tv Bloomberg Daybreak Americas Bloomberg September 9, 2019 7:00am-9:00am EDT
machinetry's export almost stops growing. first up to bat, mario draghi. the ecb is the first g3 central bank to set monetary policy in this new era, with deeper negative rates on the table. new management, same strategy. the new saudi oil minister promises no change to oil policy as the kingdom makes a step towards its ipo dream. david: welcome to "bloomberg daybreak" on this monday, september 9. i was up late last night. five hours almost playing in the u.s. open championship. nadal versusg, medvedev. serving 125 miles an hour. it was extrude mary. it got better -- it was extraordinary. it got better as it went on.
the play was just extraordinary. alix: that was the winning moment at the end of the whole game. david: and he didn't get up. alix: i do not blame him. the real action is going to be looking at the dollar, kind of around a two week low. other than that, steady as she goes. the 10 year yield back by about three basis points. crude, if itnt out is policy steady as she goes, that means more saudi production cuts. crews wanting to kiss that $60 for -- crudeg wanting to kiss that six together level, waiting for toio draghi -- crude wanting kiss that $60 level, waiting for mario draghi. we begin with china, where the country faces and import and export deceleration in the month
of august. bloomberg's enda curran has more. just how bad was it? pretty bad because economists were expecting exports would have grown. we had a contraction of 1.1%, and there was evidence of a big slump in shipments to the u.s., even as exports to europe grew, so it was clear the trade war affected all of that. the big fear among economists is that the pain is only going to get worse from here because toy shipments in particular were quite strong. thinking is this was frontloading before new tariffs come in december, so when those do arise, with the frontloading effect and demand being felt anyway, that would take away one of the remaining supports for chinese equities. what are the chances that
china could make it up domestically? could it make up some of what they are losing on trade? question, a very fair no doubt about it. friday.ee a move lower homegrown consumption is one of the drivers of china's economic growth, but at the same time, you kind of completely take away the pain spreading into some parts of the economy. that's a key metric for the communist party in terms of how they run the economy. that got more work to do. david: thank you so much. over to the u.k. prime minister boris johnson spoke in dublin with counter
partly over red car -- with counterpart leo varadkar. varadkar: the people on this island, north and south, need to know that their livelihood and sense of identity will not be put at risk as a consequent of brexit. david: francine lacqua is live outside westminster. give us a since of what is going on here. we just don't know will takeof form place. we had confirmation a couple of minutes ago from the spokesperson of boris johnson that they will go ahead and prorogue parliament. that means it will be suspended from this evening onwards. back to the news conference andeen the prime minister boris johnson, it depends on how
you want to see it. you can see and feel the tension at certain points, but boris also struck a slightly softer tone, saying he does what to strike a deal with the eu, while at the same time over the weekend hinting he would be prepared to go for a no deal brexit. moments inor parliament. todayis a vote later on for early elections. alix: thanks so much. we now turn to saudi arabia, where over the weekend, the king appointed a new energy minister. said notnergy minister to expect any changes. >> i'm not expecting to have
changes. i think with the personality i know, he is very decisive. he has a strong personality when it comes to the market. our: for more's correspondent joins us in abu dhabi. give us the latest on the ground. come fromi've just where the new saudi oil minister spoke to us. he spoke to us twice. he said at the start of presentation, "i can be very spontaneous. i can be the elephant in the room." he quoted british sitcoms. his message, when i asked him what he means by spontaneous, he said, "i am going to be forthright. that is what i'm going to bring to the debate at opec." he is the new central banker of oil. he's the new man in charge of saudi arabia's oil voice within opec.
we scrummed again and i asked him about the risk of recession. he said, and i am paraphrasing, going to come to a deal. they will do a deal. when i pushed him in terms of would saudi arabia push for deeper and more aggressive cuts, he said it would be disingenuous to ask for that at the moment. have you called donald trump? he said my role is not to call the president of the united states of america he almost stopped talking to me at that stage. it's hot off the press. he's going to be forthright. he's going to push for better compliance. i just wonder what spontaneous really means because this is a minister who's been around for quite a while. he's one of the founding fathers of the opec plus agreement. fascinating times. , he usedil minister
the language that they are ready to do more, and he emphasized compliance of nigeria and iraq. i don't know can i squeeze anymore in? [laughter] david: that was a lot. hot off the press, as it's coming out. thank you so much. european announces its latest rate decision this thursday, with wide speculation of further rate cuts, possible quantitative easing, and perhaps more. michael mckee is here to take us through what we might expect from the ecb. michael: i have some good news for you, and that as it is the fed's premeeting quiet period. almost no fed speak for two weeks. they are widely expected to add stimulus to the euro zone economy. the question is how, and how much? how far do you have to go to justify bund valuations these
days? to the exempt a certain amount of deposits, a certain amount of banks? tiering? do they leave composite levels for consumers off so consumers and savers don't get hurt? there's a real questions that need to be answered. do they restart qe? half the bank seems to think they shouldn't, half think they should. mario draghi is expected to announce some restart of qe come but they have bought up most of the bonds they are able to buy under current regulations, so how do they do that? .e will find out thursday how does it affect donald trump? does he get mad again and tweet at the fed? alix: and will it be enough? here in the u.s., what is on the docket? michael: the week after jobs day is usually a pretty quiet one, but not this week. out wednesday. we get the consumer price index
strategist, and bloomberg's romaine bostick. romaine, i will start with you. this chart shows imports and exports. you can see all the way to the right, we've got a slight negative, -1%. you look at 2017 and 2018, there's a lot of trade. look at how it is narrowing here. is that the trade war, or weakness in the economy? romaine: it is both. ofclearly shows the effects the trade war, and the u.s. just isn't as strong as a partner as it used to be. but the other thing you also saw in those numbers was that there was a significant shift in chinese exports to other parts of the world, and if you are looking long-term, if you are the u.s. you have to be concerned, and if you are china, you have to be a little bit encouraged. the question is how long it will take to sort through this. ian: i think what you're looking at is unambiguous global slowdown.
is down 6% year on year, china is 3%, germany down for percent. there's a synchronized slow down taking place. i think that is the context within which these tariff and the trade war's are taking place -- within which these tariff and trade wars are taking place. alix: which also puts them in a bind when it comes to stimulus. what we saw friday was like stimulus, kind of, because you don't want to have a higher housing bubble then you already do, but you want to support your local bank. ian: it is a very narrow tight rope they are walking, and that is the thing we've been saying to clients all year. people have been looking for this big stimulus. it is not there. it is drip feed stimulus. that's the message people need to get a hold of. romaine: is it that they don't have the capability to do more, or a willingness? ian: i think they do want to get
that leverage under control. i think they also want to get the reliance on foreign denominated debt down. so the stimulus that there is, in our view, a lot of it on the monetary side, is encouraging dollarns instead of loans. larger issueses for the ecb as well. what about fiscal stimulus, whether in china or europe? ian: that is what we saw in 2015, 2016, which is that you need both. we had the unconventional monetary policy in europe and the u.s.. we are going to see unconventional fiscal policy coming through. in other collateral damage, fiscal making. romaine: it was almost tandem, and now you have this step-by-step process. how effective is that going to
be? ian: i think the lessons from the 1950's and 1960's is that it isn't if you do one or the other. you have to do both at the same time. this is why you have that immigrated monetary and fiscal stance required. if we want to get growth up and inflation re-accelerating, we have to do both monetary easing and fiscal easing at the same time. alix: plus mmt, modern monetary theory. ian: that's one incarnation of it, but it doesn't have to be that precise mechanism. david: but look at what the ecb is looking at right now. some people are speculating if you get it down low enough, it will entice the governments to borrow more money, and you get the fiscal stimulus because it is so cheap i have to borrow money. romaine: this is the argument a lot of progressives have been making in the u.s. for quite some time. we have effectively had mmt, just by a different name, so why not extended to their social progressive use? -- progressive
views? ian: i think in europe, the thing will be that greening. if you link the infrastructure program with a green program, you are not actually barring the future's income, which is always the argument against fiscal easing. you are actually helping build the future. alix: the blackrock paper from a few weeks ago talked about just this, but if you just allow fiscal stimulus to take place, it is never enough. there has to be a short-term joint action, which is very much like, we are going to borrow this much money, sell this much bonds, and have this kind of package. ian: you need to have that coordination. alix: isn't that dangerous? how do you get out of that kind of relationship? it is like a bad relationship you are in and can't breakup. ian: you grow your way out. the lesson of debt throughout the last 100 years is you cannot do debt deleveraging. the only way you can do that is by default or devaluation.
you have to get that nominal growth picking up. that is going to be the big shift in monetary policy. romaine: but you need sort of a leader, too. in europe, maybe -- i mean, christine lagarde has shown she will have some ability to do that. you wonder in the u.s., who is leader who is going to bring those two together? ian: it is interesting to see that political leader taking over the central bank. that is the politicization of central banks coming through. david: and donald trump says he was that later. he got elected saying i am going cuts growth, we had tax and had growth for some time, and it just didn't last. can you generate growth if you do have control? ian: yes you can come up at has to be synchronized. it has to be large, and it has to be multilateral. you had not only the chinese stimulus of monetary and fiscal, but also $1.5 trillion of qe
from the boj and boe at the same time. so we need coordinated monetary policy and fiscal policy, not synchronized. alix: which raises the other point that this is all structural, and longer-term growth potential has come down all over the world. how do you get out of something like that? energy ceo in abu dhabi was talking about oil prices. year we will be between and $65.65 a barrel -- alix: how do you get higher inflation excitations -- inflation expectations? ian: one of the things that gets us out of this morass, there's really only one of two things. alix: the consumer is good come
about we don't meet inflation expectations -- is good, what we don't meet inflation expeditions. ian: if you bring down -- inflation expectations. lift about 18 months to two years later. the other thing you need is a weaker dollar. that is the real key here, and that is the problem about getting the global economy going . until we get a weaker dollar, and that means a stronger euro -- what would mario draghi make a that -- a stronger rmb, stronger yen. you will have to have coordinated policy. romaine: but that is the paradox. how do you get a weaker dollar? ian: you have to have that willingness to new the fiscal -- to do the fiscal and monetary side. the last time that happened was plaza. david: you are talking about the plaza accord, but in a very different world where world
leaders do not seem to agree on anything. ian: and how much of a recession do you need to trigger that willingness?how much of a rise in unemployment? in 1995 it was a five percentage point rise in unemployment that did it. it was the big u.s. companies going to reagan and saying you have to give us a deal because we are dying. it is the international, multilateral u.s. companies that will drive this agenda. decline in approval for donald. [laughter] ian: will democrats facilitate that fiscal expansion required to match what the european and japanese do on the monetary side? david: thank you so much for being with us. ian harnett, absolute strategy research strategist, will stay with us. you can find all of the charts we just used and more by running to tv on your terminal. live -- by running gtv on your terminal. live from new york, this is
viviana: you're watching "bloomberg daybreak." -- pilots atitish british airways are on strike, pumping the airline to cancel most of its flights. ba almostt could cost $100 million. we work may drop the valuation for its ipo below $20 billion, according to dow jones. some shareholders are pushing the company to delay the offering. as early as today, wework planned a roadshow for the ipo. worth 47 billion dollars at the start of the year. apple and folks -- apple and foxconn confirming they broke a chinese labor law in the making of the iphone. china labor watch coming out with the claims, saying that in the past, it has found other
labor rights violations by apple partners. that is your bloomberg business flash. david: i thought this was fascinating because this final action organization came out and said you were wrong, and apple said, you're right. alix: they didn't try to walk it back or deny it. david: and there's a limit to how many temporary workers you can use in china. alix: but it was also the working conditions, too. if you use tipperary workers and violate labor law, that is one thing -- temporary workers and violate labor law, that is one thing, but worker climate is another thing. david: it increases their costs. alix: is an foxconn looking at different areas as well? to potentially produce some of their goods as well? david: absolutely right. alix: and raising costs for apple. david: and we know about vietnam in place is like that. if they are right, that means costs go up, and chinese exports
become even less competitive. alix: this came out today, would we are supposed to get the new launch of all of the apple jazz. tomorrow it feels like the big thing is going to be a camera. [laughter] david: but your point is right, probably not a coincidence that it came out just on the eve of announcing a new iphone. david: are you getting a new iphone -- alix: are we getting a new iphone? david: no, we are getting two new iphones. [laughter] alix: coming up, stimulus. how do you do it? this is bloomberg. ♪
the fact that chinese car sales fell for a second month. we have german auto production also starting to roll over. in other asset classes, a weaker dollar story and a cell bonds kind of thing -- a sell bonds kind of thing. despite theg a lift iea revising down global growth. the currency cross i wanted to highlight was with the lira, down 0.4% against the dollar. president erdogan says the rates toank will lower single digits soon. david: and what that's going to lead to a single-digit inflation as well. this is his theory. so he is consistent. alix: monetary policy, fiscal, it is like this, apparently.
powell reserve chair jay left the door open to further interest rate cuts. chair powell: trade policy uncertainty will weigh on business decisions and so on. we will continue to watch all of these factors and all of the geopolitical things happening, and we are going to continue to act as appropriate to sustain this expansion. alix: with us is ian harnett, absolute strategy research. did you learn anything friday from the jobs, from what powell is saying? ian: we view the u.s. economy is slowing. the policymakers, their job is to reassure and say that policy, as it stands today, is neutral. they don't want people trying to second-guess where things are going. they don't want people thinking they are behind the curve. but our view is when you look at what is happening to those , theycturing ism numbers are down 12 points over the last six months.
normally rates would have been cut by 200 basis points at that stage. , thethink the bond market futures curve is telling us the fed is behind the curve, and the trade this option is one of the things causing the problem. david: not so bad nonmanufacturing ism, and the economy is more services than manufacturing, right? ian: this is the pushback we are getting because we've gone out officially saying we think you are going to get a recession in the first half of 2020. the pushback we are getting consistently is, well, what about the consumer? the service sector is fine. but where does all the volatility in the economy come from? is it the consumer? no, because it is percent edit carries along that. the volatility comes the side and the trade side. david: the thing you rely on -- develop to livy -- the volatility comes on the capex side and the trade side. david: the thing you rely on is
your magic chart. what economists are bad at forecasting is unemployment. this is a chart my business partner and i first discovered in 2006, just ahead of the credit crunch. with inverted unemployment on the left-hand scale, unemployment comes down slowly. when unemployment comes down, equities beat bonds. this is why you want to be a bull for seven or eight years at , but thend we were unemployment rises much faster than economists forecast and anybody imagines. that is when equities underperform much more aggressively. and we haven't even started seeing unemployment rise yet. it is stabilizing. it is a long cycle. when that starts to roll down, equities are going to underperform bonds really aggressive, even from these levels taylor: alix: -- from
these levels. alix: when does that happen? ian: we think in the next six months. we believe that is going to take fed policy much looser in the next 12 months. alix: so that means you will be rotating? previouslesson from recessions, seven recessions going back to the 1950's in the u.s., the average length of that recession has been 10 months. median decline has been 20% peak to trough. earnings have come down 15%, and multiples have come down five points. the lesson about when you get back in is not until four months for the end of the recession. so you have to be weigh into that recession, at the point where the fed has typically, post-1980, they had to cut 400 basis points. they can't do that this time. that means rates have to go to zero if we really get bullish about equities again, and you need some of that fiscal easing and the dollar weaker. even back in the 1970's and 1980's, rates fell to hunter 50
basis points. we think you've got this recession coming. we think the lack of imagination on earnings is going to be a problem, and the lack of imagination on cash flow and what that does to credit. david: so there is some thing else happening in 2020 the presidential election. president trump is not going to want a recession. what can he do to do this around -- to turn this around? ian: have the best trade deal that's ever been written. whatever it looks like, he will have the best trade deal that's ever been written. if this is a liquidity event, a where it isnt really damaging the credit creation ability in the banking sector, the institutions we've talked about before, they are down 30% from their 2018 peak. alix: let's say you get that rotation and that you get a great trade deal. what happens to the treasury market
-- what happens to the treasury market? how low do yields go? ian: short-term, you can see that sentiment is overbought. positioning is quite aggressive. you can have a push up to perhaps one some of the on the 10 year. our view is that in the past, when you seen this kind of recessionary environment, treasury yields have fallen 200 basis points from the previous peak. that will take you down to maybe 1% on the 10 year. if you've got those fed funds rates down by the end of next year, you will get a big pivot to the short end of the curve because those two years and five years are going to head down to sub half. david: wow. ian harnett of absolute strategy research will be staying with us. let's turn to viviana hurtado with first word news. kailey: afghanistan --viviana: afghanistan is bracing for more taliban violence after president
trump called off peace talks with the group and ask him leaders. it appears a deal to end the war in afghanistan was imminent. now it has unraveled, and that is raising questions that the u.s. will go ahead with a planned trip reduction. the stimulus debate in china isn't ending. new figures showed last month, exports fell on percent in dollar terms, a 60% drop in shipments to the u.s. highlighting the damage caused by the trade dispute. many economists say china needs more stimulus to shore up growth. in ireland, british prime minister boris johnson said the u.k. has an ideal amount of time to achieve a brexit deal with the european union, but irish prime minister lee over red car -- minister leo varadkar did not sound optimistic, saying that the idea of a backstop is not ideal for ireland. 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. i'm the fiamma or tonto. this is -- i'm viviana hurtado.
this is bloomberg. david: thank you very much. still with us is ian harnett of absolute strategy. what do you make of what is going on, the chances of a no deal brexit? what does it mean for investors? ian: we think the chance of a no deal brexit are actually very high. even if you get some kind of resolution, there is the ability approve orohnson to not approved royally. he can challenge it in the courts. he says he won't presented it to the european union. think there are still? about that. in terms of the u.k., we've just said to people, look at that chart of the u.k. in dollar terms since 2016. it is still an uninvestable play. it is a gamble. thes relatively cheap, but downside risk, particularly for sterling, because the bank of will letave shown they sterling go. you could see sterling go below
$1.10. david: ian harnett of absolute strategy research, thank you very much for being with us today. coming up, make market volatility great again. jp morgan came up with an index to track the impact of president trump's tweets on markets. more of that next in today's wall street beat. alix: check out tv . watch us online and interact with us directly. go to tv on your terminal. this is bloomberg. ♪
now to your bloomberg business flash. microsoft says the trump administration is treating huawei unfairly. china's leading maker of network equipment and mobile phones is a big microsoft client. president brad smith telling the u.s.week" the way government treats huawei is "un-american." the ceo of nissan is willing to resign once a successor is found. he says he is ready to take responsibility for scandals involving former chairman carlos ghosn, but he won't accept blame for allegations he on the other nissan executives were paid more than they were entitled to. -- i'm toa or todd of be on or todd of -- i'm viviana hurtado. that is your bloomberg business flash. we were going through the
holders function on the terminal, and it appears elliott have been buying stock in this quarter and at&t because they did not own it as of last quarter. that raise questions for me, too. david: at&t bought time warner, and leveraged up substantially. there's a lot of questions about their directv ownership, which has really been struggling. alix: i like your reaction, like, yeah. of course. david: everybody knew that. [laughter] david: we turn now to wall street beat to cover three things wall street is buzzing about this morning. first, jp morgan creates an index to track the impact of president trump's tweets on the markets. eisman spoke on bloomberg tv this morning and said that deutsche bank is not going to solve its problems. and four banks are likely to get
roles in what could be the ipo, according to reuters. alix: ipo, according to reuters. alix: let's start on this amazing jp morgan index. joins us -- sonali basak joins us. sonali: so making volatility great again, i'm not sure how great this volatility has been for the markets so far. we will see how this impacts fixed income debt and whatnot, but one thing about this, we certainly seen a lot of traders track trump tweets before, but this is not talking about stock market volatility. it is talking about interest rate volatility, which is a little different. to followseems somewhat, at least when he tweets during market hours. sonali: it is statistically significant, according to jp morgan analysts. alix: it speaks to how much banks really want to get you money, how you are reaching for straws. to me, that was the takeaway. sonali: a very specific product
here they are looking at, but you can also track trump tweets on the terminal also. [laughter] david: in the meantime, mr. eiseman was with us this morning on "surveillance," and had onething to say deutsche bank plans. >> the problem with deutsche bank is the plan they produced seven months ago is about five years too late. so it's possible it can solve their problems, but i think it is unlikely. david: this seems to be a theme, too little, too late, with deutsche bank. sonali: everyone knew this was going to take time. i would like to see steve eisman versus doug brownstein. alix: steve eisman shorts european banks. i don't know if he shorts deutsche bank. sonali: he's not the only one
that believes it is a little too late. also, we've seen changes in the plan already that we have questions about. how do they turned around -- how do they turn around fixed income debt? david: i haven't heard to me people come up with an alternative plan, other than merging with commerzbank, which they talked about for a minute. sonali: they have some time to show this is going to pay off. everyone knows it is going to be costly. alix: our third story has to do with who is going to win the saudi aramco ipo. the different conversation now versus a few months ago is that there's no doubt the ipo is going to happen. sonali: well, we'll see. [laughter] alix: it feels like they've done the moves internally. sonali: what's happening now is the bank lobbying. was reported over the weekend to be in a prime .osition for the lead fund had wealth
steak with uber as well. weworknd who's on the that might now really want saudi remco if wework doesn't happen? sonali: it is a very big year for jp morgan ahead with a lot of tricky questions. david: thank you so much for being with us today. coming up, congress returns to work. we will take a look at the to do list. senator tom carper from delaware joins us next. alix: if you are jumping into your car, you can tune into bloomberg radio on sirius xm channel 119 and the bloomberg business app. this is bloomberg. ♪
european stocks moving a little bit off their shine as automakers in europe hold onto there's, despite the fact that you have chinese car sales falling for a second month in a row. ev sales dropping off a cliff. in other asset classes, still a weaker dollar story evolving here. cable the outperform her. euro-dollar continues to go nowhere as we wind up waiting for ecb on thursday. you are seeing a little bit of selling in the bond market. yields moving moderately higher. spread 2.86% here. crude prices also getting a bump about 0.5%. part of that is the new saudi oil minister. they say steady as they go in terms of oil policy, but that means to me more cutting for longer. you get one million barrels of oil a day cut needed to sustain $60 oil prices. out what isint
happening and the lira. president erdogan in turkey says they will have lower interest rates in single digits soon. that's when you have the president setting central-bank policy versus the potential bank itself. david: thanks so much. one of the things i will be watching this week is the anniversary of 9/11 this wednesday. later this morning, three u.s. senators will hold a field hearing at the 9/11 memorial in southern manhattan to review the state of homeland security 18 years after the terrorist attack on u.s. soil that claimed some lives. we welcome now one of those senators, democratic senator tom carper of delaware. i think it is fair to say we were not adequately prepared 18 years ago. are we better prepared today? sen. carper: much, much better. david: what should we be concerned about? sen. carper: there are bad guys around the world coming after us every day, here at home, and our embassies and military deployments. they are a lot less successful
than they were 18 years ago. that doesn't mean we let up or take down our guard, but the nature of defense has evolved. still plenty of terrorism out there, but cybersecurity is a big threat. we've greatly bolstered our defenses. guys have led the home and security agency to charge with sever detection -- with cyber detection. we are much better than we used to be. one of the focuses is in the threat posed to our planet by too much carbon in the air and the climate crisis. that is an interesting develop. certainly i never expected them to focus that much in their testimony. david: let's turn to the agenda
for congress has you come back into session. that is one thing that could be on the agenda. as a practical matter, what can be accomplished in this session of congress?there's been a lot of back and forth without action . sen. carper: one thing is we need to pass are spending bills. david: you agreed on the overall numbers, i understand. why is that so difficult? sen. carper: people have different priorities. some are more interested in manufacturing, some in tourism. there are some common denominators. one of those is transportation. -- everyone knows we need to invest more highly in roads and bridges. it also has a climate title, a major climate title, to address climate change through the building of our next generation of roads, highways and bridges. by providing charging stations for electrified vehicles,
fueling stations for natural gas powered vehicles as well, which will reduce the greatest source of carbon on our planet in our mobile sources. it is not power plants or buildings anymore. david: whenever we talk about things like energy and transportation, we always talk about how you're going to pay for it. there's a gas tax that has increased in a long time. why can't that get done in congress, to increase the gas tax to pay for some of the infrastructure when it comes to transportation? things aer: one of the beloved friend, colleague, governor, and senator in ohio, he adjusted raising the gas tax i about three or four cents a year going forward. it is interesting. the congress has been reluctant to do much on this, but the states have come forward. about 35 of my colleagues have
said, we could never read the -- we could never raise the gas or diesel tax, but the states have done it. percent -- 95% of republicans, about 90% of democrats that have suggested raising the gas tax have been reelected. you will pay a fair share to rebuild our roads, highways, bridges. that's the future. david: you are on the finance committee. trade. usmca has got me confused. can congress help? sen. carper: i think the senate is ready to take the handoff and run with the ball. i think good negotiations have
been going on with the house. lighthizer, the trade a mess at her, they have a pretty good relationship. we want to make sure there's enforcement for labor and environmental concerns. david: thank you so much. that is democrat senator tom carper of delaware. later today on "balance of power," i will talk to former u.s. defense secretary jim mattis. that's at 12:30 this afternoon here in new york. live from new york, this is bloomberg. ♪
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september 9. alix: here's everything you need to know at this hour. british prime minister boris johnson says the u.k. has an ideal amount of time to achieve a brexit deal with the eu. irish prime minister leo varadk ar says the u.k. needs to guarantees, not promises. varadkar: the people on this island, north and south, safety know that their risk.entity are not at kong, thousands of demonstrators marched to the l forconsulate to appea help from president trump.
david: in tennis, rafael nadal stopped a comeback bid by daniil medvedev to win the u.s. open men's singles title. tobeat medvedev in nine sets win his 19th grand slam trophy. alix: and he was tired. released a letter calling on at&t to review its portfolio and divest assets, considering a sale of directv. in the markets, at&t up by almost 10%. markets holding on to their pre-open rally, up 0.3%. in the currency market come weaker dollar. higher yields in europe as well. crude getting a bid on some risk on, but more of a saudi story. david: let's turn to china. china export numbers over the weekend were surprisingly weak, showing a 1% contraction, while imports shrank by 5.6%, increasing china's trade surplus with the rest of the world.
we welcome now from washington deborah lehr, paulson institute vice-chairman and executive director. i will put up a chart that shows the total amount of imports and exports from china over time. apart from the fact that we have a negative number in imports last month, you can see, compared to two years ago, there's a substantial decline in the overall economy represented by imports and exports. this is a matter of the trade disputes, or a more basic issue with the economy? deborah: it a competition of factors. xi jinping has tried to transform china's economy from being dependent on low-cost exports, and into being a consumer economy, but definitely the trade war has had an impact. if you look at the most recent trade statistics, exports to the united states are down a little over 15%, and even more important, u.s. exports to china are down over 20%. the same time, we've
seen a significant decline in the value of yuan versus the u.s. dollar might that compensate for some of this? deborah: that would accommodate for some. but by and large come of the chinese have propping up the currency rather than letting it flow down to what it would be if they did let it flow more naturally. alix: what is a fine line the pboc has to walk in terms of easing and 90 using. -- and non-easing? chart the on this reserve ratio requirement. what is going to be the effect? deborah: one of the things the chinese are trying to do is really get money to small and medium-sized enterprises, which are the engine of growth in china. they've been challenged in how to get there, and part of this move is to ease credit so that those small and medium-sized enterprises, which typically
have difficulty accessing capital, can get it. state owned enterprises are tending more and more to suck up more of that credit going into the chinese economy, and they are not the ones generating jobs or any kind of significant economic growth. but there's a fine balance because debt is a huge issue in china, particularly local debt and growing corporate debt. they have to find that balance, and it is very difficult. are we seeing the chinese leadership getting ready for a long, cold winter, so to speak, in terms of trade negotiations? should this be a message they are in no big rush? the the chinese --deborah: chinese always have a longer-term outlook on these issues then we tend to. they have looked at this trade issue from the beginning as something that is going to be just one aspect of now a 40 year relationship. that they can whether these up and downs -- that they can
weather these ups and downs. it is whether they will let their economy sink. they are particular. they've set up certain demands that they have forgetting one. there's talk that in the call he juste premier liu had with secretary mnuchin and ambassador lighthizer, that they were willing to reconsider certain agricultural purchases if they would postpone or reconsider upcoming tariffs. they are hoping to create a more positive atmosphere going into trade talks next month. david: we have an election coming up in november 2020. andhe u.s. economy weakens it is partially attributed to trade disputes, and president trump wants to get out of it, is xi inclined to
give him a graceful way out? they are onlynk looking for what is in their best interest as we are looking for our best interest. deal, end of getting the we were at her them we started. for xi jinping, they are looking at where and how they can get the best deal. if they look at the lineup of the democratic candidate, as well as the consideration for president trump, in many cases, president trump looks moderate compared to some of the democrats coming in. alix: walk us forward in terms of xi's thinking when it comes to hong kong. what background is that set for trade talks? deborah: it really depends on what happens with hong kong. so far, the chinese have been moving very carefully in what they've been doing. it was a positive sign that kerry took -- that carrie lam
took the extradition bill off the table, but certainly if the issues get worse, if the chinese military moves in or there is any kind of significant police or military action that would have an impact on the .elationship overall david: supposedly there will be meetings in washington in the month of october. -- do you expect any significant talks? deborah: i hopedeborah: --deborah: i hope negotiations come through. xi jinping is intending to have willor parade, and liu he come after that, and they have meetingsificant
after. it is very important if they can show they are moving on the trade negotiation and puts him in a can business and knowing into these internal meetings as well come over on listing -- where he's come under fire for his handling of the economy. alix: thank you for joining us. deborah lehr, paulson institute vice-chairman. some breaking news for you. nissan's ceo will be resigning on september 16. we had gotten some feedback that he would be resigning with a successor was found. cio will be taken on an interim basis. david: we know carlos ghosn because of allegations that he took too much money out of the company -- out of the company, and it turns out that it was more money than disclosed. he says it was a mistake, he
says, but he says it is my fault, and he's gone. alix: and because ¥35 billion in damages. david: wow. alix: strategists today writing c -- writing that, "citi -- joining us now is lori calvasina, rbc capital markets head of u.s. equity strategy. defensived to the tilt right now? ori: we think we still have a ways to run. we think we haven't gotten to that critical point where the cyclicals are so cheap, you have to hold your nose and buy them. so what is that level?
say this is a cyclical versus defensive's return spread. owned,ght not be over but they are quite expensive. so when to turn? lori: you have to go through each sector. i do think trade is pivotal here. we are seeing things like utilities, staples going up, even on days when the market is going broader. i think things like financials and industrials are just going down. flow, reverse the news you get a good trade headline, and all the sudden it flips. i think that is an important part of it. david: well so have what is going on with yields and bonds, talking about financials. what kind of told is that likely to take? lori: i think what is interesting with financials is obviously the yield curve compression seems to be what a lot of these are trading the sector on, and that is a very
difficult thing to go up against. said on the days when we are on these defensive sectors, we are going to be long gone. we do think the economic story will turn at some point in time. we are not saying to buy them all at this point, but we think financials look like one of the best ones. alix: if trade talks term, what if it turns for the worst? lori: health care might get a short-term defensive bid because it is very undervalued and the large-cap space. we are a bit reluctant to go to overweight there because we are also factoring in the 2020 election, which we think is the .ext big policy risk david: even if it turns for the better, is there a point at which it is too late? companies are making decisions right now about supply chains
and things like that. they are not going to turn around right away. lori: it depends, too late for what? one thing we said about the latest escalation is it raises the risk for a growth scare to hit the market. we think the underlying economy is still very strong. we've got some very good reads on the consumer. even if you go back to the second quarter, before we saw things fall apart over the summer, we were already seeing share back back -- seen share buyback activity. this was all put in place at a time when people thought the trade war was going well. alix: what does it mean for small caps? in 2007, we saw the market was continuing to climb to new highs. small caps were week, and everyone scratch their head and said, what is going on?
decisions and that sort of thing. as we go forward, we will continue to monitor all of these factors and the geopolitical situations and continue to act as appropriate to sustain this expansion. david: joining us now is bloomberg's michael mckee. still with us is lori calvasina of rbc capital markets. did we learn anything new from chair powell? from the fed, no. they staked out the same positions they left us with after they cut rates last time, or they think they do. the question is what is this going to accomplish? we don't seem to have a problem with the cost of credit in the united states, concern over the trade war, and the fed's actions aren't going to accomplish anything on that regard. we have the ecb this week, widely expected to do some significant qe or lower rates or both. the will then widen interest rate disparity between the two countries, affect the
dollar, maybe push the dollar higher. donald trump will get mad and maybe push back on the fed again. alix: he won't get mad unless it actually weakens the euro. michael: the problem for the ecb is a little different than the u.s.,. u.s.en the maybe they can make a difference in some countries. david: let's compare and contrast. the fed versus the ecb. mike said maybe a little bit more loosening. be 25 basis points. at this point, you are going to have high expectations. are are economists -- lori: economists have said probably one to two more cuts this year. are not reallys hung up on how we basis points will be the number of cuts.
they just think we are in easing mode, and the playbook is clear when you think of that. basically, you want to play dividend yields. back in july, what it was kind of cemented, we'll fit all of the factors we track in the s&p 500. the one clear place you want to is high dividend paying yield stocks. it takes us back to small caps, which you mentioned earlier. lori: it is really a statement of cyclicality, that your fed is being viewed as something that --l just alix: the question with the ecb is how much more can you get that makes a difference? steve eisman was on "numbered
surveillance." here's what he had to say -- on "bloomberg surveillance." here's what he had to say. >> why do you think more negative rates is going to help? what european needs is meskill -- is massive fiscal stimulus. the central banks are not a substitute for that. alix: he's right, right? michael: he's also put his finger on a problem for the euro. if you look at a chart i brought along, it shows in the blue line ,his is the amount of access and banks are paying on that because they have negative rates. if they go even lower, that is going to mean at additional hit to euro zone banks. they are starting to say we can't do this anymore. our profitability is really going to be hit.
deutsche bank really complaining about that. there's a question how the ecb would pull this off, whether they would dotiering -- whether and theuld dotiering, would question is -- they do tiering, and the other questions as well. if it ism not sure time to say it didn't work. lori: i think you could add it to the list of uncertainties that have potential to take an equity market that's been very crowded and undervalued another led lower. we still don't know what the ramifications are, but not good for the broad market. . alix: to your point, it is not just the tiering you are talking about. you're making the case that it is just overbankd. -- overbanked. michael: it is a problem they
haven't been able to solve. they are working slowly on that. the ecb can't do anything about that right now. that is a domestic problem trying to address issues over. how do they deal with it? they will probably do the tiering. . they just can't do anything else. david: michael mckee, thank you so much. lori calvasina of rbc capital markets will be staying with us. up, jp morgan creates an index to measure the impact of trump tweets on the market. more on that next. this is bloomberg. ♪
own $3.2 billion of at&t shares. alcoa is shrinking its leadership team as part of a reorganization. in the last year, alcoa shares have dropped almost by half. tensions --e weighing on demand, trade tensions and global growth worries. jp morgan tracking the impact of on marketts volatility, named after the president's mysterious covfefe tweet. that is your bloomberg business flash. alix: thanks so much. actually aw if it is thing, but jp morgan made it a thing. [laughter] alix: the point is there is volatility in the markets with
relation to trump tweets. lori: the fascinating thing we found back in june, we asked what keeps you up at night about the market. we were asking this for over the year. trump and the trade war have always been in the number one and number two spots. this time trump and his tweets where in the number one spots. it was not just his policy. it was the actual tweets. david: this is cross indexed with volatility. it doesn't necessarily mean it makes a long-term impact. at the beginning of his presidency, he would tweet about companies and their stock would go down. lori: there's a university in the midwest that has an economic uncertainty policy index. if you look at how that correlates with volatility in the stock market, it is actually a very good relationship. we do generally say that when you have a lot of uncertainty about policy, it generates uncertainty in the markets itself.
the tweeting is just a new way that is getting expressed. alix: that is a really smart way of saying that. so do you play volatility? lori: i think you have to assume the volatility is here to stay. this goes back to our defensive this goes back to our defensive call, very selective on the riskier part of the equity market at this point in time. our guess is that volatility is going to stay pretty escalated into the 2020 election. , kratz are throwing all these policy proposals out. i think we saw -- democrats are throwing all these policy proposals out. i think we saw in april, health policy took a hit. alix: saudi arabia's new energy minister says there won't be a dramatic shift in the policy. this is bloomberg. ♪
automakers up almost 2% despite that chinese auto sales fell. story.ly weaker dollar in the g10 space, seeing the curve steepen. 310 basis points is where we sit for the 2-10 spread. the leroy getting pounded -- the as turkeyng pounded continues to set monetary policy. david: the -- we will have central bankers participating in trade negotiation alix:? what is the relationship between trade negotiation and currency manipulation? david: it is all getting pushed together.
saying they will take a look at tax cuts next year. alix: interesting. maybe october 15? david: october surprise. alix: into the election. now we will focus on oil. prices are up. saudi arabia's energy minister signaling opec and its allies will continue with production cuts. earlier he spoke to reporters. the market is driven by negative sentiment emanating from negative views. i do not believe demand has been generated -- has been saturated. alix: this ahead of the opec monitoring committee later on this week. calvasina of, lori rbc capital markets. what did you make of the statement from the new sally
energy minister -- new sally energy-- new saudi minister? >> this is a sign saudi arabia wants to get more serious and they are even more interested than supporting oil prices. i also think they understand -- the market sentiment is negative on the demand side and we see very strong supply from the u.s., so the medicine from opec and saudi arabia has to be even tougher than before. i think this is part of what we are seeing with the shift in control of the oil policy. david: you do not take at face value the statement this will not change policy at all? when you say it has to be serious medicine, that suggests
some change in policy. >> i think they will strengthen the policy of supporting oil prices. productionu.s. shale being strong by the second half of the year. medicine, in order to support oil price, could be to go through a cycle by first may be tried to punish the u.s. oil companies and the service providers for the next earning by shocking the market. i would not exclude the possibility, in order to hurt shale, so they cannot really's respond once saudi arabia and opec is cutting their supply. alix: my issue with that is they did it before when shale companies were in a worse spot, and when the oil majors were not in jail. would that even work now? >> i think that would still
work. it is true that the majors are more resilient and they have increased the share of u.s. shale production, but independents are important, and the smaller independents are fragile. they have a lot of debt, and debt is maturing. measure be an effective to soften supply, and i do not think you have to do that more , whenor a couple earnings the service providers could be able to respond. david: saudi arabia plus the able toopec plus may be affect the supply side. what about the demand side? is very realistic prospect of bringing supply demand into alignment? lori: i think that is what the market is struggling with. generally, our commodity team
has viewed the policy aspect of opec as very supportive for oil prices. on the equity side, i'm not sure that is enough. what we have tended to see is that when oil gets a bid, the stock prices tend to follow, but the stock prices never do as well as the underlying commodity. we think there's an ownership problem. hedge funds are neutral. they are willing to play the stocks to a certain extent. growth managers do not want to get engaged until you answer the longer-term concerns. i think the oil price matters, but i do not know how much it can do for the sector itself. alix: fairpoint, and what oil price will matter? andmberg spoke to a ceo asked where he sees oil prices going. year in the range between $60 and $65. $60 to $65, what prices do
the saudi's want? >> thanks to regulation, i think abovel price could move $65 next year. it depends if saudi arabia is trying to stick to the cuts or trying to test another way to hold back shale. then we could see a short bearish cycle before it gets even more positive by the end of 2020. alix: you mentioned the option of putting pressure on shale producers. is there going to be another option on the table, like instead of dealing with the supply side on that sense, are they going to be cutting more? what else we get them to $70 or $80 a barrel? >> the only way is to get rid of
the growth in the u.s.. i think most analysts are underestimating the potential for u.s. shale to grow, and if we are right, the only way to by to $70 is to hurt shale the end of this year. what point would you be interested in some areas of the energy market? lori: it is tough for us to get beyond our neutral position. we did downgrade the sector from overweight, but we found ourselves depending the market stance against people who want to be underweight. there are a few things beating this neutral view. we like the diffidence, we like the shareholder friendly aspect, we like this supportive oil price environment. we found energy stocks do well early on in a fed easing cycle. they just do not let it last the entire easing cycle. at this point, i have to get a better feel for the demand side and whether we can get the
growth investors to reengage. i think the limited appetite for the sector itself will be on the upside. election,deal, 2020 this is one of the sectors caught in the crosshairs. any sort of outperformance trade we get between now and year end will be something you want to take profits on. david: talk about volatility when it comes to green new deal. >> thank you so much for being with -- david: thank you so much for being with us. lori calvasina will be sticking with us. now we turn to viviana hurtado with first word news. viviana: we begin in ireland, where british prime minister boris johnson says the u.k. has an ideal amount of time to achieve a brexit deal with the eu. the irish prime minister did not sound so optimistic. they said johnson's key demand is not ideal for ireland. afghanistan is bracing for more tell about violence after donald trump called off peace talks with the group.
the president canceled secret meetings at camp david with the taliban and afghani leaders. it appears the deal was imminent, now it has unravel. now protesters in hong kong want donald trump to help. thousands watching peacefully to the u.s. consulate to appeal to the president. you can see all of the u.s. flags waving. new figures showed demonstrations impact on the economy. last month, the number of visitors to hong kong plunging 40%. 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. david: in case we want to put it into perspective, the last time i plunge that wants -- it plunged that much was 2003, the sars crisis. it is really hitting hong kong. alix: retail sales dropping by 11%.
the economy already had a contracted forecast, and unlike sars, this is an ongoing situation. lam thought maybe we would take care of this by pulling back the extradition thing, and so far the protester saying no deal. alix: what is left? you have companies pulling ipo's. damageis there long-term that even if they get it fixed -- alix: coming up, british airways pilots go on strike. all flights grounded. you can interact with all of the charts and more throughout the two hours at gtv on the terminal. check out the charts for analysis and save them for future reference. this is bloomberg. ♪
viviana: this is "bloomberg daybreak peter: coming up later -- "bloomberg daybreak." mattis,p later, jim former u.s. secretary of defense. and now you're bloomberg business flash. the ceo of nissan stepping down in the midst of scandal. he is quitting after revelations he received more equity linked pay than he was entitled to. he was the handpicked successor of carlos ghosn. nissans chief operating officer will replace him on a temporary basis. reportedly drop the valuation for its ipo below $20 billion. investors are pushing the company to delay the opening. wework plan to begin a roadshow
to begin a roadshow for the ipo as early as today. bloomberg reported wework was able to cut its valuation below the $47 billion it was worth. the uk's largest morgan -- mortgage lender was hit by payment insurance claims, so it is making another provision. the insurance policies were sold using aggressive tactics. in some cases, companies were wrongly told they had have the insurance in order to get mortgages. that is your bloomberg business flash. david: it is time for the bottom line, where we look at three companies worth watching. today we are joined by emma chandra and sarah ponczek and brooke sutherland. first we look at at&t with emma chandra in london. 8% aftert up more than new york hedge fund elliott post a $3.8 billion
state and a letter to the board outlining a plan for the company that would chart the path toward a share price of $60 a share. that is significantly higher than where shares are trading right now. it also comes with big changes or requests for big changes to the company, including divesting a number of assets. directv's, wireless, and some of its landline businesses. they also want to see direct -- cost-cutting, including splitting the position of ceo and chairman. no comment from at&t but we will be watching that closely. alix: next we are looking at apple and foxconn. sarah? sarah: it has been reported that apple and foxconn have broken chinese labor rules by hiring too many temporary workers. the claims were originally made by china labor watch, a
nonprofit advocacy group. now apple and foxconn have come out and confirm this. not affecting apple shares too much in the premarket, but something to keep an eye on. china labor watch has actually been conducting undercover investigations over the past couple of years, and one of the main findings from this report is that as soon as august, half of their work staff was actually made up of temporary workers. if you look at chinese labor rules, it is supposed to be capped at 10%. that is quite a discrepancy. apple has come out and said it will work with foxconn to resolve any of the issues. this comes ahead of the apple event tomorrow, where it will be set to unveil new iphones. david: thanks a much to sarah ponczek. the third company is british airways for obvious reasons. brooke: british airways pilots are going on strike, which has
forced the airline to cancel almost 100% of its services today and tomorrow. more than 1600 arrivals and departures. the stock fell as much as 3.1%, now it has come back, down less than 1%. the estimated cost is about 80 million pounds for this two day strike. this ist say to settle a much smaller percentage, only 5 million pounds. david: what does this say for the aviation companies more broadly? brooke: it is interesting because one of the key points the pilots are making is that british airways has been doing very well. there profits are up, they have seen rising returns on invested capital in the pilot so we want a piece of the success. they were willing to take away cut during the financial crisis when the airline was struggling to keep things afloat. now that british airways is doing better, they want the wages to go up as well. it is the price of success that you are seeing airlines become
more disciplined on the front and led to rising profits. pilots want some of that. alix: what is the pushback for the company on that? it seems fair. brooke: it does seem fair and the pilots have british airways in a tough spot. when you look at the demands they are breaking, british airways is also suffering on wall street because of the risk of a no deal brexit and the weakening of the pound. a weaker demand from u.k. customers. they are not in a position to continue to worsen the reputation by allowing this labor strike to continue. david: lori calvasina is still with us. expanded more broadly. lori: when we think about industrials, it is a sector we have the itched upgrade. we are keeping a close eye on it. we do not see policy risk in the 2020 election, but i think you have to pick your spots carefully. when i look at airlines and aerospace defense, i do not see a lot of value.
we see value in things like machinery, which are a pure play on the trade war itself. if you put the trade war aside, things look pretty good structurally. we think it is an interesting area you want to be in. it may get worse before it gets better, but that is how i'm thinking about the industrial sector. airlines, there is too much uncertainty for me. i do not see that any of that is reflected in the share prices. david: to what extent are airlines reflective of overall growth and the strength of the global economy? lori: the argument airlines will make is they are becoming more detached from global growth because millennials want to travel more, they care more about experiences. airlines have benefited from that. we have seen a huge pop in travel over the past couple of years, and that has continued to be relatively healthy even as we see weakness in other parts of the manufacturing world. whether that holds up is a legitimate question. as klmer point to make
came out with their earnings, not so great. a weakening of demand. in the euro area, you could see weakness. alix: what about the exposure to the 737's from boeing. a lot of characters need that. where does that fit into their narrative? brooke: it is two sides of the coin. when you do not have the 737 max 8, you are filling up your other planes more. that helps how much you can charge for the seats on the airplane. when you have fewer seats available, you can charge more. as you said, fuel efficiency is a big concern. fuel efficiency -- fuel expenses are not that high, but that does factoring down the road as you think about your long-term profitability. and growth demands, to keep up with demand, you need the airplanes. lori, when you're dealing
with an industry that has two players, how do you think that as a strategist? lori: a lot of hedge funds like to pile into those names and there is a long-term term strength assume to be there, the too big to fail, if there only two of them they have to be propped up. i think you have to go back to the positioning. we have seen with some of these names they have been fairly crowded, even with a lot of the uncertainty that has developed. for my money, i'm staying away. alix: thank you so much to lori calvasina and bloomberg's opinion brooke sutherland. coming up, mounting pressure on at&t. more on what i'm watching, next. if you're jumping in your car, tune into bloomberg radio on sirius xm channel 119 and the bloomberg is this app. this is bloomberg. ♪
for a shakeup at at&t. what needs to be shaken up? joining us as a bloomberg intelligence telecoms analyst. what needs to be changed? inningsis in the middle of integrating time warner, and my sense is after they bought time warner, the linear media market began to soften. that original plan of buying directv and coming out with a pay-tv app and leading with that changed on them. they have had to redirect a little bit. the latest plan is to take warner media content and compete with netflix in the streaming market. that and game adjustment has thrown them off plan. i think they are on track. i am not sure -- i know where elliott is coming and i know they want to turn up the heat on at&t, but i am not sure it is a
broken company. david: how does directv fit into that plan? at&t withctv provides a ready-made audience for that app when they come out. they have over 20 million satellite subscribers to market to, and you can cross sell wireless service. david: they are losing subscribers pretty fast. john: they are, and that is what elliott is looking at. saying that is a dying business, let's trim that off, that will immediately improve profitability. my concern with doing that is the need to fund the dividend, and they are doing that in part by tapping the cash flow generating by the satellite business. jonathan: does this highlight -- alix: does this highlight that verizon to the right thing versus going into content like at&t? john: that is a tough question. it is hard to answer. i do not know how the end game
will work out. i like both strategies. both will win. at&t is doing much better on the wireless front. they have upgraded their network significantly, and i have the sense they are beginning to gain ground in terms of network quality on verizon. david: they are a good telephone company. john: they really are. [laughter] that they moved into adjacent business and that is a tough thing to do. alix: thank you so much. john butler bloomberg intelligence. that wraps it up for us. coming up on the open with jonathan ferro, jape lost the -- jay peloski will be joining. this is bloomberg. ♪ here, it all starts with a simple...
a camera might figure it out. that was easy! glad i could help. at xfinity, we're here to make life simple. easy. awesome. so come ask, shop, discover at your xfinity store today. jonathan: from new york city for our audience worldwide. i'm jonathan ferro. "the countdown to the open" starts right now. ♪
jonathan: coming up, despite all the fears, the s&p 500 climbing back to within 2% of all-time highs. attention turning from the fed to the ecb, looking for president draghi to provide more supports as chinese exports decline more than anticipated. auto sales dropping a 14th time in 15 months. good morning. here is your monday morning price action. futures up another 10 points on the s&p 500. we add weight to the major indices in the united states, up .33%. the euro stronger as the session grows older. euro-dollar 1.1034. yields up three basis points to 1.59 on the 10 year. central banks easing into a wall of skepticism. >> monetary policy is not as effective as it used to be. >>