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tv   Bloomberg Surveillance  Bloomberg  March 12, 2019 4:00am-7:00am EDT

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consumer retail sales stabilized. and the pound is up about 5% this morning. optimism is building to reach a deal. let's talk about what's going on in european futures. higher, is opening optimismouch higher, building that potentially we could see a brexit deal in this key parliament vote, theresa may getting a new deal. the big question is whether she can get it through parliament. does it make enough concessions for the hardliners to get a deal through? i know you will be live in westminster. -- cac had some payroll data better than last quarter. let's take a look at the broader picture. one thing interesting to look at
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is the financials, how banks are doing ahead of the key breaks it -- keep brexit vote. the bank of england wanted banks to have three times more liquidity on hand. and in technology, the nasdaq closed up more than 2%. bank of america upgrading apple, a huge semiconductor deal, $2.9 billion in the u.s. autos in consumer discretionary's are a bit higher today. this is as vw reports margins were a bit softer. key brands like audi and porsche. let's take a look at the individual movers across the europeans actor. right now 82 are down and here are the ones that are up, bank of ireland, lloyd's, metro bank, renewal is also higher as they have the press coverage about how this company will move
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forward. let's take a look at what's going on to the downside across the stoxx 600. 4%, this is as many are selling shares pre-ipo. unilever and diageo as well. a mixed picture across the downside. murray, thank you very much. let's talk about some breaking news that is come across the bloomberg, involving the 737 max, the tragic events in ethiopia over the weekend, the second crash of a 737 we have seen in a number of months. australia's civil aviation authority has now suspended the boeing max 737. we are seeing different regulators adopted different approaches. the faa is not making anything at this point, some are
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suspending it from its own airline, some regulators are suspending it, some from airspace. the complicated web of responses we are seeing to the dreadful events with ryanair and at the airline in ethiopia. let's talk about what's going on in these markets. matt: european markets opening higher as asian stocks are headed for their biggest increase since january. a rebound in u.s. tech shares spreading basically around the globe. joining us now is the head of asset allocation research, and i suppose -- we are very focused on brexit right now, but it fits well into the picture of a global slowdown. that doesn't seem to be stopping stocks over the last couple days. what's going on? >> well, you are absolutely right. brexit is one of the reasons why
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markets in manufacturing and other areas have suffered over the last six to nine months. brexit has been a big part of the whole slowdown story, and as and i gets resolved, think brexit will get resolved, the no deal permutations get ruled out, it is resolved that we will drive backup, that headwind will be removed. >> good morning. let me ask you -- we will talk about brexit in a moment. let me ask you about equity markets. we saw that terrible selloff in the big rebound. what do you see for equity markets from here? we see some optimism around trade boosting markets. is that sustainable? >> i think this whole equity rally we have had this year has generally been rather under looked, under owned. as a result, when you have had
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small-market setbacks as we had last week, you have seen sentiment become quite fragile on very little news flow. that's obviously quite a good thing for markets, strange as it may seem. what you don't want is to have people falling in love with the stock market, and right now you're seeing a big amount of seeingism, you are fragile measures of investor confidence. all that means when you get days like today where you have new sentiment on things like brexit or trade, that pushes stocks higher, and i think that will be the theme for the next few months. >> so where do you expect stocks to go in the first half, or even this year? >> i think the direction is upward. yous going to be one where
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are going to have pockets of volatility, and it is going to be one of those type of markets. however the nature of the risk assets may change as the year goes on. for instance, we all know the economic data has been rather insipid so far this year and that means it will cap the upside for markets, they won't get into the double digits from here. -- ifd have recommended they start to shift out from equities into other risk assets like high-yield, like emerging debt, as you get the benefit of that kerry, i suspect that will remain the game plan for this year. you invest in technology at the moment? we saw a rebound in tech stocks,
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m&a, upgrades, big names in the tech sector like apple. are you excited at this stage as the cycle is about technology? >> it is quite hard to imagine the stock market getting much higher without technology participating. of course it's a big part of where it is, it's a big part of what is driving sentiment, so tech is wrapped up in our positive, glass half-full type of interpretation of the market. as i say, the big point is that there's a lot of skepticism, a lot of fragility in sentiment. some of that is preserved because the economic -- the news flow hasn't been terrific, but what it means is that investors should stay longer. the nature of those risk assets may even all this the year goes on. maybe we start to haircut the equities and go into carry areas.
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i think the key point is we will not have a recession, and we want to be focused on delivering a decent level of return. >> all right. christopher will stay with us. we have a lot more to talk about. you have heard clearly the brexit protesters are back. we will be discussing that ahead of tonight's meaningful vote. up next, we will bring you the stocks on the move so far this investorsfter pre-ipo sell shares. you see the headline at the bottom of the screen, australia is going to suspend, with other countries, in grounding boeing 737 max-8 airplanes. this is bloomberg. ♪
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anna: welcome back to the european open. this is the european market open. we are 10 minutes into your trading day, this is how things look for european equity markets. held back by the strength of its currency, the pound surging yet again. 1% higher in early trade as a result of progress on brexit. we will wait to see what parliament decides. annmarie hordern has the latest. >> thanks. .6%, even though
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most of its brands were down. like porscherands and audi. we spoke to the ceo earlier today. >> i am happy with the performance we've had. seeing to keep anditability at this level, car markets are really difficult and we are still optimistic because they can change between china and the united states as brexit is unclear. >> we will get more of that interview. nearly 5% down, shares set to be upward and certain pre-ipo minority shareholders are selling at 8% of capital. earnings missed estimates.
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rbs is saying results were unconvincing and the competition is intensifying for the company. anna: thank you. theresa may has won changes to her brexit deal after a chaotic day in london. she had late-night talks in strasburg with jean-claude juncker. around midnight, the leaders announced the new deal. what we have secured is very clearly that the backstop cannot be indefinite, cannot become permanent. >> the backstop is an insurance policy, nothing more, nothing less. the intention is not for it to be used, like every insurance policy, and if it were ever to be used, it could never be -- >> we have a very clear timetable that enables the backstop as defined currently to be replaced with arrangements. >> let us be clear about the
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is here of brexit might not happen at all. mahon isistopher still with us on set in london. --m what you have read about there are new aspects of the brexit deal. what is the market pricing in? vote fails andis that the market is ok with that? is that the base case? consideration gay in any brexit discussion is just how little support there is in the u.k. parliament for a no deal type of brexit. you can see these reports were you have had threats of cabinet level three organization, talk of people walking out of the u.k. parliament if no deal came to pass. , softer forms of
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brexit are likely to take center stage, and whether it is this particular permutation of the deal, whether she has to reach to with other parties perform cross party consensus, or whether there are other types of scenarios, the big point for markets is it is not going to be a hard brexit, leaving without a deal, and that means sterling probably appreciates from here. matt: how much further do you think sterling could appreciate, and are you placing bets on that? >> absolutely. we have been supporters of sterling all year and i think it's interesting that despite these terrible headlines around brexit this year sterling has gone up in value. i think that tells you what we have been talking about -- as time goes by and as the deal is
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sterling it means that appreciates, that cataclysmic outcome becomes less and less as time goes by. to 1.40?et back probably not. but 1.37 is entirely within range. anna: ok. i will put my u.s. holiday plans on hold. let me ask you about your what if they say they will support theresa may's deal but the price of that support is a change in leadership and that means a new prime minister is in charge of negotiating the relationship? the future relationship we got is not legally binding. >> absolutely.
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and all those stories will be portrayed, all those questions about whether or not we have the er g dictating things, oral those issues will be explored. but if it comes to a vote in parliament, where you would the single biggest majority is in the question of avoiding and no deal, and that is where most parliamentarians would support. the u.k. parliament will do everything in its power, including delay, rather than take the no deal option. of course, accidents can happen, nothing is impossible, particularly with this brexit story. but once you cross off the least likely option, which in our view is the no deal scenario, everything else becomes softer, everything else becomes more benign. that is what you have seen this
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year as time has gone by. will we get stuck in a long delay, in an eu style kick the can down the road, nothing really ever gets decided, things just come in a drip feed? how bad is that for u.k. stocks? there has been a great question about the wrong answer for the u.k., obviously it all depends on euro politics. but for markets, all these ideas are actually quite good for sterling. as an example, the 21-month delay that has sometimes been talked about would also allow at least two more labour party conferences, which would be two more times were the labour party membership could start imposing upon their leadership, a second referendum type outcome. extension, 21-month
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softer forms of brexit are likely to take center stage. matt: all right, christopher mahon will stay with us. we still have more to talk about. thent to quickly recap berlin headlines we are getting, rolling across the terminal after this stock collapsed yesterday in u.s. trading. australia seeing -- and we suspending are seeing south korea's east star suspend flights with the 737 and you have already heard from singapore, china, and others. lie in their said it may switch the aircraft to airbus from boeing after the latest crash. of course, it had the first one
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about five months ago. up next, the u.k. economy may have dragged itself out of contraction in january, but weak growth looks set to persist here on the continent. we will talk asset allocation in europe next. this is bloomberg. ♪
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welcome back to the european open. we are currently about 23 minutes into the trading day right now, looking at gains across the continent and in the u.k. the economy in great britain may have expended in january after a contraction in the previous month. we will see the data drop in over an hour. the signs on the consonant are less positive, with italy still in negative growth and the german economy pretty stagnant. witness most recent guidance from the ecb, is there a real threat of the japan occasion of europe? ahead of asset allocation research at bearings is still with us. what you think about just that? it seems like the ecb is constantly saying it will happen next year, they are almost the boy who cried wolf when it comes to inflation and growth, they always have to reverse back,
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lower their outlook, and push forward plans, pushback plans to raise rates. is it becoming japan? the european economy has obviously had a tough time for the last 12, maybe 16 months. part of it is to do with the whole chinese story and tariff story, part of it is to do with all those in the car manufacturers, emissions regulations, and part of it is also brexit related. when you look at those three drivers of what has caused the slow growth in europe, you're probably going to get good news on at least one or two of those. you are likely to get good news on the trade front, the chinese front, that could at least be one form of good news. you are also likely to get positive developments on brexit. we have already been talking about how our viewers are likely
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to get a softer brexit. we won't get the hard deal option. resolved,s things get what you tend to find is that the european economy does a little better. the one aspect which is unlikely to recover as quickly as markets expect is auto, all the emissions regulations, there's probably more structural than cyclical, a lot of uncertainty amongst consumers to do with what type of car they should by and they will probably put the whole car purchase off. it on the chinese trade front and on brexit, at least there should be good news on those two points going forward. anna: do you not think, christopher, that once we see any resolution of the u.s.-china trade tensions, that the u.s. might set its sights on europe? that could be weighing on european valuations. >> i'm sure that's a risk, and
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we certainly know that donald trump has been tweeting about it. of course europe is quite a tough not to crack, it is difficult to negotiate, as the brits are finding out. if donald trump did put tariffs on europe -- in an election season, with the presidential race kicking off, it is quite unlikely to go there. on the other side of the equation i'm sure donald trump wants to see the fruits of his renegotiation with china come through, he wants to get economic good news in the united states in that election buildup. i don't think you would go after europe and a serious fashion. christopher, thank you very much. christopher mahon, thank you for joining us. up next, going green. we will bring you our interview who saysequinox ceo,
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spending will rise from 5% to 15% in 20% 2030. don't miss that conversation. we are live in london, tracking the politic, and we get meaningful votes on theresa may's brexit deal here in london later today. ♪ ♪
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matt: 30 minutes and training your top headlines. may's midnight deal. the prime minister has said she has won legally binding changes to her deal, but will it be enough to win parliament today? >> let us be crystal clear about the choice. it is this deal or brexit might not happen at all. matt: studying the course. when ceo tells us he is optimistic that will be in and to the u.s.--- an end to the
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u.s.-china trade dispute. outlook forhe same this year to keep profitability at this level. continue.ng's woes the list of countries grounding jet rises with singapore and australia taking action this morning. airbus gains. good morning and welcome to bloomberg markets.this is the european open . i am matt miller here to talk to the ceo of their full earnings result.the company talking about investing a $49 billion in electrification of the fleet. ont cost takes it's toll profitability. alongside anna edwards who is along the green at westminster. anna: in the.
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tear on the green -- indeed, here on the green. a lot of legal advice that could be fascinating as to how this will influence the in peace in the -- mp'in the houses behind us and how they will vote. the key question is theresa may made this dash. did she do enough? will she have done enough to convince those groups that they should back her in her deal? are in the background in full voice because the proceedings here are going to be really interesting. we will hear from the attorney general. will he be able to take his advice, to say that the u.k. is not going to be trapped in the backstop? that will be interesting. we have already heard the former attorney general say that his
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legal advice is that nothing has changed, that this is not enough. some reserve judgment. let's get a bloomberg first word news update. nabel: theresa may faces parliament later today after striking a late-night deal to revise the terms of the divorce from the european union. after a chaotic they have changing plans, the u.k. p.m. made a last-minute decision to fight to strasburg. a joint news conference was held to announce the changes. >> crucially, one of the requests that parliament has, sticking together and had an majority vote for it was that it should be possible to replace the backstop with alternative arrangements. we have secured with in this thatclear timetable
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enabled the backstop as defined currently to be replaced with alternative arrangements. belle: many of caracas's residents have been reduced to carrying buckets of due to powerwater cuts. global news, 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. anna: thank you. let's talk about the oil price. opec officials have met with senior executives from north america's booming shale industry. the balance of power swings from the middle east to the united states. our numbers show that the
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75% of theears, global oil production growth comes from the united states. it means u.s. production will only. matt: bloomberg also spoke to ecuinorceo -- the ceo. to me, this is a very rational decision because if you look at the norwegian economy, this is a national view. we are extensively exposed to oil and gas prices. taxes.ip in equinor and it is quite extensive. for the government to look at , i thinkall exposure
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that is the portfolio view. i find it very rational. when we start talking about this, there are many ways to interpret this. i think we should go back to the great starting point for the government. when it communicates is that this is a portfolio view. what i feel like it did do was highlight shareholders pushing back on big oil. that must be pressure for companies like big oil's to change their models, to be more climate change sensitive. >> definitely. there is a lot of expectation out there. climate change is happening, is real, our guests in the industry isr gas
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a big contributor to that. we have to be able to build that into our strategy. that is what we do as it company -- a company as well. >> from large and small shareholders, have a conversation changed in the last two years when it comes to new energy? , it iserms of esg definitely higher on the agenda. we see that coming into the criteria in more and more portfolio decisions. we relate to the. that.it is very much about disclosure and information . i think people have reasonable requests in terms of how we perform and how we think about our strategies and shape our portfolio. >> do you get the feeling that if you don't spend enough durant that up, that they are going to -- or ramp up, that they are
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going to drop you? >> we see shareholders more focused. there are more questions just going when you're back and meeting investors now, it's different. they asked these questions, i want to know more about how we think about the quality and that. climate change is real, it is affecting society. even though we shouldn't see this as an attack on our industry, it is a reasonable howest to know more about we relate to this. ceo. that was the equnior let's show you what is coming up next. we will bring you some of the stocks on the move this morning including a french engineering
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company jumping after reporting earnings. this is bloomberg. ♪
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matt: welcome back. we are 40 minutes into the european trading day.
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altogether look at our top individual stock stories. airbuse: i'm looking at higher this morning after more news from the emergence since the devastating and deadly crash of the ethiopian airlines flight which was operating a 737 knots. -- 737 max. spie is up higher. g4s to the downside. it is a global security company and they are following after full-year results. the company says they have received interest from global cash. thank you very much. joining me now on the green is also on theember,
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brexit committee and brexit spokesperson for the dup. kit prop up the conservative government. there to have you with us. i-97 this morning that you are seeking legal advice -- i know you set this morning that you are seeking legal advice. we said we would look the documents ourselves because they are very technical. we would ask for independent advice of a legal nature and also listen to what the attorney general said in the house this morning. he is going to make a statement in the house about this. and then we would come to a conclusion. however, i think we have sent a number of tasks, which we expect us to deliver. we want to know what is being legally bound and how legally binding it is. will it ensure that the united
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kingdom's government will have total control over whether or not we stay in the backstop or in a backstop? secondly, when it comes to future negotiations, that the withdrawal agreement will be legally changed to ensure that we do have the ability to control our own money, loss and trade. will the dup be satisfied? geoffrey cox was very honest and adamant about the deficiencies in the withdrawal agreement. but still, he has been involved in these negotiations to a certain extent. that is always difficult to be objective in that situation. that is why we will also look at other independent legal of ice. anna: yet mentioned the tests that you have in mind. do you think it falls down on any one particular test? is that anything you are particularly worried about? ammy: i think what i'm worried
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about is what the prime minister hun sen. -- has said. assessment, the judgment of what she said she was going out to achieve, i think she is being honest in saying she hasn't achieved it. that will be unimportant factor -- an important factor when it comes to whether or not we determine that this afternoon. i think the one thing we can't accept is a deal which, as michel barnier said on friday, would enable the eu to dictate whether or not northern ireland could ever join the rest of the united kingdom in leaving the european union. that is what this deal stands for at the moment. that is the eu's interpretation
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of this deal. the is not a case of perfect being judged against the best we can get. this is a case of toxic deal being kept on the table. we will not be giving its board. anna: if this meaningful vote fails, will you accept no deal? will you happily go towards no deal or will you try to take no deal off the table? deal: a case of no deal or will be a less than full deal. it will be a basic deal. already the eu and you can't government have agreed on a number of deals. there will be arrangements put in place. ana: very little compared to full deal. able: the precursor to be to deal with future arrangements. in our view, this toxic deal is
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the worst of all options. interimve to go for an hearing where we don't have a full deal with the eu, that would be preferable. anna: thank you so much. exporters are bracing for a significant financial hit from brexit. a new survey has found that one day's brexit order delay could see canceled contracts for one in 10 british exporters. the survey is set to highlight the anxiety between businesses as parliament has to a crucial vote later today. joining us now to talk further and visiting fellow cranfield school of management. surveyed 1700 people and talks about the possibility of a no deal brexit for one day.
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the fifth survey we have done since britain voted to leave the european union. in this survey, we asked specifically 750 supply chain managers quality application of no deal? if thethem said transportation of their experts was delayed by 24 hours, that that would lead to their contracts being canceled. 20% of those supply chain managers said they would have penalties imposed upon them. 25% said they expected payment terms to be extended. to cash cycle and liquidity position and organization would come under pressure. --ik particularly impact that would particularly impact small and medium exporters in the united kingdom. anna: i know it is difficult to
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generalize, but if you had to sum up what level of disruption supply chains would encounter with a no deal brexit, what kind of anecdote would you give us to paint a picture? john: we are kind of beyond anecdotes. doctor said that if the port in dover was to be delayed by two minutes, in one day the cue would be delayed two miles. that is an academic doing some calculations. on march 5, customs officials at went and did industrial action restocked every truck ostensibly to check for safety and security clearance. athin 12 hours, the cue
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calais was 26 kilometers. that actually happened. data trucks stop moving, the potential for chaos is enormous. the other benchmark, if it is a non-eu track to come into calais today, let's say from turkey, it would take between 30 and 40 minutes for that track to clear customs. also if we were to look at the infrastructure to actually deal with customs clearance in u.k. ports, at the moment at dover we that can beooths used to track documentation. essentially what is going to have to happen if we have a new deal, is a customs declaration will be made away from the port, and will frankly not be checked. there is no mechanism to check in that the goods on the lorrey can be assigned to it as it passes through the port. brexit, which was about taking control of our borders, taking
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back control, to use the leave campaign's slogan, will actually lead to a situation where there is a complete lack of control if we don't allow the trucks to keep moving. otherwise we are going to have significant delays with a real economic impact on our exporters. much.thank you very glen, visiting fellow at cranfield school. coming up, more grounding for boeing. singapore and australia said they are blocking the 737 max accidents.eadly we will look at the impact next. this is bloomberg. ♪
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matt: welcome back to the european open. we're just about 55 minutes into the trading day europe. let's get to the boeing story after that stock got crushed yesterday in the u.s. more countries are grounding their fleets of boeing 737 max jets. that is after the model was involved in two deadly crashes within a five month.
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-- five month period. what is the latest -- i know it is a developing story, but what we know so far about who is grounding these planes? morning wasews this that singapore industrial yet have joined china and some airlines in south america in grounding these planes. that doesn't mean they have done so because they have new information on why the plane crashed and whether it was similar to the plane that crashed last year in indonesia. the u.s.the faa, regulator and boeing are saying that position right now is that this aircraft is safe. that sets up a bit of tension. clearly, other countries and airlines acting first of caution. on the other hand, until we know otherwise, the manufacture insisting the plane is safe. anna: that is what we are
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hearing from boeing and the faa. what about the investigation? chris: unfortunately, that is the frustrating thing. there has been a lot of speculation about whether there is a link between the two crashes. right now, we still don't know. reports.onflicting clear similarities between the two crashes, but at the same time information that may contradict that. example, eyewitness accounts that there was smoke coming from the airplane before it crashed. that would suggest there are differences. the most important thing here is that we receive information as quickly as possible about the circumtances. anna: thank you very much. live in westminster this morning, we are just hearing from the ert within the
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conservative party that news of the dup and geoffrey cox will be crucial. geoffrey cox, the attorney general speaks later this morning. that will be critical as to how the vote goes. this is bloomberg. ♪ want more from your entertainment experience?
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just say teach me more. into your xfinity voice remote to discover all sorts of tips and tricks in x1. can i find my wifi password? just ask. [ ding ] show me my wifi password. hey now! [ ding ] you can even troubleshoot, learn new voice commands and much more. clean my daughter's room. [ ding ] oh, it won't do that. welp, someone should. just say "teach me more" into your voice remote
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and see how you can have an even better x1 experience. simple. easy. awesome. francine: a deal by moonlight.
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can this new deal when the meaningful vote? bricks through 132 is no deal chances received. boeing troubles continue. singapore'sesia,, -- singapore, australia. today, one third of the global fleet is out of commission. good morning, i am francine lacqua in london ahead of the parliament vote, tom keene in new york. we look at the applications of brexit and go through the eu side. tom: extraordinary headlines in the last hour on boeing. we will have a full update on the. that. i must say you are dressed for the theater. it must be the globe theater in
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shakespearean drama. it is extraordinary what has happened in the u.k. in the last 12 hours. francine: i thought i was just like barbie. it will be theatrical later this evening. first, let's get straight to the bloomberg first word news. theresa may striking a deal to provide for the terms of the u.k.'s divorce with the european union. it is not clear whether that is enough to whenever parliament today in a crucial vote. commissioneuropean president last night announcing changes in the agreement. they have to do with the backstop arrangement aimed at preventing a hard irish border. more problems for building this morning following the crash of that ethiopian airlines max 737. bloomberg has learned that lion air may switch to airbus.
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max jets crash7 in october. all 189 people on board were killed. airlines inining mexico and brazil in grounding their 737 max fleet. china is being noncommittal on whether president xi jinping will join president trump at a summit.- chinese officials worried about putting xi in a position where he might be embarrassed that president trump or forced into a last-minute concession. liberal democrats in congress do not agree with nudity policy's comments -- nancy pelosi's comments on impeachment. one congresswoman says it is too soon to say whether there will be an attempt to remove the president from office. global news, 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries.
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tom: thinks so much -- thanks so much. this may be the litmus paper for all that is going on. we don't have the boeing effect today. i have green on the screen for dow futures even though boeing is a little like this morning. euro strength over the last 24 hours, next screen. will join us in the next hour on the u.s. stock market. list,ng with a very nice 132.26. i really want to emphasize this. for those not up to speed, a bigger number is a stronger sterling, weaker dollar. to 129.n we advance nicely in the last few hours. a solid jump up here on all of
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prime minister may's travels to stroudsburg. -- strasburg. also showing stronger sterling, weaker euro. i want to go to the bloomberg on boeing. i thought it was important to a long-term chart of boeing. disrespect 40 years. what the pros do -- this goes back 40 years. boeing, nicely contained here. up we go. here is the latest leg up on boeing. .e are back to a nice lift up boeing is extended if you look at the 30 year trend, even with pullback yesterday. now, we go to london and francine lacqua.
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francine: we are here live at westminster. theresa may has struck a deal to revise the terms of the u.k.'s divorce from the european union, but it is unclear if she has done enough to win parliament's support. it seems like it is a very important day.i don't know whether theresa may thinks she has done enough to win enough support to get her deal through parliament this evening. rosalind: her deal is probably looking better. what she has done is got a little bit of legal clarity around the question of the border between the you can ireland. that may be enough to bring some of the eurosceptics over. she is expecting her attorney general today to endorse that, to give his legal opinion saying
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that that is what the new deal does provide. the question is, how many of those skeptics can she bring over. the last deal before parliament, she lost by 200 votes. that a lot of people to get onside tonight. what are we expecting the attorney general to weigh in and what kind of things would he say? -- would he say that the uk's more legally bound to the backstop than it was two years ago -- two weeks ago? basically for the people concerned about being tied in indefinitely, these legal documents will provide a u.k.. charity to the he is known to be a brexiteer and his words do carry some significance with that can't. amp.saying that -- that cm
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'tis a saying that is likely to bring some people over. tom: i feel like i'm watching a sport. i guess i am focused on the dup like everyone else is after the irish headline. far more, i am looking at this otherhamber and the expert lawyers who are levers as well. what are you as a grizzled pro focusing on from the star chamber? rosalind: i think we are brexitng a little bit on like everyone else with only 17 days to go. it feels like the last time to get there. what we are watching is the magnitude of the vote tonight. we are expecting a fair few people to come her way, but she will probably still lose. if she loses by fewer than 50, she might say i am almost there, this is as good as it is going
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to get and she will put it to a fair vote before brexit day. if it is beyond the margin of 50, we probably looking at a delay to brexit. much.ne: thank you so we will have plenty more updates from westminster throughout the day. on the brexit actually means for the london is the head of a $1 trillion asset arm and ahead of simcoe sterling -- pimco sterling. thank you both for joining us. when you look at brexit in the uncertainty of the vote tonight, how much can it actually new sterling? brexit,en i think about and i have been quite proponent on the view that the market was describing a probability for it to not happen, i continued to
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believe that. when you think about this, given the circumstances we have today, you could argue that if there is an upside risk to the pound, it is because of that. right now, it continues to suffer from the brexit premium. as the eventuality of a hard brexit perhaps gets further and further away, maybe what we are looking at is the potential for the pound to rebound if we get the visibility we would like to see. marketow, i think the pounders are debating the impact of the overnight changes. frankly, i'm not able to comment on the, but i do believe that the most likely scenario is an extension. we will get into the debate again. it is another week and month of reckoning, and hopefully we will get to visibility within basically the end of june. tom: there has been so much news
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flow. i really go back to the moment we saw mr. draghi reaffirmed the slowness. how has pimco changed its eu strategy over the last two weeks? us, we have always been skeptical that the europeans were going to get much left off on interest rates. the ecb has been trying to move away from negative interest rates. they have managed to get step one. step two has been the bigger challenge, particularly with the fed now indicating that it is potentially on pause for a bit. the european data has slowed down. crucially, what we have generally focused on for a long time, has been the inability of europe to get inflation up towards the target sustainably. if you look at what has been going on for years with core inflation rates, they have been
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stubbornly low. that creates a problem for the ecb. i think while european rates have been left for a while, we have been relatively agnostic despite the low levels because we think it is going to be very hard for the ecb to go through any kind of rate cycle. francine: let me come back to brexit. it is your last interview for pimco, so you can say whatever you want. what happens to u.k. assets of theresa may is defeated by a big margin this evening? pimco, am retiring from but i am still fully embracing the company. for me, the interesting thing about this evening is momentum. there is a set of stages we will go through today. the first one of those will be geoffrey cox. the second is going to be the dup. the third will be erg. and then we would get the vote itself.
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what we are looking for today is how much momentum we can get towards narrowing that potential loss or however the vote goes today down to what most commentators regard as a more manageable number. if we can get on the path, i think we will see sterling respond pretty well to that. rates potentially on the backside as the economy could recover in the event that we do get a soft brexit or some kind of deal. francine: thank you so much. i'm here with people from placards with people on both sides of brexit chatting trying to get their point across. bloomberg, we speak exclusively to the former u.k. prime minister, tony blair. don't miss that interview at
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5:00 p.m. london time. this is bloomberg. ♪
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viviana: this is "bloomberg surveillance." ceo increases has bonus by 16%. cups and gavecup up key goals for next year. they voluntarily gave up a piece of their bonus after socgen paid about $2.6 billion last year to settle several u.s. investigations. royal dutch shell wants to
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become the world's biggest power company. european oil producers facing tougher pressure to adopt clean energy than american rivals like exxon and chevron. volkswagen is increasing is that on electric cars. almost 50% to build more of the vehicles in the next decade. last year, profit margins shrank as the three largest brands. we spoke with the ceo. i'm happy with the proponents may have. we have the same outlook this year to keep profitability at this level. viviana: that is the bloomberg business flash. tom: thank you so much. all of the interest at westminster, the changing patterns we see with united kingdom politics, to tonight's vote. there are a few other issues
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going on as well. we are advantaged by christopher jasper, bloomberg's european transportation team leader, but a guy with over two decades of dealing with accidents in aviation, dealing with european transportation. thrilled to have you with us. if you go to the air canada website, they have a big layout how they are introducing the 737 max. with that, they are going to file over to heathrow. what is the likelihood that it in european airspace? chris: i think that is the big question emerging today. certainly, yesterday, we have carriers in europe and north america saying that they were taking boeing's advice and continuing to fly the plane. however, today with singapore
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and australia saying that the 737 max is no longer welcome in their territories, that is a big deal. these are two very well-respected aviation authorities. that could be a bit of a game changer. francine: what is the difference here? boeing got a vote from confidence from u.s. regulators, but you have all of these other countries banning them from flying. do they have different metrics? do they train their pilots differently? chris: not really. historically, countries would always take the lead from the faa. the faa said an aircraft with safe, it was safe. that has begun to erode recently. passengers are perhaps better informed about evolving events. certainly in asia where we have indonesia, who suffered the 737 , alreadyh last year
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banning the plane and then china following suit. you have already got two countries that are major max operators saying the plane is not welcomed. you have a gradual spread from there. it is unusual for countries to essentially make policy. tom: you are the real deal. you have a romantic life vaulting from air show to air show. it is a great life with decades of transportation. how does knowing go to the next airshow with a 737 max? tois: it will certainly want resolve this issue, clearly, in some way, shape or form. one thing they absolutely need is to get the data out of those black boxes, which have been recovered as quickly as possible, and just try to find out early if everything does point to the same issue with the max. if it does, they need to take
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action quickly. what they don't want to do is feel bounced into grounding a note that they are convinced has suffered the same problem twice over. tom: very good. christopher jasper, greatly appreciate that this morning. coming up as well, covering the royal bank of canada. our chief executive officer in conversation with david mckay. stay with us. this is bloomberg. ♪
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tom: good morning, everyone. so much going on. francine lacqua at the green right now in westminster. andt now is mike from pimco sean. i want to know what you are doing with fees. what are you doing day today on fees and taxes when abby johnson is at fidelity giving the ranch away? >> our multi-boutique model allows us, given the structure of the group between distribution to be quite disciplined about fees. we are asset managers. ofn you look at the outcome what is happening from our financial results, you see rates are holding pretty steady, if
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not somewhat slightly increasing. that is not to say that we are oblivious to what is happening in the market. we do see some pressure, but we are able, given our business ,odel to be quite disciplined and being in a way focused on not selling our expertise cheap. given that we are evolving, we can maintain a decent probability. sometimes we need to become the center of the competitive environment, but i would say today, we are holding our rates pretty steady. i want to ask you very quickly about interest rates. what is the impact of lower interest rates for the euro area? of negativeyears
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interest rates, we are still in a conundrum on growth. it is a bit puzzling. growth in 2019f is kind of eye-opening. that being said, it may simply mean we will be in a growth environment that is going to be slower in europe for longer. right now, i think most market -- we will have to see what 2019 -- tom: we will have to leave it there. coming up, the member of , shadow brexit minister. ♪
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♪ "surveillance," francine lacqua at westminster turning to hear me amid the
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cries of leave and remain. so much has changed, and we will have that. we are following going. -- boeing. exactly how is the united kingdom economy? that is down to the inflation adjuster, the gross domestic product, and it can always be a sporting number. it is a prime minister may friendly number. the survey was .2 and the gdp number is 0.5, better than expected. the manufacturing crater that -1.9, still -1.1. with us in london is the chief executive officer for -- and michael from pimco.
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i guess these are friendly numbers. i see the index of services as well. on the the pimco take spirit of london and the united kingdom? michael: growth is holding up tolerably well. if you look at those numbers and the pmi, growth is around 1% annualized at the moment. we have had a slowdown because of what has been going on and we have brexit uncertainty. from what we see when we look forward, we take the view there is scope for u.k. growth to re-accelerate. we have the chancellor statement tomorrow where he is likely to spend a bit of cash. now, you in the trough can see growth improved over the second half of the year. isn't taxes doing in
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the united kingdom? ann: right now, the core is the continental united states. we have a presence in the u.k. and that will remain because we believe it will remain a very important asset management market, so we are making adjustments from a regulatory perspective and in the u.k., also opening up some of our locations in continental europe. it is quasi-business as usual because the adjustments are miner. francine: does it make a difference if there is an extension in terms of moving people around? what you make of the midnight deal between jean claude juncker and theresa may? jean: one more deal, one more day of reckoning. it is difficult for me to interpret whether it will change
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the direction of the vote. what i do see when i look at brexit and step back, i believe the assertion that going back to the people that it is not democratic, is wrong. the ill-defined contours of what brexit meant at the time of the referendum would justify coming back to the people, whichever deal you put on the table. the question may be tough to ask and it may be a three-part question. the democratic thing would be to go back to the people. i continue to believe that the outcome at the end of the road will be more likely soft brexit or no brexit at all then no do you brexit. -- no deal brexit. back, theto step linchpin issue of the irish border backstop, one looks at experiences around the world and
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it is not politically correct for me to say that, but when you look at the largest trading relationship in the world the between the u.s. and canada, it is a hard border but undefended, and the relationship is thriving even though you have seen gyrations around the free trade agreement. i would like to believe these elements can be put together at some point and it may not necessarily be within the next two months. if we have a soft brexit, the transition will last another two to three years and who knows what happens then, and election, under the majority, and maybe this will coalesce -- another majority, and maybe this will coalesce. francine: will financial services lose out? even if there is a second they want to make decision sooner rather than later. jean: everybody has made
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arrangements and i know some of our peers have moved significant people to continental europe. one thing i regret in the brexit debates of 2016 has been that the public narrative was very much how many jobs can continental europe take away from london. that has benefits in frankfurt and paris, it i would like the narrative to be more about what can we do in continental europe to ensure the political space u.k. or accelerates in the to allow for this decision to be rescinded, because it is a lose-lose. we have a tendency to think it is a win continental europe, lose u.k., but it is lose-lose from both sides. tom: thank you very much. francine is at westminster.
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sterling fractionally weaker in the last few minutes. with our first word news is viviana hurtado. viviana: theresa may has her new brexit deal but it is not uncertain -- certain with the backing of parliament. it includes changes including a hard irish border. jean claude juncker announced the changes last night and said it is this deal or the u.k. might never leave. there is a growing crisis of confidence in boeing 737 after the crash of one of the jets. singapore barred them from their airspace and others have joined them in grounding their 737 max fleet. buyers is biggest indonesia's lion air and they may switch to airbus. they had the first 737 max to
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crash and they are refusing delivery of more planes. u.s. is pulling remaining staff from the u.s. embassy in venezuela. presenceeo says the has become a constraint on u.s. policy. republicans and democrats in congress are joining together in a show of support for nato and the secretary, nancy pelosi inviting him to speed to a joint session of congress. senate majority republican mitch mcconnell is supporting pelosi's move. global news 24 hours a day on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. tom: much to talk about this morning. we are giving different views on brexit for our global audience.
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an interestings minister from the somewhat marginal north of england, the shadow brexit minister. this is bloomberg. ♪
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francine: this is bloomberg "surveillance." i am francine lacqua in london outside parliament. tom keene in new york. joining us on the green is jenny chapman, shadow brexit minister after the midnight accord between theresa may and jean claude juncker in strasburg. the clause is attached to the deal. thank you for joining us. can labour put a no-confidence vote on the table? ms. chapman: not today.
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deal andall about this we need a clear view of what parliament thanks. it is something we rejected leak -- rejected wholeheartedly. said that, we need to listen to our attorney general's advice when he publishes that later. getfully he will come and the chance to asking questions because we want to be responsible, but it is looking as if this is the same deal so i do not think it will get to parliament -- through parliament. francine: the referendum, people decided to leave the e.u. and this is basically run by lawyers. ms. chapman: that would be a terrible thing. it is not being run by lawyers. it is still based on a political decision about our country and the labour party does not have to do with attorney general's advice. we are being asked to take a
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leap into the unknown and we do not feel as responsible politicians that is something we are able to do because we are going to have a long-term permanent customs union with the european union to safeguard jobs and make sure we do not have problems with the border in northern ireland. that is really important to the party. there are bigger issues on our minds today. put ane: will you no-confidence vote tomorrow if theresa may loses by a big margin? ms. chapman: we have not made any decisions yet. that is for another day. we have to get through today and get a clear view from parliament on this deal. for our casenue about the deal we think is still achievable and deliverable. and has been well received in brussels -- it has been well
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received in brussels. if the prime minister hangs on, what is it that she stands up and stands -- says she will do next? that is what today is about. tom: we will continue with the shadow brexit minister. cker in watching mr. jun strasburg, urging a brexit deal. labour ine charge for the analysis for the next 10 to 12 hours, how do they look at the star chamber, the elite conservative lawyers, will they be of any value to labour? ms. chapman: i doubt it. the things they are concerned about are not the same as the issues troubling the labour party. that particular group of lawyers calling themselves -- i do not
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think anybody else's calling them the star chamber -- they come from a perspective and do not think leaving without a deal is a problem. we disagree with that and we would reject leaving without a deal. we have never entertained that idea. i do not think we will be hanging on the words of him and his colleagues. francine: we are looking at jean claude juncker addressing asking the u.k. to approve the plan. it would mean a brexit deal must be approved by the country in a referendum. ms. chapman: if that is what is needed to break the deadlock, we would have to. you cannot say we want to prevent leaving without a deal but reject viable positions
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forward. it is a good deal that we have outlined and if the government prevents that from happening, we are forced into examining these other options. to those who put this plan together, they have tried hard to get colleagues from across parliament to find a compromised way forward. francine: in your mind in the next three weeks, what happens? theresa may loses the vote, then what happens? ms. chapman: it sheila -- if she and allows usise to vote on leaving with no deal, then we need to decide on more time and what we need to do. if that happens, because that is what the prime minister has said should happen, parliament needs to say, doesn't want a customs union? unions it want a customs
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and close alignment with the single market? francine: doesn't want a referendum? what does it want? ms. chapman: i would like the deal we propose to be the basis of negotiations. it is something that brussels are ready indicated is negotiable, so that is what i would like to see. we have said we would entertain the idea of enough for -- another referendum, although there are problems with that approach. tom: jenny -- francine: jenny chapman, shadow brexit minister, thank you for joining us. in the next hour we also speak with ian blackford, the leader of the scottish national party. we are waiting to hear from the attorney general and the dup. this is bloomberg. ♪
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francine: -- viviana: this is bloomberg "surveillance." is defending tweets he
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sent last month about tesla. the sec wants him held in contempt for violating restrictions on social media post, musk telling them he has the right to free speech and was trying to comply with restrictions. is a sign at&t is putting profits ahead of subscriber growth for direct tv. ,ccording to court cutter news customers will see a $10 monthly increase. the service turned into a competitive budget -- market. erupting in a lawsuit. they accused the largest software market trying to extract royalties from phones it built for hallway in xiaomi. -- huawei and xiaomi.
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>> they do not think how to work harder, they are thinking how their money came in pc days. this is between microsoft and google, a war in the u.s., but they do not dare fight and turned to contract manufacturers. viviana: another foxconn unit else the iphone for apple. that is the bloomberg business flash. mr. draghi was a stunning announcement 10 days ago. what is the permanence of that across europe? if i look at the rate market and sg, what is the outcome or permanence of his actions? mike: he has made it clear there will be refinancing
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opportunities for the european banking sector. there are some parts that need refinancing of the much during long-term lending operations, -- maturing long-term lending operations. if you look at whether market has been continually pushing out that first hike in the debt by rate -- depoth knocking the ecb to the market. the importance, and the one thing we all think about is whether the ecb will miss the so-called rate cycle because if you think about where the fed is on pause for the moment, but having done a lot of the heavy lifting, and the ecb not having got away from the -40 on the depot rate, the challenge the
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ecb has is to get a rate cycle through. that suppresses all bond yields so if you look at a 10 year bund at 10 basis points, it is not great for anti--- any international investor. tom: we talked to the cfo of commerzbank who agrees with you, that this is sport. how do you live and survive with negative rates and positive rates that are so absurdly low? jean: you do what we do with our clients, which is look at different opportunities, diversification, and taking on a bit more credit risk depending on the circumstances. illiquidgaging in options to provide returns clients need for the long-term.
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the consensus is the fact that interest rates will remain very low in europe, or for a much longer time than expected. as a result, you need to find alternatives and this is what we are doing with our clients trying to renew investment opportunities in a slightly different way. francine: have you identified any possible acquisitions in china? jean: china, the $10,000 question. very important for us. it will be within a relatively , the second largest asset management in the world. we are looking to be a participant in the domestic market and that takes time. we're not sitting idle and hopefully we will be able to engineer a presence in china
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that fits with our model, a multi-affiliate model where we integrate within the group largely autonomous investment themes which express what they do, irrespective of the asset china fored in chinese investors and to bring those to our clients around the world. it is long in the making -- making and we are focused on it. we have the luxury of being able to be a bit picky and choosy. what is your take on china overall? are we over concerned about it or under concerned? mike: long-term, they have the challenge of moving away from debt-financed growth and slowing down trend graphs. -- growth's.
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for the shorter term, we have seen stimulus so it is plausible that we see growth stabilize after this recent slowdown. in the short-term, some of the vulnerabilities particularly around the trade negotiations and deteriorating growth have pushed output a little bit that does not change the outer -- longer-term dynamics of getting it under control. francine: thank you so much. an hour. coming up next, we will look at euro markets. howard ward joins us, and we will talk brexit. ♪
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"all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast. ♪ tom: this morning, passengers are asking "is this a max?"
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singapore and australia will bar the troubled boeing jet. more than one third of the fleet is grounded. the faa searches for "conclusive evidence." prime minister may gets it right in strasburg except ireland says, wrong, there is no new deal. december and the 71 days of 2019, finding the courage to invest long-term, can i get out to christmas? this is bloomberg "surveillance ," live from headquarters in new york. , francine lacqua outside parliament headquarters. do you have any knowledge of where dup stands or when they will speak? francine: that will be a huge thing people want to know about
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because of the dup supports the deal, it may sway the tory membership within the conservative party. if they say they will not support it, some pro-brexiteers in theresa may's party may not vote for it. we are also expecting the attorney general to give us his u.k. canhether they get out of the backstop under certain circumstances and they may sway parliamentarians. tom: the financial world focused on brexit. much other news now. viviana: beginning in the united kingdom with theresa may theking a deal to revive terms of the divorce with the european union, but it is not clear if that is enough to win over parliament. last night, theresa may and jean claude juncker announced changes in the agreement having to do with the backstop agreement.
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more problems for borrowing following the crash -- boeing following the crash. lion air switched to airbus. jets crashed7 max in december and all 189 people on board were killed. australia joining south korea, mexico, and brazil in grounding the fleet. china is being noncommittal on whether xi jinping will join donald trump and a summit to finalize a trade deal. the question is whether xi andts the president enough are wary of putting him in a position where he might be .mbarrassed by president trump liberal democrats in congress do not agree with nancy pelosi's comments on impeachment.
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she does not want to impeach president trump unless there is bipartisan support. others say it is too soon to see whether there will be an attempt to remove the president from office. global news 24 hours a day on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. tom: equities, bonds, currencies, commodities, a focus on sterling and boeing as well. futures up eight, dow futures -22 now, showing that split we have got with a little bit of weight to boeing with a new slow. many other parts of boeing as well. market, the vix moving nicely.
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sterling flat out deteriorated over the next 40 minutes and the germany 10 year -- thank you to michael for being with us, from pimco, for the last hour. , and we wills out talk about it later, the center tendency of boeing, maybe some 1990's malaise, and a leg up over two standard deviations on boeing. that gives some perspective as well. on the green, francine? francine: theresa may struck a deal in the divorce from the european union but it is unclear whether she has done enough to win parliament's support. has she done enough? do he have an idea of which way the vote will go? has a betternly
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deal to present to parliament this evening. some of the legal language gives some assurances to the pro-brexit hardliners within her party who are concerned about being bound into the e u trade rules indefinitely. we are waiting for a key group and her party who is in a -- unlikely to announce a vote -- a view until this evening. that is an essential bloc that she will made to get this deal through desk need to get this deal through. they are waiting to see how the irish party feels about it. if all boxes are ticked, they may vote for. tom: there is three different documents. you, ourert like brexit team, have you seen the language? rosalind: i have not, but it is
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pretty dense, wound around legal issues which is why the ig deskbound around legal issues which is why the ig has had to bring in their own attorneys. enoughnt to see there is to see the u.k. will not be tied into a backstop arrangement and definitely. will likely general hold some sway within her party, so if he feels it is over the line, his words as a brexiteer may be enough. let's get another voice at westminster about brexit as the vote is tonight. ,e are joined by ian blackford leader of the scottish national party. a chance ofe have getting through this evening?
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that depend on what the dup and attorney general say? mr. blackford: fundamentally, this is the tory party and the dup by extension. the issue for theresa may, she has never tried to reach an accommodation across the house of commons. we have known over the course of the last few weeks that the dup and the erg can climb down. francine: what does that mean? are prediction is the vote does not go through? know,ackford: we do not but on the legal opinion i have seen, it suggests this does not change anything as far as the backstop is concerned and i'm pleased about that. the backstop is there because of a peace treaty in ireland to avoid a hard border. it is important we stay together on this. francine: i was briefed by people that helped draft it in
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my understanding is that the u.k. were always concerned if the e.u. were playing hardball, they had no way at of brexit. ifh the text, it would mean the e.u. is playing games they could revoke it. mr. blackford: it does not change the withdrawal agreement that still reads the u.k. does not have the unilateral right. francine: unless one party is unreasonable. mr. blackford: then you have to go to arbitration but that is based on the court. at the end of the day, this is a vote whether or not the dup and erg believe there is a ladder they can climb down. i hope the house of commons does reject it and i hope we reject no deal tomorrow. at the end of the day, it has to be about our communities and jobs. there is no such thing as a good brexit.
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the best deal is staying in the single market and customs union. , weany car manufacturers have lost the jobs. jobs have gone from london. this is not good news. when you look at the economists, and the expectations are on this deal that we are looking at roundabout a 4% reduction in gdp , twice the impact of the financial crisis, this is not good news and politics -- politicians have the obligation to protect jobs. back, he said he is looking for a reformation in the economy of the united kingdom. i am sure you disagree with that . as what we are really talking about -- is what we are really talking about scottish independence? determinedrd: we are
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scotland does not drive the european union out. there was a heavy remain vote in scotland. when i worked in the city i lived and worked in amsterdam and my son worked in the netherlands. are we taking -- we are taking away these automatic rights and we are not prepared for that to happen. i am calling for government to recognize the right for the people of scotland to recognize our own future and westminster should respect the mandate we have. andee ourselves as european we will not sit back and see our rights taken away. will you support a vote of no-confidence for government if theresa may loses the vote tonight? mr. blackford: yes. we need to see a couple things happen. the no confidence, we would welcome that. .t is about jobs
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as bill clinton once famously said, it is about the economy, stupid, and we need to protect our people. francine: ian blackford, thank you. coming up, we have plenty more from westminster and we speak exclusively to the former prime minister tony blair excludes -- at 5:00 p.m. this is bloomberg. ♪
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tom: bloomberg "surveillance," from london, on the green in front of westminster. it is just another vote, but no, it is not. francine and i have been focused
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on the dup of northern ireland, the statement from the irish government in dublin that they see no new deal. we want to turn to what is on everybody's mind, everyone that travels on an airplane, boeing. and weward is with us will talk to him about use of cash and what to do in a bull market, but we have to focus on what you do with a troubled blue-chip. do you own shares of boeing? howard: we do. we are underweight boeing our test versus our index. -- underweight growing versus our index. tom: we will do apple later, depending on news flow. note the headlines coming out of the united kingdom. this is boeing back 30 years, howard ward in his youth.
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up we go with remarkable stability, maybe a blue-chip malaise right there and there. can you use this opportunity to reposition or du have to wait for a to -- sender -- do you have to wait for a center tendency? howard: this is one of america's great companies, no doubt. i do not think there is any need to rush in and go back to full weight or overweight. because theour side global economic growth numbers are coming down, and that is not necessarily good for bowing. -- good for bowing. -- boeing. we have to learn more about this crash, was bowing at fault -- boeing at fault? tom: francine?
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francine: if there was something, if this particular model where to be discontinued or something like that, which at this point as 100 perspective -- 100% speculation, what would cause you to cut your exposure? howard: i think the issues confronting this plane which have been changes in the software so that when a plane in this case possibly took off, if the software senses the altitude was climbing too fast, it pushes the nose down. disengage have to that system in order to gain control of the aircraft manually. the problem with the lion air crash last year is they did not do that. i would have thought the pilots had all been well trained that if that kind of a problem did
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surface, take control of the aircraft. we don't know if that happened or not. i have a lot of confidence in boeing. i will give them the benefit of the doubt. there might be some issue of education of the pilots with this new system. i do not think this will be a game changer for bowing -- boeing. tom: we will come back with howard ward. i want to note united kingdom , mr.ords -- headlines redwood saying he cannot vote for this deal as he has reviewed it, cannot support the brexit deal. an important conversation on wall street and global wall street with the chief executive officer of the royal bank of canada, jonathan ferro in the
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next hour. this is bloomberg. ♪
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♪ this is bloomberg "surveillance." as cutting thee ceos bonus by 19%. they posted a surprise decline in trading revenue and announced cost cuts. they gave up key goals. 2.6 after socgen paid about
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alien dollars last year to settle u.s. investigations. uber will payy -- $20 million to the state of california. whether turned on employees were for britain to purchase paid in class-action lawsuits. allianz thear carlos ghosn built -- alliance that carlos ghosn built are moving on without him. they have created a new government structure to present -- prevent the financial actions as happened. approach on ain true consensus basis. tom: thank you so much. if you want to get from perth,
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australia to sydney, australia, there is qantas. on virgin you are going to take a 737 except maybe today it will not be. us now from sydney, australia, david, thank you for your recent work on boeing. how unique is singapore and fromalia banning 737 max's their airspace? are they the vanguard from everyone else -- for everyone else or the one off? thed: roughly one third of 737 max fleet is suspended from operation. we had the chinese and indonesian regulators banning the flights there and now singapore and australia joining
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them. a couple of individual airlines, aeromexico and east airline in credit -- korea are also joining them. these do not necessarily mean that turns into a global shutdown, but each time a regulator adds weight to the pile, it increases pressure on the faa. voteyou do not take a slow to china out of sydney. mean for someone like qantas? david: qantas is not offering any 737 max at this stage. they offer a substantial 737 fleet. in particular areas of the world , china is one of the world's biggest domestic aviation markets and they are
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increasingly operating 737 max. they are in the top 10 operators. for them, it seems significant. they are using these planes every day and will have to move them on to other planes. we saw with the dreamliner, the fire,nian -- lithium ion this can be disruptive if this happens for airlines, some of which can be pretty short of cash, including the region air. -- norwegian air. francine: is the plane safe or not? when do we find out? that is ratherg difficult about the situation is we simply do not know. questionlking about a of whether the faa should be grounding this aircraft. dc-10evious example, the
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in the 1970's and the 787. argued the dreamliner grounding was a little excessive and the faa jumped the gun. others would say that was exactly the right thing to do. notice.nk you, on short cannot say enough about his work .n boeing in the last few days coming up, our political interview of the day, how about a liberal democrat from michigan? this is bloomberg. ♪ this isn't just any moving day.
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simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today. all of you. how you live, what you love. that's what inspired us to create america's most advanced internet. internet that puts you in charge. that protects what's important. it handles everything, and reaches everywhere. this is beyond wifi, this is xfi. simple. easy. awesome. xfinity, the future of awesome. ♪ "surveillance," we welcome all of you worldwide, francine lacqua in front of the vote in westminster. . am tom keene
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sterling much stronger off the prime minister's trip to strasburg. inurge on daily weakness sterling, they are down a level. now, your first word news. viviana: theresa may has her new brexit deal. what is not certain is whether she has the backing of parliament. vote on changes aimed at preventing a hard irish border. last night she and jean claude juncker announced the changes and he say it is this deal or the u.k. may never leave. a growing crisis of confidence in boeing 737 maxes after a crash in ethiopia. many are grounding its fleet. one of the biggest buyers of the fleet is lion air which may switch to airbus.
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lion air had the first 737 max to crash and the airline is refusing to take delivery of more planes. the u.s. is pulling remaining staff from the venezuelan embassy, mike pompeo citing the deteriorating situation in the presence of american personnel has become a constraint on u.s. policy. the public its and democrats in congo -- publicans and democrats -- republicans and democrats are aswing support for nato president trump questions their usefulness. republican mitch mcconnell is supporting pelosi's move. global news 24 hours a day on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. tom: we had a huge response when the gentleman from the fifth district of michigan -- this is
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b -- dan kildeem and his family has held political court for many years. we are thrilled the democratic liberal from the fifth district joins us. there is a new kind of liberal, a democratic-socialist. if all of them parachuting in to flint, michigan, will they be greeted with a certain glow? rep. kildee: it is hard to say. of all the democratic socialists in congress, they could probably fill one booth. there is an over emphasis on a handful of new members. they do not define the party. bring out an important perspective, but do not
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represent the fullness of the new membership. we have 16 new members and most of them have national security backgrounds. ago, president district, in your secretary clinton 49%. are the democrats at risk of doing another democratic vote? rep. kildee: we have to be aware of the risk we could fall victim to. it is important to talk about kitchen table economic issues. if we talk about retirement security and the cost of education, issues that families talk about, then we will be ok. diverted into focusing all our attention on the investigations into the president or what do we do when the mueller report lands, or other large issues about political philosophy and not the
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kinds of things that people think about when talking to their own families, then i think we could get a problem. that was a problem we saw in 2016. we were not addressing issues that family thinks about. carville, ham and jim messina writing dish him and jim messina writing yesterday -- him and jim mussina writing what do you need to defeat president trump? him ands budget defeat put an and felt around his ankle? rep. kildee: it would be helpful if we cooked -- if we put a fundamental focus. the kinds of cuts, just thinking about my own region, the great rates region, the president -- great lakes region, the president's cuts of the great
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lakes restoration initiative, that is an issue for us in michigan. those are fighting words. when we point out the thing we depend on the most, the health of the great lakes is a low priority for this president, we focus on the differences between the budget priorities we present and those presented by the president. that is a winning issue for us. francine: how is your democratic party changing? we are hearing more proposals turning the democrats to the left, to socialism. is this a new democratic party? rep. kildee: it is a bigger democratic party as represented in congress, which means more diverse views. minority, we the had the smallest minority we have had in half a century or so or more, we did not have
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diversity of thought. we had 189 districts in that year and now we have 232. that will mean real debate about which direction we go. i do not think we will assume the loudest voices and those presenting new ideas will rule the day when it comes to us making policy. francine: congressman, how do you win the 2020 elections, going to the left or staying in the center? rep. kildee: sometimes these definitions fail a bit, because a lot of people would say a strong economic message investing in education and infrastructure is a left-leaning agenda because it is more government involvement in growing our economy. i believe we can take the middle path, because i am a progressive . i have no hesitation in saying
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that. there is a difference between the ideology that you bring to the conversation and your willingness to apply those ideas and get something done, rather than congratulate yourself on how righteous you are. tom: you are not a progressive, you are a liberal just like your uncle was. what are you going to do about the great lakes water? losewer says, will you though water level debate, the algae thing, the ability to clean up the carpet? rep. kildee: when these efforts have been under attack, we have dealt with it in a bipartisan way. i believe we will again. future is difficult. we will lose can -- congressional seats in the great lakes region. the coming years, we worry about because of the willingness to
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invest in the great lakes region is not -- tom: we have much more coming up. the story of brexit unfolding in front of westminster. in america, and a number of conversations. we do that with the united states secretary energy -- secretary of energy, rick perry. this is bloomberg. ♪
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♪ viviana: this is bloomberg "surveillance." tweets heis defending sent last month about tesla.
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the sec wants him held in contempt saying he is violating an order with the posts. was replaced as tesla's chairman over earlier tweets. at&t is putting profits ahead of subscriber growth when it comes to directv, it's online tv service. they will see a $10 monthly increase. the service is turning into a rivalingve business sling tv and hulu. patentg at a microsoft lawsuit, terry kuo accusing them of a wrongful attempt to extract software. not think about how to work harder.
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they are thinking about how their money came during the pc days. they are not thinking about how they should compete against android. this is between microsoft and google, a war in the u.s., and now they do not dare fight. viviana: another foxconn unit builds the iphone for apple. morgan stanley cut its price target for tesla. $283 and is now $260. tom: thank you so much. chart, every 32 days we must do an apple chart. we are incredibly qualified to have with us howard apple. what are you doing with apple? is this the mother of all buying opportunities? so, becausethink this is the year where apple's
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earnings will be flat or down slightly, and back to double-digit growth next year. apple does have some growth challenges ahead of it in terms of the iphone market share overseas and domestically. heady days of apple being a such aswealth creator displayed in that chart where it became the most valuable in the world, are a thing of the past. the returns going forward will be much more average. so,ink the stock at $175 or it can get back over $200. changes, thisope is a critical question -- bring up the single best chart -- we are doing this with howard apple, i love saying that. you are telling me the slope will change.
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do they change and deploy evermore free cash flow? buying they are always back a ton of stock. they will raise the dividend next month. there is always a big question about apple, will they make a big acquisition which could result in a higher multiple on the share price? it does not get a high multiple becauset does presently 70% of profit is tied up in the iphone. francine: howard, let me jump in. we are getting breaking news on brexit. and is the attorney general we are finding out he will issue a statement on the legality of of whatl implications was agreed to last night in strasburg. that statement will be to the house of commons at 12:30 u.k. time, about two hours from now.
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that will give an indication of whether the tory party or certain factions will vote for the deal. it goes back to whether unilaterally they could go back on the backstop. this would be through arbitration. tom: this is all being played withn twitter in real-time the headline off the bloomberg as well. let's just try to cram brexit in. there must be a huge opportunity in european and broader angler section multinationals. -- anglo-saxonon multinationals. howard: i have to comment on the global steam, especially europe. it is not just the u.k., germany, france, it is weakening. if you pull up the global pmi, a
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great leading indicator for earnings and stock prices, it 2017 and it has fallen in 13 of the last 14 months. it is a pretty negative slope. i am not sure i could ski down age, andigh age, -- my above the crucial level where we start to think about contracting economies. gettingprised we are the kind of spirited stock market we have right now in the face of this downward sloping pmi. tom: let me show this chart. pmi is a jpmorgan global and as howard apple says, 56 on it. here, and weup reverse the back to 2016, quite
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a reversal. francine: we will get back to howard. coming up, plenty more on brexit. we are at westminster the entire day. andrea jenkins joins us. this is bloomberg. ♪
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♪ francine: this is bloomberg "surveillance," francine lacqua outside westminster in london. advocate and an conservative member of parliament, andrea jenkyns, as we count down to the vote. thank you so much for speaking to us. has what theresa may negotiated with jean claude juncker been enough to win your vote? howard: i am keeping open mind -- ms. jenkyns: i am keeping open-minded.
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eight brexiteer lawyer mp's who are looking at it. i would like to hear their thighs. my initial reaction is it is the fact that it does not remove the .isk, only limits the risk it is the issue about independent arbitration coming up, deciding our country's future. for me, that is not brexit. francine: are you uneasy with the fact that this is a political decision and now everything depends on legal advice? my gut feeling is it does not seem right, but i want to look at the legal advice. let's not take away the fact it is not a good which agreement for our country in a way. restriction and
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several issues with it, the it harderion, makes to do deals with the likes of america, and i have concerns about the withdrawal agreement. on top of that, this will be the blueprint of our final deal and we have given so many concessions early on. the final deal will not look good. francine: this is the same thing i heard three or four months ago. if the deal does not go through, what happens? ms. jenkyns: i think it is 50/50. if it gets voted down, there is still a few weeks left. the e.u. said they were not bail greece out and in the last 12 hours they came up with their package. we know they are likely to come up with something in the last two weeks. francine: brussels is saying
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u.k.do not trust politicians because they keep changing the goal posts. ms. jenkyns: how do you -- i can understand how they are feeling. we have politicians, my stand brexit wherea pure we take back control of our laws and money. others want a second referendum and others want to remain in the customs union and single market. there are same -- several voices saying different things. there are solutions out there. francine: another election? ms. jenkyns: when david davis it the brexit secretary, just needed extending to northern ireland. the e.u. will offer it, but there is also the compromise. as a brexiteer, i am not fully
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happy because it means extending the transition period, that i would take that rather than this disastrous withdrawal agreement. francine: how many do you think will vote against the deal today? ms. jenkyns: i am not good at making predictions such as that. i would have thought the prime minister would have been gone months ago. it is probably 50/50 whether it goes through. francine: if the tory party were unable to negotiate this agreement, as it not time to give it to someone else to try to negotiate with the e.u.? ms. jenkyns: it is not about the tory party. look at the arithmetic in parliament. it is very remain focused. it does not represent what the country voted, which is the difficulty. ideally, we need a fresher approach with a conservative prime minister two-putt
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britain's interest first. britain's interest first. had the prime minister been mptening, a bigger chunk of 's voted against her last time. even with some tweaks and compromise, if she listened she would get it. francine: what are the chances of a no deal brexit? ms. jenkyns: i know parliament does not want it, but even if they vote on it does not take it off the table entirely. we could see article 50 extended to the beginning of july but then the new european parliament starts so we would need to put candidates up. that would be the latest they might extend it. jenkyns, thanka
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you so much, conservative member of parliament. , aing up later this morning conversation with the royal bank of canada chief executive at 7:00 in new york, 11:00 in london. we will have more interviews in westminster. tony blair around 5:00 p.m. london time. this is bloomberg. ♪
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david: giving it another go.
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theresa may gets a new joint statement out of brussels and a trip to parliament for a vote on whether it's enough to seal the deal. troubled skies. more countries and airlines ground the boeing 737 max 8. the u.s. is now the powerhouse fox,l production says matt ceo of conocophillips. welcome to "bloomberg daybreak." i'm david westin in new york. alix steel is in houston for that big event. that we are the powerhouse. becomes ifssue then you have the u.s. being the powerhouse of production, that will weigh on the oil price eventually. what is that mean for the economy and inflation? david: at

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