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tv   Bloomberg Markets European Open  Bloomberg  March 14, 2019 2:30am-4:00am EDT

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the problem is that the lunatics appeared to have taken over the asylum. does not have a functioning government and i cannot answer your question about what is coming, i have no idea. theresa may has no idea what is coming tomorrow. >> that was the former bank of england policymaker talking earlier today with regards to the vote. calling it the way he sees it. the lunatics are in charge of a technical asylum. perhaps it is this.
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theresa may is holding this with across parliament. long delay, it could be and lengthy. she could not even come back with her own deal a third time. >> is not for us to call anybody lunatics. one of the definitions of madness is to keep doing the same thing and expecting different results. theresa may hoping she could ring heard deal a third time to parliament. is there any prospect of that going through? if there was, there would be a short technical extension. if not, there could be a long delay. come a they ruled out no deal. that is not what they want, but it is not clear what lawmakers do want. votes,omes down to those how binding they are and the legality.
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sterling kissed a nine-month high. evident, 500ield bits. markets are poised for some sort of softer resolution. >> even though we are seeing softness in cable. that might he a reality check. high, wenine-month trade at 132. all options still on the table. no deal still remains the default if there is an alternative the u.k. and eu can agree to. we heard from chancellor hammond yesterday. does he want a softer view of brexit than theresa may? >> breaking news on the retail side. they are raising their asset disposal plan 2.5 billion euros.
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they are proposing a dividend of three point -- three and an eight. raising their plan to at least 2.5 billion by 2020 and eyeing 20% trading profit growth between now and 2021. at casino in france. let's get into the markets. what exactly is going on? our partner in mumbai. annmarie hordern. have come roaring back. you have got a little risk. where do we stand? where does modi stand?
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been talking to a lot of investors as well as analysts. with markets at this point, factoring in the return of the as far as the elections go. we have seen so much strength over the past four days. there is a lot of strength holding into the system at this point in time. there is a little bit of a positive after the gains we have seen. the banking index continues to move from strength to strength. the indian rupee, which has also strengthened substantially, currently trading at 69.7. there is an improvement in totiment when it comes
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markets. >> the rest of the region looking a little mixed as investors digesting data out of china. how was the risk appetite looking. we are not seen strength in the yen. it is mixed across asia. 0.2%.i 300, down nearly you are seeing this risk. huge dated up out of china. retail sales in line. jobless rate rose. domestic production was on a tear. aluminum producers, turning out record amounts. picking up a key driver of demand. the property sector. iron or up 2.5%. the japanese yen lowest.
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british pound at the top. hovering at one spot 32. advising investors not to chase the rally. this is an inverse reaction. one month high -- volatility. some brexit jitters you can tell from this chart. >> thank you very much. annmarie hordern in london. great roundup. let's talk about the u.s.. they have changed course on grounding the 737 max. --s comes as new decisions
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evidence came. this was a major low to boeing. as country after country, announcing they were barring the aircraft from flying. let's go to stephen engle. he joins us. why this about-face? or behind the curve? >> a little bit of both. it is all moved now because the faa, after what they saw, other regulators grounding the 737 max program. the faa following suit. daniel elwell saying it became
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clear to all parties the track well --light was very very close and behaved similar to the lion air flight. crushing in indonesia. there have been long speculated connections. i had a conversation with a triple seven pilot who has trained. he says they were very similar and perhaps had the same problem. the faa is not determining it is exactly the same cause, but there is enough evidence to ground it until there is more conclusive evidence. be safe than sorry. stephen engle in hong kong. ben ritchie still with us. you look at equities, talk to me about whether you are concerned
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about any of the suppliers given bad news racks up. >> the supply chain is long. clearly those companies are going to have some issues. some of the companies most exposed, the same sort of comments around the supply chain. being balanced in terms of their risk appraisal. >> i want to get a sense of where you are. houses saying we are at a tug-of-war moment. to buy some i want options on the dax.
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this may be one of those pivotal moments. central-bank policy and words could also be an important driver for equities in europe. would you agree with that and skew with those sectors? know would be the straightforward answer. we are quite early in the slow down. these. see thanks are responding to events rather than driving them. it comes down to what we are seeing out of china and the u.s.. i am pretty cautious. a lot of what is going on is out of his hands to some degree. you have political instability. macroeconomic drop
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which is not helpful. that is a challenging backdrop theirlicy at the end of policy tenure. the options are limited. options that view, the could be seen as a little bit limited for you. do you think you position defensively around the sectors? >> we are looking at distances that can grow through a challenging environment. europe has been a miserable place for the last 10 years. we have had the occasional blip upward. normally we are traded in a modest corridor. you need to find the companies who can control our own destiny. that is very important. a cyclical sectors like health care, technology.
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the drivers are structural rather than technical. based on a global trend. the shift to digital. those trends are going to be there regardless of what happens tomorrow draghi's -- to mario draghi's policy. >> how about capex? how does that work in terms of the european trade? companies thate are exposed to the resilience of the global consumer. ones exposed to a faster growing trend, active cosmetics. or the proliferation of small manufacturers to bring likely to doat are
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relatively ok even in a tough environment and can benefit from tailwinds. are positioning ourselves. and terms of industrial capex, we are cautious. certainly in terms of businesses dependent on the short cycle. >> talk to me more about financials. it might be months before we work out the true power. in your mind, does that make banks more attractive or less attractive or are you looking at something totally different? on banks.cautious we only have one in our european portfolio. hedging, where we can find good value companies that would benefit. you get that for free on the
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edge. mario draghi confirmed it is going to be more miserable for longer. it takes away the tail risk. does is ito perpetuates the cycle of excess. but it iss stability not good for profitability. >> taking it into one other sector. and to thexury higher and, do you want more exposure to the likes of the carmakers hard luxury? or want to be more on the consumer? >> i would be desperate for to
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be angled toward the hard luxury side. even if you are looking at some inning like swatch, the fixed costs make ebola toll. rather than the more brand own writtenhich we allowing those businesses to be resilient. that is why we prefer that segment of the market. >> great conversation. staying with us, thank you so much. let's get the bloomberg first word news with debra mao. >> brexit looks set for delay, seeking aners extension. that is after the house of commons rejected leaving the eu without a deal. despite the government ordering
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on thekeep a no deal table, 13 ministers defied her. delay, it is still set to leave march 29. why ask there will need to be a much longer extension to article 15. it would undoubtedly were wire united kingdom to hold european parliament elections. i -- i do not think that would be the right outcome. >> the u.s. senate has voted to remove u.s. support for the saudi led conflict in yemen. some republicans joined democrats to rebuke the president. the resolution would direct the president to remove u.s.
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military support within 30 days. president trump has already threatened to veto. set to berke is preparing to announce he is running for the democratic presidential nomination. followinga national during his unsuccessful bid to unseat senator ted cruz. global news 24 hours a day. this is bloomberg. >> thank you very much. debra mao. we are live at the jpmorgan markets event and parents -- in paris. we will speak with joyce chiang as well as daniel pinto. uecker's -- the
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former ecb president. we also speak to jamie dimon. ejra.-- n >> tune on to bloomberg radio when you are driving to work. i will be there with a team from 8:00 a.m.. this is bloomberg.
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>> this is bloomberg daybreak: europe. let's get the bloomberg business flash with debra mao.
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instagramk says it's platform is now back up. they have been seeing one of the and persistent system outages with users unable to access the main social network. facebook says it is investigating and considering the possibility of refunds for advertisers. brookfield asset management is --ing a majority stake in they will take a 62% stake in oaktree. oak trees howard marks will join me board. both firms will continue to be run independently. said to be in advanced discussions to sell a $1 billion self driving car unit. the deal with a consortium of investors would value the business between
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5-10,000,000,000 dollars. they plan to retain a stake in the unit's. thank you very much. let's take a look at how your trade day should be set up. the u.k. house of commons requests a delay to article 50. >> how long will that be? that is the question. atla unveils an electric car its los angeles design studio. it is said to be 10% larger than model three. for anwant to watch out update for the u.s. economy. 2:00 p.m., the u.s. home sales in the u.s. of america. let's stick with the american
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economy. investment is the officer. there is an article on the bloomberg saying you are getting spoiled like a frog. 15 is a magical important resistance level. what needs to happen in u.s. policy to flip that over? >> i think you need to say -- see one of two things. a weakening of monetary policy. or we need to start to see earnings accelerate. you're are more likely to see the former than the latter.
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currently, my view is the global backdrop weakening. we are either going to see stimulus that is going to some or the global economy. currently, investors are taking all the bad news as good news. whetherig question is they see the global economy bottoming out. it sounds like you are not in that camp. i was talking about the facts equities have underperformed the rest of the world. is that a trend you expect to continue and perhaps be a little more cautious? recovered pretty much above where they were. in q4.loff to go even higher than that, you need a discount rate or earnings changing. it is unlikely equities are going to outperform the rest of
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the world. you have ketchup trades. if investors want to be speculating on that economy. -- recovery. chart, in thee u.s. trading just below 2%. the highest since last may. i want to understand how you invest around inflation if at all. perhapse less than effusive. what does that tell you? what is going on? from a stock perspective, there are couple of things to look for. input costs and pricing. seen increasing wage pressure, raw material pressure. margins coming under pressure as a result. better position to
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maintain profitability. that will be increasingly important. >> thank you, ben richie. this is bloomberg. ♪
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manus: good morning from dubai. i'm manus cranny. nejra: live from westminster, i am nejra cehic. off theo deal brexit is table. mp's will decide later whether to request a delay. industrial output in china has the worst start to the year in a decade. how will policymakers respond? u.s. regulators finally ground boeing's top-selling 737 max jet, a major blow to the playmaker that has lost billions -- plane-maker that has lost
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billions this week. and, don't miss our exclusive interview with j.p. morgan ceo , daniel pinto and former ecb president jean-claude trichet. good morning, and welcome to "daybreak europe." just breaking some lines coming through on airbus. ng willl and xi jinpi discuss a deal at the end of march, according to a french official seeing positive signals for the airbus china deal. the ethiopia prime minister will also discuss an airbus deal. i am still at
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westminster to carry on the brexit story. manus: quite precedent, these -- prescient, these lines from macron and airbus. no doubt, boeing, the major story in the market. we saw lionair, and what happens next? the markets are trying to chew over what happens next in the brexit debate. some opinion pieces, we know what we don't want, but there's no clear signal what the house behind you does want. so what, sterling gives a nine-month high, and then gives it back. nejra: exactly. parliament voted against no deal resoundingly, so they know they don't want a no deal, but that is still the default option unless there's a new agreement in place that both he u.k. and e.u. can agree to. today parliament votes on a possible extension, but the
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question is how long? theresa may still says she would want to bring video back by march 20, which could give us a very short, technical extension. if not, it could be a very long extension. is that enough to scare the brexiteers at this point? and if you get the long extension, the possibility of a second referendum starts to rear its head. manus: of course, you managed to define insanity as doing the same thing over and over, expecting a different outcome. let's talk about bond markets, which are never insane. p's, u.s. treasuries. dollar-yen a little more risk-on. offequity markets, s&p 500 the four-month high you saw yesterday, a little bit of give back. bunds down 15 pips.
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the markets at the moment are trying to debate what happens next with policy in europe and across the u.s. we are seeing little bit of inflation hedging perhaps in the u.s., even though cpi didn't exactly rocket yesterday. i got firedl you, up by the technicals in the s&p 500 yesterday. it got to a four-month high, but we also closed above 2800, a key level. is the key level they 2810, andst short of, 18 slightly softer today in futures. 40 futures not doing much, after a mixed session in asia. cable after a nine-month high yesterday, in the red today. juliette saly in singapore has
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more on the markets in asia. i talked about the mixed picture. take us through the details. mixed to theittle downside. certainly seeing china close the session weaker, csi 300 down 0.7%. notdata from china today, as bad as many feared, and in fact we saw property investment rising more than 11%, but this comingity, and pboc through to say they are very much wanting what they call abnormal fluctuations, a lot of activity coming through in chinese markets. today, the index hit hard again after yesterday's 4.5% drop. session, had a good and japan closed out flat as well. we have been watching movement in the yen ahead of the boj decision. a look at other currencies. aussie, always a proxy in the
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today,data dump, weaker with weakness in the offshore to thei, down 0.5%, dollar at 6.0724. the airlines index in again because of what we've been watching in the wake of the faa grounding the max 737. analysts say you could see upside in airlines, particularly in china, that had a lot of these airlines on order, because they will scramble to readjust schedules, which could lead to pricier tickets, boosting their bottom line. manus: thank you very much. juliette saly with the latest on the asian market roundup. let's get back to brexit. the house of commons rejected a no deal brexit by a majority of 43. the decision opens the way for the split to be delayed until
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the government can find its path to an orderly divorce. parliament will vote on whether to postpone brexit, which is just over two weeks away. theresa may is expected to ask the e.u. for a two month extension. >> there would need to be a much longer extension to article 50, which would undoubtedly require the united kingdom to hold european parliament elections. i, i -- i do not think that would be the right outcome. manus: joining us now, kathryn davis, portfolio manager of global, international equities at schroders. so, a possible vote for an extension this evening. scenario, butod would a short extension or long extension be better for you?
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what's a better outcome for schroders' positioning? catherine: good morning, manus, from a cold, wet, quite noisy westminster. the worst thing about brexit is that i can't be doing this from the studio. . regarding the delay, a longer delay would make things more complicated, because you get into the european elections, and we really want clarity as soon as possible. i trylobal fund manager, not to concern myself too much with the noise in u.k. politics, and we are looking for stocks that are outperforming everywhere in the world. the interesting thing about the u.k. market, it feels under owned by global managers at the moment, which could be an opportunity. nejra: i totally feel your pain sitting out here. [laughter] we appreciate you coming down here. talk about exposure to the u.k. market, other than valuation and
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it being under owned. do you also like the defensive nature of the u.k. market at the moment, given your view on global growth might be a bit cautious? katherine: as you know, most of the u.k., the ftse 100 is more gearedl, much towards global growth than the so global growth is what i spend most of my time thinking about. a relatively cautious view on the world this year. interestingly,t he last time i talked to you was on christmas eve, the absolute nadir of markets. we have seen a sharp recovery since then, supported by monetary easing, more fiscal support around the world, and that left us in this awkward situation where the outlook for growth is relatively benign, but the valuations are no longer as interesting as they were a couple months ago. manus: in a relative sense, u.k.
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markets underperformed country cousins in the u.s. and europe. goldman has a big note this morning about the dividend for sterling, 85 down to 80 on euro-sterling. is it too early to run a slide rule across the ftse 250 where the dividend opportunities are? the builders? could it be government does something, about brexit in the next two to three years? 250 is wheree ftse there would be more opportunities if the domestic situation stabilizes. as a level manager, it's a very small part of my benchmark, and therein lies the opportunity. a a lot of global managers have dismissed the u.k. in the last few years as just being too hard, and we could get
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improvement if we get some clarification in the next couple months. nejra: as you take the global view, i asked whether you liked the defensive nature of some u.k. equities earlier. looking at the big companies, with global exposure, what sectors would you be looking at in terms of parts of global growth or the parts of the globe regionally where the u.k. companies might have exposure to? in other words, miners, health care, consumer stocks, maybe even financials? katherine: looking more by style than by country. at this very late point in the cycle, my preference is for quality, looking for companies with secular growth stories, strong balance sheets. probably biased more toward defensive, although cyclicals are very cheap at the moment. in this environment where valuations are not screamingly cheap, and the outlook is quite mixed, we are trying to find
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idiosyncratic, company-specific stories, turnarounds. nejra: in the u.s. is -- u.k. specifically? katherine: globally. with regard to geographic exposure, i still like emerging markets, with dollar strength not likely to be as big of an issue this year, and rates potentially easing in several emerging markets, there is more interesting, more interest there , and a number of u.k. multinationals have big exposure to those emerging markets, in consumer goods, for example. manus: katherine, thank you so much. therinene davidson -- ka schroders stays with us. debra mao -- finally grounded 737 max planes after new data
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suggest a link to the other crash in indonesia involving the same model. flight tracking data and new evidence raises suspicions about a safety feature on the max. more than 40 nations have grounded the boeing jet. economic slowdown deepened in the first two months of the year, with unemployment rising sharply. the jobless rate rose to 5.3%, up from 4.9% in december, the highest level in two years. industrial output saw its worst start to a year since 2009, growing 5.3% from one year earlier. investment in property rose, reaching the highest level since 2014. paul manafort has been charged by new york state prosecutors with residential mortgage fraud, conspiracy and falsifying business records, raising the thirdbility of a criminal conviction for the
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one-time donald trump campaign manager. it came just minutes after prison term was extended to seven and a half years. global news 20 for hours a day, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. nejra? nejra: debra mao in hong kong. thank you so much. howy we are asking on mliv, far could the s&p 500 rise or fall after testing the triple top, the 2815 level, which we closed shy of but stayed above 2800, a four-month high. you can join the debate, mliv on your bloomberg. manus: coming up on "bloomberg tv," it is all the makers of ris., ready to go in pai a host of exclusives.
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theresearch chair, president of the bank, and jean-claude trichet, former ecb president, as well as the man himself, jamie dimon. don't miss those exclusive interviews throughout the day. ♪
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♪ we will be issuing an emergency order of prohibition to ground all flights of the 737 x 9, and planesa
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associated with that line. >> my concern here is the transparency on aviation safety, and the faa's ability to oversee a company as large as boeing, to ensure the safety of the flying public. those are questions that are in doubt now. >> these are not pleasant conversations, but they are conversations that need to take place, decisions that need to be made. >> if you ground the airplane, some money will be lost and they will be some inconvenience. neither one of those is an earth shattering event, and no airline will fly a plane it doesn't think is safe just to avoid losing a little money. >> i think everyone is taking a reasonable approach to this, which is to wait and find out what the results of the investigation are. >> i think what's going to happen, you ground the airplanes, boeing has a software fix smaller airlines can deal with, and back in the skies
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within two weeks. nejra: some of our guests across bloomberg television on the latest, as u.s. has granted the boeing 737 max. this is "bloomberg daybreak europe." cehic in westminster covering brexit. manus: and manus cranny here in bloomberg middle eastern head quarters in dubai. the s&p futures are kissing a four-month high and trading back. dollar slightly better this morning. market.of unease in the cable, higher yesterday and then back. they took no deal brexit off the table for now, but will they get an extension, and what is the price? nejra? nejra: and how long would the extension be? let's look at european equity futures.
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at the top of the hour pretty much unchanged around ftse, cac, dax futures. not much toures, get excited about. oil teased a four-month high yesterday, and wti still above $50 a barrel, rising 3.9% in the last three sessions. highest of injuries the u.s. since november. dollar-yan on the front foot as well, so even if a touch of risk-off comes through, mixed data out of china, the yen not gaining today with dollar strength. debra mao has the bloomberg business flash in hong kong. is canceling aen sale of its truck division, saying they need to wait for a better market environment. it could have been the largest ipo in europe this year. it has been the slowest start
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for european ipo markets since the financial crisis. french supermarket operator casino says it is aiming to sell another one billion euros of assets. the retailer made progress in reducing the debt pile, after short-sellers like muddy waters targeted the stock on speculation the company borrowed too much. full-year trading profit rose in line with estimates. wei has been dealt a new blow, with german intelligence saying it is not a trustworthy partner to build the country's 5g network. lawmakers in berlin were told past security events involving huawei are part of the reason for review. auctioning off 5g licenses in the country will start next week. that's your bloomberg business flash. nejra: debra mao in hong kong. thank you. the world economy is the rocky estate has been since the financial crisis, but there are those who believe the current slowdown will be short-lived. economists at bloomberg,
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deutsche bank and morgan stanley think the slide will bottom at this quarter or next before an acceleration later in the year. katherine davidson from schroders is still with us. that is the question, whether we are bottoming out on the global economy, and looking at inflation, wage growth is something you are focusing on. is that providing a risk to global equities? katherine: that is a tale risk at this point, because the consensus view is clearly no inflation pressure in the economy globally. so even in the u.s., where wage inflation has run at a higher pace, there hasn't been the feeding through the core inflation yet. but looking at analyst forecasts, they talk about companies having pricing power and expecting to pass them on with a lag. if that is true, the wages will start to feedthrough to pricing. even in europe, where it feels there is slack in the economy, we are seeing wage pressure across the continent.
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spain raised its minimum wage by a massive 22% this year, putting a lot of pressure on corporates, especially in a low inflationary environment. to diggingh takes us into a couple of these markets. let's circle back to the u.s. you talk about earnings, and say earnings revisions are still negative for the first quarter in the u.s. but you make a point that that's the first time we saw a slippage in three years. does that get worse from here, or do we bottom out? katherine: negative earnings in the first quarter, as you say, unusual environment in the u.s., and i guess some of that will be blamed on the impact of the shutdown, so we have to wait until the second or third quarter for a clearer picture. i do have concerns heading into the second half, because a lot of companies we are seeing are
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giving very back end-loaded guidance, and it's not clear how much visibility they have actually got, or if they are relying on earnings growth in the second half. i think that will be the proof point, and if growth doesn't come through there, it certainly adds a downside risk. nejra: and how much support can the fed put give u.s. equities at the moment? katherine: that has been the big with, supporting the rally liquidity conditions. but longer-term, it is quite a worrying sign for the u.s. and the global economy, that so data such aening terrible job of derailing the economic recovery in the fourth quarter and that the fed felt the need to step away so quickly. that takes the question, what happens if we get more inflationary pressure, affecting the power to start to tighten. on the other hand, if we get more recessionary indicators anywhere in the world, what can
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monetary policy do? just pushing on a string at this point. you have the mliv question of the day, so no pressure. how far could the s&p 500 rise or fall, after testing the triple-top, 2850? what do you reckon? katherine: well, that is a tough question. [laughter] i don't spend that much time thinking about the level of the overall markets, to be honest. i am more interested in the stock level fundamentals, trying to find the stocks that are underpriced, that still have growth. as i say, i probably see more downside than upside risk to the s&p over the remainder of the year, but we could get this effect in the next few months, because growth has been quite weak, there's a sense that there's a lot of who haven't participated in the recent
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rally, which could push the s&p up. nejra: a lot riding on the second half recovery, but visibility is low. thank you, katherine davidson, portfolio manager of schroders. great to have you with us. this is bloomberg. ♪
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anna: welcome to bloomberg markets. live alongside matt miller in berlin. matt: today, they say things will get better. asia trade mixes as china slows -- shows signs of slowing down. the cash rate is less than 30 minutes away. ♪ anna: expect delays, u.k.
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lawmakers vote on a brexit extension after ruling out no deal. sterling sits after hitting its highest level since june 2018. the u.s. bans flights of the boeing 737 after regulators find linking crashes ethiopia and indonesia. of recovery, china's industrial output has the worst start to a year in a decade. but real estate investment jumps. will policymakers a stick to their plan to stimulus measures? matt: less than an hour away from the start of cash trading. take a look at the pound, what an amazing jump. we were down at 1.3 on monday afternoon and came up to almost 34e .34 -- 1. .
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really surging as parliament took a no deal off the table. it could still happen by accident. trading atcuda 1.3286 -- right now, trading at 1.3286. mixed trade in asia turned lower into the close. most european index futures are also pointing down this morning drops, but similar drops of the cac and ftse futures down .2%. from the jpmorgan markets conference that, don't miss our exclusive interview with jamie dimon, daniel pinto, and former ecb president jean-claude trichet. anna. anna: it will be fascinating to hear what they have to say there
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perhaps a few reflections on brexit. i'm here in brexit as we .ontinue to track the voting last night, we continue to narrow down options for brexit. rejecting a no deal was the conclusion of a in fact, rejecting it twice, prompting one of my colleagues to call this the alice in wonderland moment. we have taken no deal off the table, at least in theory. could still happen by accident. now look as though it could be having with the meaningful vote three. any chance of passing? or this a movement from across the foot -- the isle -- aisle? some kind of customs union, some kind of norway plus event. , lots ofalk about that
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guests coming here. let's get a first word news update. the u.s. coast guard boeing 737eing 36 -- jets after new data suggest a link to the disasters. says satellite flight tracking data combined with newly discovered evidence from the recent accident raises suspicions about a safety feature. more than 40 nations have grounded the jet. speaking to bloomberg, the ceo of asia's largest aircraft leasing company says its client i look to replace aramex fleet fleetmodels -- the max with other models. >> this will increase the demand for leasing other aircraft, including boeing. for carriers with both airbus
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and boeing, they will be looking to supplement their existing fleet. slowdown hasonomic deepened with unemployment rising sharply. the jobless rate rose of the end of february, up from 4.9% in december, its highest level in two years. industrial output sockets worst start since 2009, growing 5.3%. however, investment in property rose, reaching its highest level since 2014. global news, 24 hours a day on air and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. anna and met -- and matt. matt: debra mao in hong kong with your first word news. let's get over to the jpmorgan conference in paris francine lacqua is standing by with joyce chang in the research at
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jpmorgan security. francine. good morning, i am delighted to be joined by joyce chang. there's so much to talk about when you look at the world economy and your research focuses on every part of the world. what do you worry the most about globally? >> growth has been subpar everywhere. in the u.s. it has been subpar, and then we see these dramatic revisions downward by the ecb. even in china with their promoting stimulus, we still have growth slowing down quite a bit. it will be over 6%, but just barely. matt: what about a global recession? >> this year, i have very little eyes on it. our models are showing anywhere between high 30's or 40%, but not this year. those risks continue to rise by 2020 or 2021.
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the u.s. recession, but we are taking a look at is corporate earnings and profit margins and it is looking to be in a decent place, that the policy accommodation has made a difference from the fed and more recently from the ecb. this is interesting. we're time to find the canary in the coal mines. where do we see it first? it is often emerging markets. he saw that last year. market and. equity that being the bellwether in many of these cases, and it is a function of the earnings growth and profit margins. right now, it looks to be in a healthy place. we have fourth-quarter growth all the way down to 1.5%, which is why you will get more of the debate on a risk of a recession. francine: if you see the u.s. in recession, where would we see that first? market moves are in the economy
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-- or in the economy? it in the you see economy. it matters more because liquidity commissions will have changed so much. that amplification shows up in the financial market first word -- first. matt: -- francine: what about brexit? how much does it hurt european growth? >> nobody is that focus on the consequences because there is the working assumption that you will get an exemption or extension with conditionality. certainly, when you look at things like business spending and investment going forward, that is when you see the impact of looking at the potential andth outlook in the u.k. elsewhere, we have been taking it down more systematically. when we look at china,
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what do we misunderstand? two authorities have a big handle and how to manage the slowdown, or is there a worry they focus on debt creation? >> china is trying to do difficult stimulus in a different way this time they are doing income tax cuts and stimulating consumption. the room for fiscal space everywhere is quite limited. think of what we have done with qe. if you look at china has consolidated fiscal deficit of including local financing, it is north of 10% of gdp and the debt burden is high. even with the fiscal stimulus, china's growth will come down to 6.2% from 6.6%. the stimulus is just enough to keep growth from stay further. francine: why are economists so bad at predicting recessions?
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is it because of geopolitical uncertainty? >> everybody underestimated geopolitical. the trade war really put a toll on trade and spending. this year, the growth slowdown has been sharper than anticipated. everybody thought growth would come back quickly, but you had a combination of the negative feedback loop the market selloff and the lack of the 30, as well as the ongoing geopolitical risk. and the fed has made a difference. the fat deposits made a big difference, and we are seeing some leaders and followers. eu following suit. we have seen accommodations. francine: joyce, great to see you. that is joyce chang, jpmorgan's chair of global research. back to westminster for a brexit update, and we will have plenty more from paris. anna: thank you very much, yeah, lots more coming up. thanks to joyce as well.
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up next, is apple anti-competitive? spotify launches a complaint over taxes. we speak next with the eu competition commissioner. what issue make of the request -- it doesn't she make of the request? this is bloomberg. ♪
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matt: welcome back to bloomberg: markets.
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we are 60 minutes away from the start of cash equities trade, although futures are not indicating much action. let's talk about our next guest. are they silicon valley's worst nightmare or best dream? she has squeezed out millions of dollars in fines from apple and google, plus an ongoing probe of amazon could change the way companies interact with user data. now, spotify has placed apple back on the radar of the eu's competition chief. have filed an antitrust complaint, accusing the iphone maker of creating an untenable situation for streaming right in the app store. but she may have hurt sights set on a different rule in the future. and just seven days time, she is said to be named as a candidate for european commission president. alliance hopes to make big gains eu elections in gains amidst the seismic changes in europe's leadership and
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composition, could we see our first female head of the european union? the european commissioner margrethe vestager who has one global notoriety, and more than anyone else, makes u.s. technology executives quake in fear, if they are managing a very gigantic platforms. joining us in berlin, and he so much commissioner. >> morning. matt: it is funny to talk about silicon valley's worst nightmare. on the other hand, i think a lot of startups and smaller firms may be rooting for you here to try to get more competition in the market. >> well we need all the startups, we need the newcomers, the next good ideas. for that, they need an open market. they need to be able to attract financing, skilled people, and for that, they need to be able to present their products customers. -- to customers. matt: let's mark with a smaller
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company fighting its own glide, the spotify issue -- goliath, the spotify issue. they have filed a complaint with the european commission. think, required to allow everybody the same chance in the app store? store, does own the app it is, after all, their own ecosystem. >> and at the same time, it is a competitor to spot for. -- spotify. you have a specific product, apple music, which is a direct competitor to spotify and their services. this is a dual market situation we take seriously. if you are both of the host and the competitor, have you behave when you yourself have gained some status of the market? matt: as a gearhead, i often think of things in carmaker terms.
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thinking is this if like bmw were to offer motorcycles without shocks or breaks? difficulty in adding third-party parts to its bike? would that be a problem too, or i it apples and oranges? >> you can never directly compare, but it be like there was a big car sailor and took in smaller products but don't sell them on the same terms. that say well, you can buy our car, or the competitors car. if you buy the competitors car, you have to pay more. matt: anna. anna: good morning to you, margarita. -- margaretha. what kind of timescale can you put around apple, and have you had any complaints from others? first and foremost, we take any complaints we get very seriously.
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it takes quite an effort for people to post a complaint, it's not something you write on the back of an envelope. it takes data and investment do that, so obviously, we take it seriously. and we will start looking. what we make of it remains to be seen. anna: one thing that is very much talked about is the need for national champions. doing a see a change in regulations? -- do we need to see a change in regulations? number of european and global champions, my guess is you are alluding to the where competition problems could not be solved by the companies, and because of that, were prohibited. find emergingu from mergers.
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there are a number of examples. you can do great things with mergers if you are willing to solve competition issues. matt: what would you think about it merger between deutsche bank at commerzbank? are have shown interest and in talks, the government seems to be pushing them in that direction as well. we will see if that eventually will happen, but it has not happened yet, and it is very tricky to have an opinion. the: when you look at situation, doesn't seem like they have too much market share to get together? never, ever comment on that before we have them in our processes. it takes quite a detailed analysis to have a qualified opinion. matt: anna? anna: let me ask you about something else. we understand that you are tipped to become a candidate for eu commission president.
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can you confirm and interest there? is it about time we had a woman running the commission? >> i can definitely confirm. no matter who it will be, it is about time to have a woman as head of the commission. its team nextting week in order to have a debate about ideas we are at a crossroads in your and we have to find our way forward we hope in this way to present a group of people that can't participate .n exactly that idea matt: i was looking through the history, there has never been a female leader of the commercial. human the council has only ever had margaret thatcher as its head. can you think of other women you would like to run against? >> these processes are complex.
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a number of people cannot make themselves available, they may hold high positions in countries as prime minister's or other positions, so you won't know until the very last day this is exactly the reader -- reason why the debate about the five-year mandate and our strategies has to be centerpiece. then come of parliament and your heads of state will find who will be the right person. matt: one final question, maybe outside of your purview, but we have been talking about gender parity a lot here lately. there are still huge pay gas, germany is one of the worst offenders. is there something you can do about that? >> no, i don't think so. there is a gender side also to competition. if you have affordable services that a family would need, both a
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father and mother, in order to liberate themselves and to have equal participation, that may be able to push things, because you are perfectly right, we still have a pay gap, a gap in holding power and offers in business and in politics as well. only placely, the women get more than man is in domestic violence. matt: that is terribly unfortunate. >> it's awful. matt: could you hope to change that as commission president? >> i don't know about that, but i know that for myself, it is important to see that women can do anything. ,s prime minister's, as ceos holding high positions in european politics. it is important to show the thinkity, also because i men have much more to offer if we have diverse leadership and a diverse set of people. matt: thank you very much, commissioner. >> my pleasure. matt: margaretha bested her,
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european petition commissioner. just minutes away from european stock trading, we will you issues you should pay attention to. is the french supermarket operator, planning to sell billions in assets. this is bloomberg. ♪
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matt: coming up, we are going to see the market open in europe. could be a slow start, look at
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how flat european equity index futures are, almost no change at all on the dax. ftse futures pointing down almost .1%. chinese they are failed to impress. this is bloomberg. ♪ you.
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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. anna: welcome back, one minute
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to go until the start of cash equities trading. live in westminster lots of drama today. lots to follow in the markets, annmarie hordern is in the studio and will take you to the market open. >> euro-dollar relatively soft csi 300 and, chinese stocks closed the downside as investors went through that data dump. industrial production came in softer. oil to the upside, rally for a fourth day in the room. they fall to many thought would be an uptick. high,ff that nine-month
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ubs wealth management telling investors not to chase this rally. let's look at what futures are doing. looking relatively flat. it may take a while to see where the markets are targeting this morning. now, they have the european market set to open. london will be in focus and we have yet another vote on brexit. this is whether or not they will extend the timeline of when the u.k. would leave the eu. ftse 100 opening up flat but slightly to the downside. liv-ex also opening flat. -- the ibex also opening flat. for the market of a low chinese stocks were slower and a mixed picture in asia. let's take a look at what is going on in sectors. one thing i'm interested in his industrial.

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