global stocks, following a strong session on wall street. investors approve of a divided washington. and it hundred 50 billion euro write-down on turkish assets. write-downion euro on turkish assets. hello everyone, welcome to "bloomberg surveillance." i am francine lacqua in london. these are your markets. we have futures in the u.s.
gaining. there is optimism in due to earnings with companies beating estimates due to the fact that the market is taking the opinion that for the moment if we have a divided government in the u.s. between the house and senate, not much damage can be done. the u.s. tenure yield 3.22. trading is and how higher after revenue came in line with expectations. 5.1% higher is what the share price is doing. we will speak to the cfo of commerzbank live from frankfurt at 10:30 a.m. u.k. time. sachs is promoting fewer employees to partner as the new ceo concentrates on the bank's core moneymaker. 69 staff are being elevated,
down from 84 in 2016. two thirds come from trading and investment banking. chinese export growth topped estimates in october as companies rushed to make shipments before higher tariffs kicked in. economistse ahead of forecasts for growth at 11.7%. imports surged more than expected by 20% over the year, shipments from the u.s. declined. the world's biggest import of crude oil received a record volumes last month, purchases by china rose during october. that is according to data from beijing. the global crude prices tumbling. opec signaled it could make it second you turn this year. 2019 output at a the meeting this weekend.
blamed for the u.k. housing market falling to its lowest level in six years. royal institution of chartered surveyors said index prices are down by uncertainty about the impending split. the report echoes similar warnings. the white house banned cnn after a acosta confrontation with the president after a follow-up. the president said, that is enough, and a white house aide tried to take the microphone from acosta. the white house accused acosta of putting his hands on the press aide. acosta calls that a lie. global news, 24 hours a day on air and at tic-toc on twitter, powered by 2700 journalists and analysts in more than 120 countries. i am taylor riggs. this is bloomberg. .rancine: thank you
attorney general jeff sessions has resigned at the request of president trump a day after the midterm elections. sessions has become a critic of recusing himself from the russia investigation. he will be replaced by matt whitaker and has the power to terminate the investigation. some of our guests had to say about the departure. leon panetta and former republican majority leader eric cantor. >> it is not much of a surprise, jeff sessions has been through a rough year, and it was expected at some point he would step down. i thought it would take a few more days, but it has not. second-in-command has been put in to be attorney general. >> this was a move that was anticipated.
president trump signaled that months ago that after the election jeff sessions would be resigning. i think we were not thinking of this the day after the election, it if we thought long about we would remember that was coming. there is a little different scenario in washington because with the ascension of the democrats taking control in the house, with that comes the power of the gavel in terms of setting the agenda. francine: for more on all of this, we are joined by stephanie baker who has been following the white house administration closely. what does this mean for the miller investigation -- the molar investigation? markere is a huge question over the molar investigation. -- mueller investigation. matthew whitaker will oversee the probe is that of rod rosenstein. he has said in the past that
mueller has overreached on issues including looking at trump's finances and links to russia. he has outlined in his public comments a scenario he is fulfilling which is that sessions has been fired, he is replaced by someone and can at the least curtail mueller's budget to make it toothless. power tos his circumvent or present mueller from moving ahead, denying him funds or stopping him from pursuing indictments, that is clear. what we do not know is if justice department lawyers will weigh in on that conflict of cannott, and say you oversee the russia investigation, you are conflicted. there are rules in place to
prevent anyone with a public bias from overseeing an investigation. secondly, he is acting attorney general, he can serve for 210 days until someone else's confirmed. havinge republicans greater control of the senate, it looks like we trump will get someone confirmed. the senate is more trumpian before the midterms, but there are question marks what will happen there. we do not know if mueller anticipated this and there are indictments in place. francine: the timing is surprising. the day we find out when them midterm elections are. quickly, manyd have said everyone was expecting this. i was not expecting it so quickly. thatows he wanted to have
element of surprise, and move quicker than people thought. you have to assume mueller would have anticipated this and taken steps in response. francine: thank you so much, stephanie baker. let's look at what the banks are doing. we have a little disappointing credit early on. commerzbank will be speaking to us later on. we will have plenty more on the banks, and from the leadership of the banks. this is bloomberg. ♪
francine: this is "bloomberg surveillance." let's get to the business flash with taylor riggs. >> five consecutive quarters of contraction. joining the european firm that are closing the gap with their wall street peers. trading revenue jumped by 19% last quarter beating estimates and performing at the top of the global investment banks that have reported so far. what we have seen this -- [indiscernible]
>> siemen's has put a positive spin on its outlook after making up for a loss with power operations. profit margints between 11% and 12% this financial year. the company plans to buy back 3 billion euros of shares. unicredit is lowering expectations for growth. an 850 million write-down on its stake. provisions included charges to settle allegations it violated economic sanctions against iran. italian lender lowered its forecast for revenue. tesla has appointed a new chairman of the board of
directors. that is after a run-in with securities regulator cost elon musk the position he had held. position will leave her role as cfo and had a strategy at australia telecom company. that is your bloomberg business flash. francine: thank you so much. after endorsing a republican dominated government two years ago, investors decided they also like a divided washington. balances work well for returns. trump's signature tax cuts with the possible of the that may have pushed up interest rates. the next thing the market is watching is today's fed decision. joining us now is richard turnill, global chief investment strategist, blackrock international. thank you for coming on.
it seems the markets are quiet. they are not nervous about what happened in the midterms. richard: the reaction to the youerms tells you that remove one area of uncertainty that was over markets previously, but when we look forward it is dangerous to extrapolate that short-term reaction. areas of risk and uncertainty ahead of us. there is the fed policy come my we are entering a period where real debate is starting to rise about what the path of the fed will be. if investors look forward to the g20 summit later this month, tensions,-china trade a recurring theme, will be the top of mind. francine: my chart of the day, is short-term but it is interesting after such a big election. this is the dollar and it
rebounded from a two week low. even the trade war and the fed half, where do you see the dollar? richard: the main drive of the dollar has been risk aversion. it is the barometer of market concerns around rising uncertainties. there is weakness after the election result because there is clarity of market concerns. when we look forward, we think uncertainty is likely to persist. we believe the fed will gradually raise interest rates in contrast of what we would like to see out of the ecb or the bank of japan. that suggests dollar strength in the future, but more modest dollar strength than we have seen this year, we are unlikely to get the market surprises that we saw in earlier 2018. francine: does that lead to a market correction? richard: what we are seeing right now, rather than bank a
correction, a persistent widening of risk premiums. the valuations are more attractive because earnings growth is holding up in the u.s. another strong earnings season in the u.s., overlooked by markets because of other events. markets are way down, so the risk rhenium rises. -- risk premium rises. it could persist for some time. francine: you look at some of our market blogs which you can find on the bloomberg terminal. whene trying to find out the funding squeezes impact the fed. richard: the fed will continue to raise interest rates as long as growth remains strong, and as long as we do not see negative impact on the economy from the gradual tightening of conditions , and they have tightened over the last few months, but not yet
to levels where we see an impact on the economy. anxietyeeing heightened about trade tensions in the markets, and we can see it in our own geopolitical risk indicators. we can see it to some extent on what companies are saying about 2019, and are nervous about 2019, but we are not seeing evidence of those trade tensions impacting growth. fed will raise rates in december, likely up to two more hikes over the next 12 months, but beyond that you have greater uncertainty. when we look at what is priced in for the first time we see risks for the downside of those expectations. francine: what is your concern about trade? that it escalates or where we are at now it hurts sentiment in an alreadyherefore
suppressed gdp? richard: the direct impact of tariffs is relatively small. even if we look at the scale, billion ofvels, $200 services, the impact of that on the u.s. and chinese economy are close to 1.1% of gdp, so the direct impact is small. we are looking at the indirect impact, at what level is confidence impacted question ? the chinese have said we are not seeing that come through yet, but it could be ahead of us. francine: richard turnill, global chief investment strategist, blackrock international stays with us. do not miss our coverage of the fed at 7:00 p.m. tonight u.k. time. we will break down the numbers. that is coming up next. this is bloomberg.
five consecutive quarters of contraction, and a 19% jump in revenue. commerzbank is trading higher even though the cfo says it will not meet the 2020 revenue target. ,oining us, richard turnill global chief investment strategist, blackrock international. thank you for sticking around. the chief executive unicredit said we need to cut revenue forecasts. >> that is one of the reasons, but he cited trading for 2018-2019, which is in a treating signal for the market -- which is an intriguing signal for the market. investment unicredit has in a turkish bank, they have been playing the credit cycle in turkey, and the geopolitical turmoil took a toll. francine: what did we find out now as opposed to last summer?
>> in the summer, in august, the management team signaled things were not so bad for their turkish operation. the news today caught investors by surprise. francine: talk about doing well in the equities market. equities and on overall they be there revenue target. , andrate lending was up their retail banking operation was up. the equities is the real story, consistent with what we saw barclays do in the third-quarter. they are flat in fixed income currency end commodities, which is in contrast to b.n.p. paribas which took a hard hit in the last quarter. francine: what about commerzbank? >>
medium-sized corporate in germany, tough markets make money, and because of the fragmentation and competition, and sure enough commerce bank for all its hope and energy, could not make up shortfalls. it had to cut its revenue forecast, but it did hedge on the retail side and added over 100,000 retail customers, so that was a silver lining. we are speaking to commerzbank in the next hour. is it difficult to lump the european banks in? richard: exposure within the sector, it faces huge structural headwinds. balance are aggregate and not where they need to be. growth in europe is weak and we see downside risk to growth going forward. the ecb has interest rates at negative levels at the short end. big challenges for banks to make money. the demand for lending is weak. you see that in the share prices. that is in sharp contrast to the
situation u.s. banks face, which is more favorable. francine: thank you so much, richard turnill, global chief investment strategist, blackrock international. up next, budget battle in less than an hour. exceed --icits could we will look at the euro. in the meantime, this is what we are seeing, stocks extending the rally after the midterm elections. we had strong corporate results giving an additional boost to european equities. we are looking at futures that will have a little bit of a softer open. this is bloomberg. ♪
bill gates says reinventing toilets could save over 500,000 lives by improving hygiene. more pain for the u.k. housing market. brexit taking the brunt of the blame. surgeds stocks have after jeff sessions resigned. .hinese exports toss estimates the white house has a suspended a cnn reporter. bloombergstraight to first word news. taylor: attorney general jeff sessions has resigned at the request of president trump after becoming a target of the president's open contempt. he will be temporarily succeeded by matt whitaker, who was a
critic of the molar investigation. -- mueller investigation. concentrates on moneymakers. 69 staff are being elevated down from 84 and 2016. fromthan half of them come trading. topped export growth estimates as companies rushed shipments. imports also surged more than expected, rising by 21% over the year. shipments from the u.s. declined it for a second month. of world's biggest importer crude oil received a record volumes last month. to 9.6es by china rose
barrels a day in october. the global crude prices tumbling towards the bear market. opec has signaled it could make a second production you turn this year. the cartel and its allies will discuss the 2019 cuts at the meeting this weekend. banned a cnnse has reporter after he had a confrontation with president trump at a press conference. he tried to follow up a question to the president with a second question. an aide tried to take the microphone from him. he is accused of putting his hands on the assistant. his press pass was suspended. he called that a lie. global news, 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalsits and analysts in more than 120 countries. i'm taylor riggs, this is bloomberg. francine: thank you so much.
the fighting inside is bringing talk of an early election. report, new eu forecasts will say that italy's exceed.get will how does it continue to affect market value estimates? richard is still with us. if you are bearish on europe, you don't like europe. richard: we see more opportunities outside of europe than within europe for investors. the european stock market faces a number of challenges. european growth has been weaker this year than the consensus expected. you can see it come down. our own indicators of growth suggest there is further to go. area ofthe only major
the world where we see downward risk. it is particularly acute in italy where we see downside growth. francine: structural concerns or a cyclical downturn? ofhard: the trend level growth and sustainable level is very low compared to history and other markets. investors have had to adjust what was already a tremendous year for growth last year, which was not going to be sustained. expectations have had to come down. some of the tailwind supported growth came down as of last year. now, you have the additional headwind of some political concerns. rising political concerns. environment where we believe investors should be focusing on long-term resilience, you get more resilience investing outside of europe than within europe.
there are still opportunities. of the marketeas which either have exposure to strong, sustainable growth or where you see stronger balance sheets. in terms of growth, that points to areas like industrials, which have exposure to rapidly growing markets, typically outside of europe. francine: emerging markets or just of the u.s.? richard: asia in particular, where we see growth holding up very well. chinese export numbers are strong, potentially impacted by terrorists. -- tariffs. the import numbers are surprisingly strong. you are starting to see investment pick up, followed by stimulus. many european companies are exporters to china. industrials, which benefit from the strong as we are seeing in emerging markets and the u.s. look attractive in
europe right now and typically have robust balance sheets. also health care when you see long-term secular trends, resilient to geopolitical risk, look attractive as well. francine: what about short-term bonds? two risky? if you look at two-year italian yields, good return if you can stock it. i think that is creating some opportunity to lengthen out along the curve. we have been cautious about taking too much risk in terms of looking at that peripheral spread. the reason for that is although you see spreads rising in countries like italy, when you look over the next few months are couple of years, the potential to a tesintensify further. we have seen a switch in global capital flows. those weretime, coming out, attracted by higher yields in the u.s.
the cost is so high to move to the u.s., that capital is typically staying in europe. european investors are keeping their money within europe. u.s. investors are starting to be attracted by some european bond yields on a hedge basis. when we look further out on the yield curve, we are to see more attractive opportunities, not just in governments, but some parts of credit. francine: thank you so much. plenty coming up including brexit briefing. theresa may has invited senior ministers to reach 95% of the withdrawal package. a key piece is missing. this is bloomberg. ♪
francine: welcome to our weekly brexit show. bulletin your brexit is taylor riggs. taylor: -- group is set to remove its finance market out of london. the decision was taken before the billion dollar a day business was taken over. it is the first example of a major financial markets leaving the u.k. in the run-up to brexit. adidas ceo says brexit is a bad business decision. china and north america
continues to be exceptionally strong. europe is sluggish and economy, impacted by brexit. it is probably the most unwise business decision taken for decades. taylor: brexit is being blamed it for a key gauge in the u.k. housing market falling to its lowest levels since before the financial crisis. it was its lowest in six years in october, weighted down by an certainty -- uncertainty. that is your brexit bulletin. francine: thank you so much. theresa has started briefing her cabinet on the text of the almost complete brexit deal. senior ministers have been invited to a private meeting room to examine 95% of the packets that has been agreed. ist is missing from the text the most contentious part of the deal, the guaranteed to keep freely flowing
across the irish border. first it to the markets. i don't even know what you trade on anymore. do you just to say i'm going to watch the burglar -- bloomberg brexit show, but chill out until december? richard: clearly, you are seeing market anxiety around brexit. the u.k. economy taking an impact from brexit for some time. has slowed as many corporate investors have chosen to defer investment decisions as have many consumers. international investors are taking the same approach. the u.k. market is trading at a discount. you're not going to see those flows coming back into the u.k., closing the discount until there is real clarity about what the
real relationship is going to be. francine: what is priced in? richard: expectations that a deal will get done. eventually, there will be a deal. the motivation on both sides is sufficiently high to achieve that. the concern of many investors is that in order to get that deal -- is required. within parliament and the u.k.. you are likely to see those concerns rise before they fall. for that reason, we remain quite cautiously positioned toward u.k. assets today. francine: john, do you agree with that? it feels like it is all about the irish border. john: i do agree. it is pretty clear because we have very asymmetric power here. the cost of no deal for the u.k. is much larger than the cost of no deal for the eu as a whole.
that asymmetric power has been shown throughout the process. the eu thinks because the u.k. has folded on all sorts of other issues, it is going to fold on the irish border as well. the latest idea is, let's try and saw for the irish border issue by having the potential for an all u.k. customs union, which would mean you wouldn't have to have a customs border in the irish sea and northern ireland remains in the single market. the problem with that for the parliamentary vote is a lot of hardline brexiteers hate the customs union. is it more likely that we go through a constitutional crisis because the deal the prime minister will come home with won't be approved by parliament? or will she only put something she is 95% will get approved to them? john: time will force her hand. she will have to put something to parliament.
the deadline is thought to be january 20. the big problem she faces is that she can try and soften everything and bring everybody together with some fudge, but the longer the. time betweend of striking the deal and having a parliamentary vote, the more likely people will scrutinize the deal and it might go wrong. markets, is the anything price and about fresh elections? richard: i think the market is placing a very low probability on fresh elections on the basis of a hard line behind the deal. the outcome of those elections today is uncertain. risk premium and u.k. assets are likely to remain high for some time. not only did we not know what the outcome of the brexit negotiations are going to be, we don't know what the economic impact of those conclusions are we don't knownd
whether that could potentially trigger a change in government. all of those uncertainties mean investors are going to wait on the sidelines. i think the pound remains weak and potentially gets weaker from here. sterling has been the key barometer for brexit risk over the last two years. have seen some rally in the pound lately as optimism has risen that we may be getting close to a deal. governmentsween the and the eu. again, our view is that as those tensions rise and the get closer to the january deadline for reaching a deal, sterling is likely to come under further pressure. francine: thank you both for joining us. john and richard stay with us. up next, we have from the chief executive of astrazeneca. that is coming up next. this is bloomberg.
francine: economics, finance, politics. this is "bloomberg surveillance." i'm francine lacqua here in london. let's get back to the earnings season. shares a nafta zen a cup or higher this morning -- in astrazeneca or higher this morning. the u.s. environment has always been very supportive of innovation. bitworld is a little benefiting from the investment the u.s. has been waiting to make in funding on cancer research for prices that are sufficient to justify investment. what we need to happen on a global basis is a readjustment of prices, maybe slightly higher in the u.s..
i think japanese prices are a good benchmark for what the right level should be. whether that can be done, i don't know and it is probably unlikely so we will see what happens. guy: are you increasing as a business or preparations for a no deal brexit? pascal: we have been. because we are so invested in the u.k., we have a big presence. because cambridge is a great place to do sales, probably one of the best places in the world. we are very committed there and have continued building and investing and attracting people. we haven't found any complications, any difficulties. the second part is manufacturing. it is more complicated. the things we have had to do related to the release of our
goods, when the goods and products leave the factory, you have to certify that they are of the right quality. says you have to test them in european standards. we have had to duplicate all of those in sweden. products as a manufacturer in the u.k. will have to be manufactured in sweden. we have invested quite a lot amount of money over the last year and a half or so duplicating those. the second thing we have done is to prepare for the movement of goods across the border. now, at the border, there will be controls. the process may be slow because it is a new process. we have increased our stock. our priority is patients should not miss their medicines. francine: that with the chief executive slicking -- speaking to guy johnson. overall, we were talking about
this in the break, earnings are a blowout, but the market is not pricing it in. it hasrd -- richard: been a tremendous market season for u.s. growth. 27% year on year. tax cuts have helped, but if you look at sales, their up almost 9% year on year. it is not just the u.s. story, it is a global story. they are concerned about what is quick to be the impact of trade on future earnings. what is going to be the impact of rising interest rates and rising wage growth. you have a very strong tailwind from current earnings, but markets have been reluctant to price that in. francine: do you worry about what the fed rate hikes will mean for the u.s.? the chief executive of goldman sachs said he is worried about overheating and the u.s.
risks to theof the u.s. economy is that growth remains strong. data, we see sustained, strong growth. we are not seeing any significant pass-through to inflation. that gives us confidence you're going to see a gradual increase from your. francine: what is the biggest risk to the market? richard: u.s. trade tensions escalating and overheating risk. what it means is that you have got to focus on portfolio resistance -- resilience. 2020,k forward to 2019 at you have to have less confidence in the sustainability of wage growth. focus on where you have the greatest confidence the earnings will be sustained and companies with the strongest balance sheets and tailwinds. two areas that look attractive right now, geographically, the
u.s., some of the highest quality companies in the world. quality, companies with robust balance sheets, companies that can generate sustained growth and cash flow overtime. the valuations have come down significantly this year as concerns have risen. for long-term investors, this is a good time to be investing in those areas. francine: 2020 could be the end of a cyclical downturn in the u.s. richard: that is exactly why investors should be concentrating on portfolios. it is a european and global story as well as u.s. we look at our own indicators. we don't see any significant financial stress in the system which points to a recession at this stage, but we have to recognize and certainties increasing --. uncertainties increasing. you don't hide in cash.
you have to be selective. to us, this is focusing on u.s. equities. those assets will provide returns, more attractive than you can get elsewhere. francine: thank you so much for joining us. we continue in the next hour. tom keene joins me out of new york. we will be talking to the commerzbank chief executive officer. we will also ask him about speculations over m&a and the banking sector. this is bloomberg. ♪
president trump. the rally rolls on. global stocks rise of following a strong session on wall street. good morning, good afternoon to you if you are in asia. this is "bloomberg surveillance." i'm francine lacqua in london, tom keene in new york. breaking we ignore news out of the eu commission. today, it gives us a vision of what they see italy doing. the eu now saying they are mounting italian risks. this is all about the budget law and deficit. they say that 2020 italian budget deficit will breach the limit. tom: is going to be very important to see. i see the 3% limit and i think
about the establishment of these new roles in europe. there is no question about it, italy is breaking the ecb rules of over a decade ago. francine: it is. a lot of people saying they just need roleroom to grow. others saying the budget doesn't make sense because it is not helping to grow. there are various layers to this. let's get to bloomberg first word news in new york city with taylor riggs. taylor: a critic of the russia investigation is now supervising it. president trump made justice department chief staff matt whitaker to be acting attorney general. he is a temporary replacement for jeff sessions who resigned at the president's request. he frequently criticized the sessions for recruiting -- recusing himself from the russia investigation. at the postelection news
conference, the president indicated it could include an increase in corporate taxes. democrats criticized last year's tax bill for not doing enough to help middle income americans. in china, companies rushing to make shipments before tariffs kicked in. exports to the u.s. rose by 13%. chinese imports to america shrank by almost 2%. in thousand oaks, california, a man entered a country-western bar, opened fire and threw smoke bombs. at least 11 people were wounded. there are an unknown number of fatalities. the government has not yet been caught. thousand oaks is about 30 miles from downtown los angeles. global news, 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalsits and analysts in more than 120 countries. riggs, this is bloomberg. tom: thank you so much. interesting post election
markets yesterday. futures at -13. let's go to the next screen. showing bullion markets. bond,d note the 30 year 3.42% is a lower yield. that should be read into basis points. points.basis francine: my screen is very similar to yours. stocks in europe extending the rally built in the wake of the midterm elections. we also have pretty strong corporate results, giving an additional boost to u.s. equities. the uptick may be short-lived because i'm looking at futures and there are pointing to a softer opening in the u.s. tom: let's position where the markets are right now. here, up to look
the record highs of late september as well. down we go, the 25,000 mark, we come up. i would note this gap jump. usually, gaps get filled, but there it is above 26,000. francine: i'm going back to what the midterms mean for the markets. it is a very simple chart, it is a short-term chart. we need to look at it longer-term. i may do the same one into-three months.- in 2-3 markets still try to figure out what the divide is. there are many articles this morning on our travels back from singapore. some of them have been on the election. the new york times in the left column today, northeast of vote is a wipeout for the republican party. all of that was pushed aside yesterday afternoon in an
extraordinary press conference by the president and action of the removal, resignation, firing perhaps of his attorney general. this morning, three attorney general's weigh-in. these are republican attorney general's. 2017, the justice department prosecuted the highest number of violent offenders since time began. departmente processed the most firearm to defendants. bad, he has and acted always out of concern not for his personal legacy, but rather for the legacy of the justice department and role of law. to assist our global audience .his morning, kevin cirilli, in washington let me start with a cocktail conversation with, it's a constitutional crisis. is it?
kevin: no. i think the president had forecasted this for months. graham senator lindsey saying there would be an opportunity for there to be confirmation proceedings for the replacement of the attorney general. the senate judiciary committee have been meeting with some republicans who were rumored to be the replacement for the attorney general for quite some time. tom: all of the things we're going to talk about this morning , the one thing is the idea of we have had a silent mueller. maybe he would be more verbal. inl we see him speak or act the next 24 hours or 48 hours? kevin:. no i think you're not going to hear from him or his investigation team until they release the report.
they were very cautious about releasing any type of report ahead of the midterm elections. over,at the midterms are they still haven't really said when they are going to release the findings of the report. most assessments are that they are nearing their conclusion. francine: good morning from london. who are the checks and balances in this? is there a conflict of interest? which there could be, if someone fiddles with them mueller investigation, who would step in and say this is not ok? kevin: congress. you have whitaker serving as the acting attorney general, but some reveling's already about who will the president name to a appoint. they will have to go through confirmation proceedings. the democrats are going to ask, what is your redline? if the president wants you to fire the deputy attorney
general, wesley to happen if you moved to fire bob mueller, all of that is where to be aired during the public confirmation hearing. the on the investigation, the attorney general does have other and other -- clout responsibilities and jobs. look no further than the marijuana market. you saw some movement on this yesterday with regards to how the president or attorney general and department of justice are going to regulate marijuana. they also play a role in the immigration issue here in the u.s. as well. tom: so much of this will be the of what is in the justice department. surprise.t much of a jeff sessions has been through a pretty rough year. it was expected that at some point, he would step down.
i thought it would take a few more days, but it hasn't. he is gone today. obviously, his second-in-command has been put into being attorney general. tom: of all of this, again, for our global audience, it gets a little complicated. we are to focus on a name many of you know, mr. rosenstein. what does he do today? kevin: he is going to try to figure out who is going to replace the attorney general jeff sessions. what i can tell you is that yesterday, there was a moment during the president's marathon press conference where he said if democrats want to play the game of investigations, i can play it better. congressman darrell issa, who announced his retirement, the republican from california, one of the faces of the prosecution against hillary clinton in terms of when she was secretary of state on the benghazi proceedings and whatnot, i can
tell you he is waiting in the wings to really go after hillary clinton again or other democrats if the opportunity were to present itself. he is rumored to be a replacement. francine: thank you so much. i'm alsoantime, looking at some banks here in europe. the ceo had to take a surprising $900 million charge. 2.8%.dit down some we're going to speak with the chief financial officer of commerzbank a little bit later on. gainingsee share prices 4.7%. this is bloomberg. ♪
taylor: this is "bloomberg surveillance." there is a new chairman at tesla. the electric carmaker has named one of its directors to replace elon musk. he had to give up that position after running with securities regulators. siemens has raised its dividends and put a positive spin on 2019. europe's largest engineering company posted gains. that helped offset a lot of the power and gas operations. we spoke to the ceo. >> you ought to talk to our customers. that makes us feel quite comfortable that we can continue with credit sector story.
you might have seen that our new --dership is together with and is going to a positive turning point. we have actually been able to compensate for the massive slowdown of the business, which is hard to find. taylor: that is your bloomberg business flash. francine: thank you so much. after endorsing a republican dominated government two years ago, investors decided they like a divided washington for now. stocks in europe and asia a strong session and the u.s. the next thing the market is watching out for his today's fed decision.
thank you both for joining us. are the markets really sure this is such a good thing? kit: i don't the markets are sure of anything. thing andure of one sure of something else comes the opposite the next day. we are all following the equity market. it has been an increasingly good dealsince hopes of a between china and the united states on trade were reached a week ago. take the dropid in bond yields pretty well. the problem for them is that we stuck another six basis points on the long bond after the rally in the s&p. we will see how that feels. francine: what does it mean for dollar? we're not going to get more or have a lot of fiscal spending either. mark: you have to think about
short-term, if you could even go beyond into the medium-term. there is a belief rally coming through global equities. the element here is that there is some convergence play. -- catch up to the u.s. it is generally not that great for the dollar. some of the major european currencies because you are getting relief on some of the tensions that have come through on the political side. starley looks very attractive. euro is trading where it should. our bias is that it should be at the higher end of the range. the backed up for me is, it is good for dollar-yen to test some of the recent ties. those are levels we like to fade. in general, this is a medium-term, negative for the dollar because the delta of growth in the u.s. is going to year.onsiderably next the markets are kind of over positioned for the u.s. dollar to continue rallying into next
year. tom: i love your phrase "the hawkish policy parade." a lot of people are betting that the parade will begin to end or end abruptly. is that begin this afternoon? the concept of it is really about the rest of the world. we try to look at a diffusion impact. over the last six months, how many central banks have hiked rates? what we see on the outlook is that we now see, over the last six months, 50% of that sample has hiked rates. the market is kind of debating, do they go another 25 basis points? the bigger story is, the dollar reflects that. what is so interesting about this is the numerous dollar clause. let's get your view on strong dollar. and a david blame is look at very strong dollar.
looking at very strong dollar. kit: not necessarily weaker in a straight line from here. bearishple were pretty this time last year. we were very collectively early on that trade. as a result, very long. the only thing that is change is that now the market is pretty long. messy, it is good to be difficult, awkward to trade between now and christmas. the bond market will, in due course give us another selloff and emerging-market currencies. dollaronger euro, weaker trade is definitely the second half of 2019 story. it might get going a little bit earlier than that, but i am very wary of being too early. francine: idisk about from
singapore where we talk to the ceo of goldman sachs who is worried about the u.s. economy overheating. what are the chances? mark: i think what you are getting is any kind of overheating you get, the fed is going to try to slap it down a little bit. our expectation is that the fed goes about neutral. the fed is pushing against asset prices are financial conditions in the language of what the conditions impact is. our view is that whatever overheating you get is going to be pushed down by the fed. the other side of it is that you don't get a lot of overheating. what you are seeing is the yield curve start to flatten out again. most of the expectations coming out is more of a risk premium as opposed to growth expectations which, to us are starting to peak now. tom: we thank you for watching and listening today.
francine: this is "bloomberg surveillance." this is what your markets are doing. we are really keeping an eye on a lot of the stoxx and earnings that we are watching out for. the ftse move is the italian one. saying it will reach -- by 2020. let's get back to the frustration between italy and brussels. jukesccormick and kit are both here. do you worry about italy? startedrobably first worrying about italy in 1990. a debt to gdp level is much less scary when interest rates don't peek at 6%.
the world is at least that different now. i worry about italy because there is a chronic lack of growth. to be fair, none of the italian government's current plans or the response from the eu commission does anything to tackle long-term growth potential, which is the only thing that needs to be focused on. francine: what does it mean for euro? as it a concern of italy or germany, angela merkel not being chancellor in two years? mark: i think it is both plus a global factor. last year, the euro did not care about global growth dynamics. italy was basically aside to last year. the big issue now is, is the tenure bund? the tenure bund has declined as well. the focus is on, how much
premium is there coming from italy? there is a lot of stress coming through the eurozone system and political issues.that dynamic should come through euro swiss. it has been gradually moving higher as these issues have been flaring up. at the same time, euro dollars used to be a function more of what is happening on the dollar side. francine: we will talk more about that coming up. with wim mie speak js. we will talk to him about regulation and supervision. this is bloomberg. ♪
bill gates says reinventing 12 could save over 500,000 lives. we are paying for the u.k. housing market. exit taking the brunt of the blame and our stories on the bloomberg terminal at third place, cannabis stocks have surged. jeff sessions resigned. and the whites house has suspended the press pass of a cnn reporter. withwe continue the story attorney general jeff sessions. we will follow stephanie baker, hours the near -- our senior writer, not about manafort, not about money laundering but the constitutional nature of our justice department. let's begin with civics 101.
why is the justice department different from every other cabinet office? -- why they were removed are they removed from the white house? have beeneasures reinforced since watergate, that you have an independent attorney general whose job is to enforce the rule of law and the constitution. the president has the authority to fire his attorney general but in the situation we are in now it is clear he has fired jeff sessions because he was annoyed he had recused himself from the rush investigation. this looks like cam trying to intervene in what is supposed to be a special counsel investigation. i nice overview in the new york times on the future of the
assistant attorney general, mr. rosenstein will many suggest should be the one in the job of mr. whitaker, who is a senior careerist under the arcane language of washington. what would you suggest mr. rosenstein will do in the four hours? next 24 hours? stephanie: will he stay out of a sense of duty he can be there to have input in the mueller investigation? let's step back. the justice department said whitaker will oversee the rush investigation. what we do not know is what justice department ethics lawyers will say about whether he is biased or has a conflict of interest and cannot oversee the mueller investigation. he said in the past, whitaker byt mueller has gone too far
examining the trump organization finances and ties to russia and outlined the scenario, which could happen here which is where jeff sessions steps down. trump appoints a new attorney general and that person curtails the mueller investigation. francine: what do these lawyers -- what can these lawyers say it is unethical? for him to get involved with a conflict of interest? stephanie: it has been tradition you follow what the justice department ethics advisers tell you to do, which is what jeff sessions did. sessions did not do that immediately. it was through pressure from the media he ended up calling him out on meetings with russians he had not disclosed that led him to follow ethics rules. there are rules in place that would prevent overseeing an
investigation if they have a publicly documented perceived bias. how that plays out remains to be seen. whitaker is there on a temporary basis. he is therefore 210 days until trump is able to get a new attorney general. tom: this is the heart of the matter. you and i became experts on the federal vacancy act last night. we were up until 2:00 a.m. reading a 60 page document. what damage can mr. whitaker do in 210 days? stephanie: i would say a lot but i think mueller would have anticipated this happening -- would have taken steps to protect the investigation as i would expect rod rosenstein would. the question is are there in die in's better -- indictments that are under seal now? has he kept them under seal
waiting for this moment to happen? ability to curtail those is limited. tom: thank you. and now, with our first world news, taylor raikes. abigail: -- into a a man walked crowded bar and through in a smoke grenades. 11 people are wounded. a spokesman says the gunman was found dead in the bar. 40 milesing took place from downtown los angeles. a longtime critic of the rush of investigation has the power to fire rubber mueller. president trump named whitaker to be acting attorney general. he replaces jeff sessions. the president criticized sessions for recusing himself drum the mueller investigation. democrats will use their new
majority to seek deals with president trump on infrastructure spending and description drug spending. nancy pelosi says there will be no backing down to the white house. the democrats will have to come up with goals that liberal and moderate members can support. opec is considering another u-turn. the cartel will consider cutting oil output. saudi arabia and other producers boosted production after political pressure from president trump. a surge in oil output hurt prices. opec will discuss the changing course this weekend. global news 24 hours a day, on-air at tictoc on twitter, powered by more than 2700 journalists and analysts, in over 120 countries. i am taylor raikes. this is bloomberg. thank you. let's talk european banks. someone toinated
become the second head of its supervisory arm. the appointment has to be approved that he was head of the banking authority for eight years. he has weight into major debates for breakfast -- so what is next? what is the next challenge for european banks and what will they face as challenges? now from lisbon, thank you for joining us. what do you worry about most? is it breaks it and the planning banks have put in place? >> worrying about rex it is one of the things banks worry about. he is indeed a veteran and a good choice for european banking, for the union. having said that, on bags it many banks have taken as you
have reported the past, in -- what we do now is hold the banks working on a contingency plans. we will represent certifiable banks through europe. we talked a public authorities because we feel -- effects need to be avoided. they work on contingency plans as they should be but we tried to alert them if we find issues that have been resolved. we are getting prepared and waiting for the politics -- politicians to make choices. francine: you have been speaking to banks. where are we in the planning process with banks? will they have the correct licenses in time to be able to operate in the you -- in the e.u.? answer.is not easy to there are a number of things.
you can be sure all the banks in europe have been working on this for a year to get the right licenses. they have been granted some delay and what is important is the bank of england and supervisor of the ecb work closely to ensure there is no disruption and these licenses are rented at the right time. have less of that an impact are also working. all of global wall street is waiting for e.u. bank consolidation. when do we see it? be that i should without my crystals of dust ball -- crystal ball and look into it. the false regulatory ticket is now in place. banks know what they are up against.
that single supervisor will be succeeded for european consolation. -- consolidation. when the time is right, it will happen. bank leaders internalize so much. i have no doubt in the coming years it will happen. francine: do you think the leader will push for risksharing? record,ook at his track he was one of the people in favor of mechanisms like the joint protection scheme. i did not get the last question. please repeat that. francine: of course. i was going to ask if you think you will be in favor of risksharing solutions amongst member countries in the euro area? the risk reduction is debated in the trial log between
european institutions and the question is when risk reductions are burden sharing, and you see this debate is moving on. and as ay political veteran supervisor, he will react to the political agenda. first this needs to be solved. tom: very good. really appreciate it. there is breaking news. a transportation company in canada having challenges. are going toees walk out the door. that is a rough number. we have seen that from a lot of industries. ,here will be more on that particularly across bloomberg canada this morning. a timely interview on european
taylor: after a new cancer drug helps estimates in the last quarter, the british company is moving away from older products that are losing their passing protection. tells bloomberg is rethinking u.s. pricing policy. >> what we need to have done on global data is a readjustment of prices, lower prices in the u.s.
japanese prices are a good benchmark of what why cover should be. whether that can be done i do not know. taylor: that is your business flash. francine: thanks. tesla has appointed -- two replace one mosque. an end of an era to mosque's 14 year reign -- 11 must's -- elon musk's 14 year reign. alex webb now joins us. you know tesla like no one else. what do we know? tesla, she does have experience. she should be an executive director for two years.
networkly she was at a and toyota. she is not an operations person. she is an accountant by trade. experience on the the operational side of the car industry, that has come to fruition. possibly this is something on that level. francine: what is her job? is it to keep things in order as a car company? or is it trying to keep the chief executive of mine? -- in-line? keeping elon musk in mine. he is someone who has been good at getting a good quality product developed, but the manufacturing side of things seems to be a weakness. they have scraped through on meeting that reduction goal.
they have got to meet the production goals in the years to come. they have a whole series because they promised needs to be put into production. it is going to be hard to make sure he does not carry away -- get carried away with side projects. tom: thank you. greatly appreciate it. a new chairman may be a new tesla. migrate to the great debate i alluded to before, which is dollar and strength. what is the core dynamic of any currency pair's is at the dollar strength or the other guy? >> it is as much dollar strength as anything else. if you look at the moves we have seen recently, eurodollar low is the same as the dollar u.n..
i can find domestic reasons for each of those terms. you had weakness. the common factor is the dollar. the common driver is the fiscal easing may boost the budget deficit overtime but for now, it andiving tenure note yields that sucked money into the united states. it is the dollar world today. tom: one of the pixie dust items of kit jukes is he gives you an opportunity to think. -- wherethe currency can i get gain now? i needed now. -- need it now. kit: we are in an opportunity to take advantage of the next bank to send more hawkish. the swedish crime or has been a heartbreaking currency for
traders. finally finding its mojo as the bank ranks whether it is going to raise rates and sounds comfortable about the world. it looks like something that has got lakes now -- legs now. the rising bond yields are going to give opportunities to get short of the australian dollar and new zealand dollar and anything else that is a proxy for the chinese u.n. because those tensions are going to come back 30 seconds after the meetings in rio dinero. that is not today. tom: that is not today's trade. for francine, may be next tuesday. with us to looking what he does always, bloomberg will have complete coverage. we complete coverage on a that special. this is an interesting lineup.
tom: good morning. from london, from new york all eyes are on german banking in any conversation with deutsche bank is important. our germany bureau chief with the chief financial officer,chen? i am here. thank you for joining us. shares to good job this morning off the strength of the third-quarter results as you added retail customers. what can we expect going into the fourth quarter and into 2019? >> the third quarter and the first nine months of this year if you compare it to the previous year are growing with customers.
i am competitive. , it i expect going forward expected the competitive environment will stay and we deal with low interest rates for a wild. outlook on change so i think you will see something that is boring as you will three. things are doing well on the retail front. the corporate side is difficult. >> the corporate side and there you need to dissect the segmental results -- clearly we are growing on volumes. diminished or eaten up by the margin pressure we have, especially in germany. i expect that to improve once the ecb stops its buying program
, which is announced for the end of the year. we have financial institutions which we have substantially reworked correspondence and have set up a strict set of which has and credit its cost in terms of revenue but if i look around in germany and the rest of europe, is paying off. on top of that, we have pnc. we have enough. we have seen a slower business also in 2018 along with the market. if we focused on the core betters, we have volumes, more customers and that should form a solid basis for performers in 2019. >> you mentioned a sale and where the business has not been as good. had you think that will positively impact earnings? stephan: the strategic view is
the business is profitable. but it is difficult -- disconnected to our core businesses and we want to move equity that is bound and also further investment needs other stuff. it is something we would rather invest in. that is why we took the decision to -- 2019usiness will move in and our couple be to decommission the cost base. >> with pressure on margins, what are you doing to keep down costs? 2017 andwe have seen 2018 with substantial , which has been a prerequisite to run down cost in sde as well as operational cost.
lot andbeen achieving a the prerequisite is backend loaded. our 6.5 billion by 2020. >> you said you expect to be below your 2020 revenue target. can you give us labor on where you are going to land? the business from 2016 of 9.8 billion, if we look at where we are today we see a low interest rate and why we have discussions around europe, brags fits well as the desperate as well as the political situation. we have seen the goddesses are on corporate in europe going back -- guidance around corporate in europe. we had the impression we will not be able to achieve the 9.8.
a would be below that but recurring consensus number is 9.2. >> one of the discussions in germany putting pressure on the industry is they are shifting to so many banks in this country. what is your view on college sedation -- consolidation? mende is something of value. it is clear not -- let not only germany but -- is over bank. consolidation makes sense. it is something that will ever has to happen. the question is when. not too much happened. it seems the right opportunity, the window has been opened so far. >> do think it is likely we will see small transactions?
you have been involved in small sales or purchases as opposed to something big and transformative although there has been discussion about that? stephan: the one thing we will divide is -- will it be national conservation? the regulatory text and other burdens is higher than national consolidation. my uneducated guess now is it is one of the two events that is the easier one. we need to wait until something tangible happens. >> one of the banks everyone is talking about is just because they're looking for investors. i do not want to speculate and comment on market speculation on this topic. >> thank you for joining us. you can expect this discussion
will continue in germany and industry. francine: it certainly will. some speculation about that bank and possible mergers and acquisitions. this is bloomberg. ♪ ♪ , the midtermsing are over. bid, yes,gridlocked maybe a constitutional crisis in washington this morning. european banks are not like american banks, profit elusive. , and insider as chairman.
good morning. this is "bloomberg surveillance." we are live in new york. i am tom keene. well with usua as today just off the boat from singapore. that airplaneon back. what wish or take away from the bloomberg new economy forum? francine: it was all about trade wars. i was surprised that 68% said trade war. only 22% said a slowdown in economics. if you look at the fundamentals in europe, there are concerns politics will start hurting the economy. , i have last few days seen the change in the usage of this phrase trade war. what ever the views on the u.s. , a trade war.
let's look at first word news. taylor: a critic of the russian investigation is supervising it. actingitaker is attorney general and charge of the probe, the temporary replacement for jeff sessions, who resigned at the president's request. trump criticize sessions for recusing himself from the russian investigation. president trump will consider raising some rates to pay for a tax cut for the middle class. indicated that could include an increase in corporate taxes. democrats criticized last year's tax bill for not doing enough to help middle income americans. in china, companies rushed to make shipments before terrorists kicked in, boosting export growth.
13%, but imports america shrank by almost 2%. global news 24 hours a day on air and on tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. tom: thanks so much. , the feeling of yesterday, equities, bonds, currencies, commodities, euro -dollar churning. oil is something worth watching. we are not there yet. the euro at 16.2. october is ancient history. 3.44%, priceond, lower, yield higher yesterday. francine: european stocks were higher. they aren't now more subdued. puttingcks seem to be
an end to this global rally that spread across asia. futures down. yields up, but retreating from the highest level since 2011. tom: our fed coverage today at 2:00 p.m. with credit suisse. october was ugly. from 27,000, well under 25,000. i would notice on a technical gapis, i am looking at a jump up. we will see if it is filled. francine: dollars steady. it is before the fomc. it as the dollar swings over the last couple of days. i should overlay the swedish krona.
it has led gains on the outlook for policy. tom: very good. we are staying up-to-date on another shooting in america, thousand oaks, the story ongoing. the headline is the tragedy of 11 dead. let's be direct, more than a monthly occurrence, and now outside los angeles. decidedly, as taylor riggs has mentioned, an ongoing moment. ongoing as well is what we see in washington. the midterm elections, the excitement of democracy. as presumed come out we go with a cabinet, and yesterday was a clumsy afternoon for the president. it was a resignation, but it was not. kevin cirilli provides perspective this morning.
. could be snide here there is no comedy. the attorney general is fired. kevin: he was forced out. tom: what is the difference? come on. happenwhat exactly will with whomever the president chooses to nominate? what will that person or individual say before the senate confirmation proceedings? they will be asked if they will move or except the firing of rob rosenstein. readings, imany thought this was great. these are ethic experts. writing in the new york times. this is a few years ago.
there are no watergate parallels, are there? one, it wasr forecast for months. number two, there was a moment yesterday where the president said if democrats want to investigate and not legislate, he can play that game better than him. he could not play it with the attorney general because he recused himself. that was the basis of the political deterioration of this relationship. stalwartions, a conservative from the deep south
before joining the administration. the attorney general has a purview over other issues, the marijuana industry to immigration. he has not crafted a legacy beyond recusing himself from the russian investigation. francine: when you look at the timing, this was expected, but the timing, what does it mean about the president's state of mind? does he feel emboldened? he feels emboldened by the midterms. i don't want to use the word embolden. his assessment is it could have been worse. regards to that with the timing, get ready, buckle up , musical chairs time. that revolving door, don't let it hit anyone on the way out. is a morning must
read. him to weighhing in here. kevin, this is fascinating. what a difference between matthew whitaker, private guy on cnn trying to move his career forward versus a public official. kevin: correct. that is one particular avenue to watch. robert mueller's investigative team said they did not want to
release anything because they did not want to impact the midterm elections. so now when precisely will it come? will they wait until the lame-duck, which we are in, or will they wait for the democratic controlled congress. nothing is guaranteed down there. a lot of folks are waiting to see whether this investigation -- tom: does your news flow slow down tomorrow? kevin: absolutely not. it is friday. tom: kevin cirilli is our chief washington correspondent. this guy i like a lot, and immigrant from lebanon. , big supporter of the president, then he has been a little disappointed. the 7:00 hour. this is bloomberg. ♪
>> this is bloomberg surveillance. there is a new chairman at tesla. one of its directors has replaced elon musk. elon musk had to give up the position. she will leave her job at telstra. job cuts on the way at a plane maker after posting third-quarter revenue that missed estimates. it will cut jobs over the next 12 to 18 months, 9% of its workforce. that is your bloomberg business flash. our we are thrilled to have next guest with us.
lee ofington, william the milken institute. lee, let me start with you on the fed. what is your fed call? there is a gap between morgan stanley and goldman sachs. the other idea is four or five rate hikes, which is it? >> everyone is getting confused between financial conditions and rate hikes. financial conditions are what influence the economy. the fed is interested in slowing down the economy. i don't think we will get beyond two moves next year. the strong dollar has added to the monetary strength. let's get the reality of what do we do in the market. february was extraordinary come unique --, unique.
then we get this bounce. ?re you fully invested can you do that? >> i would use this bounce and seasonal bullishness to reduce risk. that jerome powell is hamstrung in what he can do because of the dollar, the ball is in the ecb's court. it should be closer to 2.5% to 3%. francine: when you look at the fed and the concerns around the of, the chief executive goldman sachs in singapore is worried about overheating. are you worried about an overheating of the u.s. economy? the fiscal stimulus is scheduled to slow down. the tightening is about to take hold. i think the fed is on cruise
control now knowing their forecast will slow. the question is how fast it will slow. there is more downside risks been upside risks now. francine: at what point does the squeeze in funding rates impact policy? >> the funding rates are quite low now. spreads are historically low. a lot of private equity is financing corporate investment. there are 7000 firms under private equity ownership. publicly listed firms are 3000. there is funding coming in that the fed is keeping an eye on. tom: i get the caution you have. some of that caution is based on nominal gdp, animal spirit that, andn, and all yet can't corporations adjust to the new reality and maintain margin and cash for share buybacks?
think corporations have done a great job adjusting to ongoing uncertainties with respect to the global supply chain and everything else. where i see the issue is from an investor point of view, this macro environment where you historically have this war between risky assets, equities, and bonds. for the last 10 years, bonds have been in this tug-of-war with one arm tied behind its back. eventually that will normalize and we see assets move back. tom: this is what we do on surveillance. two decided views on the fed meeting this afternoon. it is a dead meeting. i will be dead by 2:00 p.m. will be alive.
she will step down from the head in december. she remains chancellor, but that could weaken her position. angela merkel saying in helsinki the military and germany will get a boost in a revised spending plan, but is urging eu nations to have a more common sayingn foreign policy, the european union is a freedom guarantee. they are now embracing for more intense talks with president trump. tom: we will see. one of the great joys of any high-level conference is you never know what to expect. francine lacqua and erik schatzker saw that at the bloomberg new economy forum in singapore. the message is the same i heard in new york, the trade war is upon us.
chicago.n bill lee would not be a soybean if it hit him over the head. , what is a trade war and why are we finally in one? >> everyone is getting serious because the retaliation is there . trump is adamant about not giving in. china is not giving in. the uncertainty is about how this will result. where do we go to get the real issues on the table? propertyntellectual and market access onto the table? tom: intellectual property is an intangible idea. the fancy suits and ties with the fancy degrees go international relations on me. a pile of soybeans is a pile of soybeans, and that gets
politicians going. when do we get to that point? >> we are at that point. china is not the only customer. there are only so many soybeans. the customers buying from south america are buying from us. there is a limited supply. equilibrated, we shift. so soybean farmers are ok. they have to find new customers. the real issue is getting the new trade order in place and getting rid of the trade order from world war ii. this is different. bill lee is on the east coast. it is all esoterica. america,now middle midwestern states, are supporting the president, although midwest states did have slippage under trump with
governors. areas arege the rural still trump -- tom: if we get a further price the client and soybeans, that is tangible? >> they are not looking for handouts. they want trade. looking at it from china's perspective, they are trying to delever. part of my thinking is he can use the trump trade war as an excuse if we see slowdown in china. is cheaperthe yuan and they are offsetting some of it that way. our most recent gdp, exports are down a lot. we will get back to that in a second. we are running out of time.
remember, bloomberg users can interact with the charts using gtv . we will get back to that conversation. we have been trying to figure out how you measure a trade war that escalates. the public consensus is renminbi . we have a chart for that. go to gtv . you can use it. you can write in your questions. this is bloomberg. ♪ [ phone rings ] what?!
ready for christmas? no, it's way too early to be annoyed by christmas. you just need some holiday spirit! that's it! this feud just went mobile. with xfinity xfi you get the best wifi experience at home. and with xfinity mobile, you get the best wireless coverage for your phone. ...you're about to find out! you don't even know where i live... hello!
tensions would ease to an escalating trade war. let's get back to our guests. , is itn the markets renminbi for something else? >> i look at renminbi. there may be other currencies reacting that i haven't tracked, but that would be my go to currency. it has responded accordingly. it is a lot weaker. offset, buteresting that could be one way to play it. u.s. small caps were working that way. i think they will continue to work that way. it is another asset class to play as well. francine: bill, what about you? sevenis a great chart on as the psychological level. the pboc does not be concerned
-- does not appear concerned about the renminbi weakness. >> the flipside is looking at where is the dollar. the dollar has gone up 8.5%. it goes back to that saying that people rush to safe havens when there is uncertainty, and the uncertainty caused by trade wars is causing investors to rush to the dollar. tom: the esteemed william klein at the peterson institute would always speak about compensating factors. .t is not just dollar-renminbi it is yuan-singapore dollar. yen-renminbi, etc.. these pairs work in correlation with dollar-renminbi. how will this affect the path? >> it is something that concerns all discussions, especially policy. that as aoks at
gauge. that is equivalent to almost one percentage point of rate hikes. tom: bill lee with us this morning. thousand oak's, california is the fourth safest location in the country, according to the fbi. here is taylor riggs. taylor: a hooded gunmen opened fire in a bar last night. police say he killed 12 people, including a sheriff's deputy responding to the attack. wounded. were the gunman was found dead inside. the shooting took place in thousand oaks, 40 miles from downtown los angeles. hundreds of young people were there for college night. a longtime critic of the russian investigation now has the power to fire robert
mueller. matt whitaker will supervise the robert mueller probe. replaces jeff sessions, who resigned at the president's request. the president criticized sessions for recusing himself from the mueller investigation. democrats in the house will use the majority to seek deals on infrastructure spending, and prescription drug pricing. nancy says there will be no backing down to the white house. the democrats will have to come up with policy goals that liberals and moderates can support. opec considering another u-turn. it will consider a return to cutting oil output next year. saudi arabia, russia, and others boosted production after pressure from president trump. a surge in's shale has heard prices. -- in shale has hurt prices. global news 24 hours a day on air and on tictoc on twitter powered by more than 2700
journalists and analysts in more than 120 countries. tom: thank you so much. he is in paris, which is a bit odd, but alan has an extraordinary history and knowledge of money laundering with his public service in the department of energy when rockefeller was first drilling in pennsylvania. he has looked at financial malfeasance over the years. he joins us this morning. as you look at the dynamics of 1600 pennsylvania avenue with a supposedly independent justice department, how much of this is follow the money? >> it is certainly follow the investigation. president trump has been eminently clear about his anger recusal.sessions' is it about follow the money? who knows?
there have been allegations of ,otential money changing hands people in trump's or working with the trump campaign. there are in dykeman's about tact -- indictments about tax evasion. i am not sure this is follow the money. it is really about follow the investigation. tom: what is so great about robert mueller and the fbi is what little we understand what these people do. what exactly do prosecutors, u.s. attorneys, and justice department employees, what do they do on this thursday morning? mueller, are robert you are probably making sure you all your ducks in a row. every indictment he has wanted
to get out that he has potentially already added, submitted to a grand jury and to rod rosenstein, who had been overseeing the investigation until yesterday, make sure you have your report ready, your final report on your investigative findings, or as close as you can beat to it, just in case the attorney general tries to shut you down. we have no evidence or indication he will do that. that is some people's fear that he will. u.s. attorneys, nothing changes for them. they operate independently from the acting attorney general. the cases they have aren't affected by this. departmentce employees are unlikely to be affected by this. the day to day operation is as it was before.
it really is the robert mueller investigation that is the spotlight. there is alan, if conflict of interest, who puts a stop to it? >> when jeff sessions came in, he made a request to give him an opinion on whether he needed to recuse himself, particularly about the issue of his testimony to congress and the meeting with the former russian ambassador or not. that official advised jeff sessions to recuse himself, and the sessions did. himhew whitaker has given no indication he will make that same request. abouter has been public his criticisms of the mueller investigation. he has given no reason to believe he will ask for that career fx that
officials at the justice department about whether he should recuse himself. if he does, i would suspect donald trump to go ballistic. this was the specific issue with jeff sessions after he was named attorney general. can see ayou situation where there is no more funding for the mueller program. is that where we are going with this? common rumore most or expectation out there, particularly if you follow law school professors and others who on blogs who spent a lot of time examining this investigation. their expectation is whitaker with potentially tried to reduce funding, people, something like that, but nothing has happened yet, so we don't know. tom: thank you so much. coming up, bloomberg radio, much
the ouster of jeff sessions. etf's jumped to new highs on the news, rising as much as 9%. sessions was a major opponent of marijuana legalization. new drug help to boost estimates in the last quarter. it is moving away from older products better losing patent protection. that theold bloomberg company is raising to beat u.s. pricing policy. >> on a global basis that we have a readjustment in prices. i think the japanese prices are a good benchmark of what the right level should be. whether that can be done, i don't know. >> that is your bloomberg business flash. francine: thank you so much. a big day for european bank earnings.
italy reporting third-quarter profit that missed estimates. one bank has ended five consecutive quarters on the other hand of contraction edit -- at its trading business. it joins a small number of european firms closing the gap with her wall street peers. our financeow is and investing managing editor. they couldn't be more different. what happened at unicredit? >> you have the tail end of the turnaround that was focused on the cleanup of the bank. that has happened now. investors are looking for sustained growth. there seems to be a slow down in expected expansion. turkey is weighing on unicredit. they have projected lower revenue growth next year. the capital offers are taking a
hit and are not as strong as they were hoping. this is what investors are focusing on today. it's not so much the turkey write-down, but longer term. they would have hoped that revenue would have been coming through by now. the ceoyou have had saying he might look at consolidation. italy, everything italy-related is problematic for investors. unicredit at the moment trades among the lowest levels compared to european peers. that is reflecting the italian discount. tom: the foundation or chronic -- are chronic negative interest rates and the artificiality that brings the banks. 2019, what is going to be the new eu bank religion for next year? >> they are focused on growing
their commission-based income and pivoting towards expansion in wealth management. that has resulted in more competition and the margins are getting squeezed. with some of the cost-cutting coming through, you are seeing improvements in the margins in lending. you saw that with commerzbank today in the consumer business, where the aggressive push they made to take on clients is now yielding growth in margins. banks seemhe french to be doing so much better than the rest. in point.nerale case it was all around. evidenced they are much further down the road in terms of focusing on their core businesses and developing
those to levels that is yielding more profitability. tom: thank you so much. on the challenges for eu banks. we will come back with a killer chart, i say. william lee with us from the milken institute. mr. eiger will stop by, a conversation with the disney chairman with david westin. it will be most interesting. maybe they will talk about digital and streaming? this is bloomberg. ♪
flowextraordinary news amid a perfect fall in new york. a little chillier this week. thrilled you are with us. extraordinary news flow. single best chart. a few more comments before to his lee dashes off busy morning at the milken institute. jack, this is the dow. the depression on the left. up, up we go. , the answer is
capitalism is about profit. gridlock doesn't get in the way of profit, does it? gridlockthe lack of brought us policy initiatives am a now they hope they will lock in those initiatives. the gridlock is welcome by the markets. we saw the stock market reaction that has verified that. tom: one of the themes of the election was the death of american exceptionalism or the reaffirmation or desire to see it. in a gilded age, can there be american exceptionalism or will things be changing? wasmerican exceptionalism brought about by financial markets. the role of private equity has provided more corporate financing than ipos. change in financial markets
is affecting and influencing investment strategies in place and how we go about making public policy. we are not recognizing the source of this new funding. clients are clamoring to get into private equity deals. it is an important topic to understand that private equity is the new force in financial markets, the basis of the new american capitalism going forward. tom: do you want to comment on that? we supplement our wealth management effort with direct investment in real estate and private equity. you are right. stocks, bonds, cash, it is buildings and companies. that is why and our clients are with crescent. >> private equity has gotten a bad rap, it hits things done by firing people and destroying jobs.
we at the milken institute are coming out with evidence in a note that shows private equity grow employment faster than non-private equity firms when they go public. , theyou compare ipo firms ones with private equity show more employment growth. there are a lot of misconceptions we are trying to unravel. , wehen we buy a company want it for 100 years. we will use the cash flow to pay ,ividends, not pay down debt which means we are not firing people or engineering the company to flip it. we want to own it like a family owns a business. >> can we get more investors into private equity? in the u.s., only qualified investors can participate in that. the s&p has to change its rulings. am: i will let you have couple coffee with the newly minted speaker policy of california. bill lee, thank you for joining
us. anthony, bring up the chart. jack knows this chart as well as he knows the next chicago cubs victory. jack, this is the great fear, not down, not up, but almost a malaise. are we at risk of a malaise? >> it is possible. that malaise was caused by the double-digit unemployment, double-digit inflation, the oil embargo of 1973, so i don't expect we will have those same types of elements in place. what we look at really, step one, are we at war or not? we are not at war. that is a good sign. our energy prices rising or falling? they are falling. that is a good sign.
step three is trade. that is a negative. i hope that is temporary. and profits are rising. long-term equities is a great place to be, but i also think interest rates need to normalize , and that will create a headwind for the next couple of years. francine: do you worry about the price of oil in volatile, or do you just prefer a lower price? have doneheir allies three u-turns because they are adjusting to the waivers, sanctions, and other disruptions in other countries. >> i guess i would prefer volatility with low prices than stability with high prices, i suppose, but in general them if you are looking at the tailwind, it is for lower prices. the fact is we are becoming self-sufficient here at home. we are still burning more natural gas than we are
consuming. eventually that will make its way to europe. i think there is a great energy push that is a net positive for the u.s. francine: if you look at equities, what would trigger a correction? a confluence of small things or 1/8 event, maybe from china? it's going to come from the european union. they are on record saying qe ends at the end of this year. i believe it is the european union keeping the ten-year treasury at 3.1% or 3.2% and not four point percent -- 4%, or 4.1%. i think that's where the move is coming from. tom: none of it really matters. we turn to important matters. bryce harper in a chicago cubs uniform? >> is that confirmed?
tom: it is not confirmed. the cubs have one the most games and major league baseball in the last four years. >> they don't have the batting average of the boston red sox. tom: thank you. bryce harper in a cubs uniform? that is un-american. >> he would be a great right fielder for the cubs. tom: important discussion about the chicago cubs. it is an extraordinary news flow. looking at the events in washington after the election and that interesting >> -- press conference yesterday. we will drive for the conversation on bloomberg radio worldwide. this is bloomberg. ♪ dwide. this is bloomberg. ♪
provide strong support, relieve pressure and optimize airflow to keep you cool. hello bed of my dreams. order online. we'll build it, box it and ship it to your door for you to enjoy. sleep on it to up to 100 nights and love it or you get a full refund. returns are free and easy. i love my leesa. today is gonna be great. read our reviews, then try the leesa mattress in your own home. order during our fall mattress sale and save. for a limited time get 150 dollars off and free shipping too. sale prices are available right now. go to buyleesa.com today. you need ♪ aftermath,rm
gridlock or compromise? will the democratic house work with trump, or does the mueller investigation get in the way? markets look for clues on the end of the hiking cycle after the bond and dollar selloff. italy and brussels, the eu throws cold water on italy's growth projections and says the deficit is close to the eu 3% limit. david: welcome to "bloomberg daybreak." on a serious in story out of thousand oaks, california. , 13 have, a shooting died, including the shooter and a sheriff's deputy, the first respond to the scene. afteri feel like week week we get more of these stories and it becomes difficult to know where to take them. david: