tv Bloomberg Daybreak Americas Bloomberg October 18, 2019 7:00am-9:00am EDT
china gdp falling come but it could have been worse. u.k. parliament votes on johnson's brexit plan saturday. pushes back on tighter controls while d.c., europe, and its cofounder warn of more power. welcome to "bloomberg markets" on this friday, october 18. i'm alix steel. we made it. my theme of the morning, it kind of could have been worse. you take a look at where we are in the market considering all of the negative data out of china, s&p futures holding around the 3000 level. the cable rate kind of going nowhere. not a lot of selling over in the bond market. time now for global exchange.
we are going to bring you today's market moving news from all around the world, from london to brussels, istanbul and washington. our bloomberg voices are on the ground with this morning's top stories. we want to begin in turkey. the country has agreed to tip a rarely halt its military offensive in northern syria, but it is not withdrawing its forces. the lifting of sanctions may come with a permanent cease-fire. theence: with implementation of a cease-fire, the united states will not impose any further sanctions on turkey's, and once a permanent cease-fire is in effect, the president has agreed to withdraw the economic sanctions that were imposed. joins usimin demokan from istanbul. how does this play out over the next 24 hours? simikin: turkey is expecting the
kurdish fighters to withdraw from the areas. president erdogan said he expects to create a safe zone once those kurdish militants have left the area, and the safe zone will be 444 kalama there's long.- 444 kilometers we also expect turkish troops will control the area. so what happens next? next week we have a crucial meeting between turkish president erdogan and russian counterpart vladimir putin. of course, russia strongest foreign player in syria, and he actually supports the syrian regime. so what comes down this week could be crucial in establishing serious future -- establishing syria's future. vonnie: u.k. prime minister breath johnson announces a brexit deal has been made. his next step is selling his
offer to numbers of parliament. pm johnson: this is a great deal for our country, for the u.k. i also believe it is a good deal for our friends in the eu. vonnie: maria tadeo joins us in brussels. what are the chains as it parliament saturday -- the changes it gets through parliament saturday? maria: it looks very difficult for the prime minister. he's on his way to london, and the prime minister is really facing a showdown saturday. he needs to convince his own mp's that this new deal is better, that this is the only way to leave the european union in about two weeks. he also needs to convince the dup that they really need to get the deal done and vote it through. the math at this point looks very tight. it is unclear whether the prime minister will manage to get this done. yesterday he made it clear to european officials that he is not in a position to get those
votes, but is hoping the situation will change in the next 48 hours. if it fails to go through, he's facing a very difficult choice. he's going to either have to ask for more time, which he always said he would never do, or take eu united kingdom out of the without a deal, and that raises all kinds of legal questions. vonnie: thank you very much. stay with bloomberg for more on x: stay with bloomberg for more on brexit all this weekend. in london.rdern is what is the interpretation of why it got pushed back yet again? we seen this story so many times, and it looks very similar to last year. this delay will give the a-list wall street bankers working on
this ipo some more time to include third-quarter results in the pre-ipo assessment valuation. it looks like they are struggling to get to that $2 trillion mark that the saudi royal family has desired. when you take a look at what exxon does with their dividend yield and put it against aramco, valuation looks closer to $1.5 trillion, and some analysts say it is even lower, including bloomberg intelligence. this well choreographed ipo they're going to have in the local exchange was going to match up with this investment forum they have in about two weeks, davos and the desert. that is not going to happen. it does not look likely we will have an ipo before december and maybe early next year. alix: thank you so much. now we go to d.c., but talking about china. third-quarter data showing with growthlowing,
slowing at the lowest rate since the early 1990's. in the current has -- in the rran has more.a cu a: we know that a trade war continues to drag on the economy . gdp in the third quarter raises two questions. will authorities now be happy to allow growth to slip below the 6% level? secondly, how much more support will they need to convince the economy to keep growing? these will be a big reminder to the delegates attending the imf meeting about the challenges facing the world economy. one of the themes here is that government needs to do norse ♪ -- needs to do more to support growth. they will still debate about how much stimulus china will roll out to support its economy. the question is, is this as bad as it gets, and are we heading
towards 5% next year? alix: still in washington, the imf world bank meeting is underway. bloomberg sonali basak joins us now. walk us through what we can expect today, and what are the key events? have thet the imf, you global outlook declining for gdp, and people talking about issues all over the world, from emerging markets, let alone china, let alone brexit. ,ou have more negative out look but on the other hand, pretty heated debate here at home. you already have a story from overnight. the imf meetings are going on. larry summers spoke at the petersons to shoot -- at the peterson institute last night. is front anduality center and will come up at all the meetings. i am speaking to larry myself later this morning. we will see where people cross both sides of the aisle, but also across the world, are really coming out on u.s.
politics coming into the next election, but also how central banks and other policymakers will address the global growth slowdown around the world. alix: thank you so much. make sure to stay with bloomberg for complete coverage of the imf world bank meetings. pierre hear from moscovici, mark carney, and many more, so do not miss that. something else i'm watching here, not long from now, two nasa astronauts aboard the international space station will make history. they will conduct the first all-female spacewalk ever. they are going to replace a broken component in a critical battery charger. nasa originally planned the spacewalk for a last spring, but was canceled because there was a shortage of medium-sized spacesuits. 1965, only 14 women have walked in space.
havee earnings market, we coke coming out as well. coca-cola operating revenue .opped estimates bag in line with what they saw before. schlumberger similar issue. they took $12 billion plus impairment charge. they say that as market conditions rather than necessarily schlumberger specific. aside from that, earnings were and regions aside from oath america up as well. things could have been worse. coming up on this program, more on your morning trade and analysis on the markets in today's first take. this is bloomberg. ♪
alix: time now for bloomberg first take. here to discuss from our in-house team of wall street veterans and insiders, vincent sassower, andmian also joining us, david kelly, j.p. morgan asset management chief global strategist. want to start with china data overnight. i theme was that it could have been worse. honestly, some of the
numbers were ok. what are you looking at? vincent: we've known for a long time that the china numbers just a bit inflated, perhaps. the conference board some seven or eight years ago presented us with then behind all -- with then, the handle on china growth was 5%, and get use to it. so we just sort of take this in stride. it does play into the trade situation. does this embolden the administration to think their strategy is working to be tougher on china going forward, or do they say enough is enough? maybe now we should come together and make peace with it? david: i think china manages the numbers. it's not just inflation. it's also wages. i think that's one thing. i do think china is slowing
down, but i also think the chinese government is determined to do what is necessary to stimulate the economy. if you control all the levers, both information and financial, you've got the ability to do that. i think that's why did administration will think this gives us bargaining power. remember, they can take the pain. there's no election in 12 months. honestly, what we see in terms of china is they've decided that the uncertainty of working with this administration, the back and forth suggests maybe they need to wait until after the 2020 election to do anything serious, if they actually want to do something serious, because if they make a deal today, it could get reversed a week later. there's a nationalist constituency. i think they don't want to be seen as weak in front of the americans. damian: if you look into the data, particularly the retail
sales and ip data, they were better than consensus, but still slowing down. over the first nine months of this year, ip has grown down from 6%, and retail sales is really the baseline impact on auto sales, down 2.2% last month versus down 7% odd last year. you've got these ace effects, nothing that is an important point because true the next two months, these data sets in prizes like korea, taiwan are going to start to improve because we got some really bad prints last year around this time, they are going to start to feedthrough. you may see a little bit of that come into play as well. david: the imf has talked about global weakness, and of course it is a very weak little economy. it is all centered in manufacturing and exports. manufacturing slowdowns are much more slow lived -- much more short-lived because there's an inventory drawdown. i think the global economy is going to be weak over most of the next year, but it is not
going to be a disaster, and it will eventually bounce, even without resolution of the trade. vincent: what surprises me is complacency over hong kong in the markets. we have bills moving to protest the situation in hong kong, both in the house and senate. you see how china reacts. how is china going to react to a condemnation coming from both houses of congress? --sn't sign that bill perhaps trump doesn't sign that bill, but perhaps it gets the votes to push past. alix: so why do things get better even if trey doesn't get resolved? were you optimistic monday? vincent: it's been going back and forth. [laughter] alix: so what's the differential you guys are looking at? why more positive? david: i'm positive going forward two years.
everyone talks about 2020, but i'm really more interested in 2021, 2022. there's a lot of political confusion around the u.s. elections. when you get past that come i don't tick we are headed towards higher tariffs in the long run. this is damaging. every economist knows that tariffs make us all more poor. when you use this as a political weapon, when we get past that, i think the trajectory is going to be down again, and when that occurs, i think that helps in terms of the outlook. but also, manufacturing tends to work in much shorter cycles than the rest of the economy. this is centered in manufacturing weakness. damian: i don't get is going to end anytime soon, especially in 2020. they're very well may be a change in the executive office in the u.s., but i still think now that the u.s. has warmed to the idea of linking national
security to economic interest, i think that is here to stay for some time. i think tariffs aren't going away anytime soon. 2020, fast for threw two 2021, you see growth is on this decelerating trend. if you look at the j.p. morgan em currency index, which is been in perpetual decline since 2011, you see signs that it may be bottoming here. i need to see real evidence that the worst is behind us. alix: vincent and i were having coffee earlier, and the would-be action we saw in the lira yesterday, yes, it is going to be difficult to take on a big position for better or worse growth when you have amazing, idiosyncratic volatility. that reminds me of cable two days ago. vincent: when you have that uncertainty in the market, for me as a traitor, we are going to
play this. even if i get run over, i have an opportunity to make my money back the second time in five minutes. but for a treasurer, cfo, someone looking to make a long-term investment, hands-off. you can't touch that. they need to have much more certainty. i agree with you on the point that we are not going to get it anytime soon. david: we have a chart in our guide to the markets were relook at the index of economic uncertainty in capital spending a year later, and the fit is like a glove. problem is economic uncertainty goes up. the problem is when everyone decides to wait and see, what they see is not good. our concern is not about can zero confidence. our concern -- about consumer confidence. our concern is about business investment. the u.s. economy will slow. i just don't think this is a 2008-2009 situation. the financial system is stable.
whatever it is, i think it will be relatively short and mild. vincent: if we have a recession, the politicians will blink on the tariff structure, and may say we will have to stay firm on huawei, but we can come up from a manufacturing standpoint -- david: that's right. from a political perspective, people say let's go with tariffs, but tariffs really hurt economies, so i would expect because of a change in administration, i expect the new president to try to wrap up trade pretty fast to actually help the economy because aiken did need trade war mix everybody continuedcause a trade war makes everybody poore r. isian: if what i said before true, em currency stabilizing, it may not be going up anytime soon, but why wouldn't you try to take advantage of some of the
duration gains? vincent: in a heartbeat. let's focus on saturday and see what happens. i know you wanted to talk about this earlier. alix: and we will get to it, but we do have to take a break. i can't believe we went 12 minutes and did not talk about brexit. we will get to northern ireland in a few minutes. thank you both very much. david kelly of j.p. morgan asset management will stick with me. coming up, international drilling gives the world's biggest oil service or a big boost. a slowdown in u.s. prank -- u.s. fracking, but a huge impairment charge. this is bloomberg. ♪ ♪
's u.s. market business losing market share, all categories falling for the sixth quarter in a row. schlumberger says international revenue is helping offset fracking in the u.s. it posted third-quarter earnings that helped beat estimates. it took a $12 billion write down, most due to goodwill. that is your bloomberg business flash. alix: thanks so much. i want to dig in more on slumber earnings schlumberger with david kelly, j.p. morgan asset management. what were the bright spots for you? david: north america not as bad as feared. some better activity in drilling, better activity in pressure pumping. pricing still week, but north america is where everybody is scared to death. although the fourth quarter is ak, the rig we
count is pretty good. international coming back has been the positive side of the story. they delivered on that as well. that was led primarily by europe , central asia. latin america was weak. some geopolitical tension in ecuador, projects sloping in argentina, but bottom line, they beat the earnings number after barely making the number last quarter. alix: the impairment charge, almost $13 billion. they say it is the market environment. what do you make of it? david: i think that is weakness in the stoxx, and that was -- in the stocks, and that was largely right offs. that does not reflect the current fundamentals. no huge surprise there. they alluded to that in september in the investor conference. just a recognition of reality more than anything else.
importantly, they made the free cash number. a lot of folks are concerned about the dividend. there's a lot of focus on that. i huge jump in free cash in the third quarter is a good sign. alix: definitely. thank you very much. we get halliburton monday. this does not feel like a good read through from north america, but we will see. much more much more on earnings. we are moments away from american express. we will talk about northern ireland. much more, coming up. this is bloomberg. ♪ much more, coming up. this is bloomberg. ♪
s&p futures right around the 3000 level. one area in europe getting hit is the auto market, down by over 1%. a lot of that is were no coming in with this up -- is renault coming in with disappointing numbers. the cable rate down by just 0.1%. steeper, 15,little 16 basis points. we are no longer inverted. we have to remember that. what does a steeper curve wind up meaning? earnings keep trickling out. take a look at what is happening with american express. earnings on adjusted basis better than estimated, $2.08. revenue coming in at $11 billion. a good read through on the consumer. david kelly of j.p. morgan asset management is still with me. i say not as bad as it could
have been. what do you say? david: it's about where we thought, but this issue of expectations, 80% of companies give these earnings numbers every single quarter, so these expectations aren't expectations. areon a yearly basis, we still tracking about 2.6% negative overall. over 4% negative if you exclude the sort of buybacks of shares. we think there's just enough positive, but part for the course third quarter. low single-digit earnings growth going forward. that is assuming that the economy keeps growing. we are in a very good place, but we don't have much moment to him. alix: there's two stories and hearing for 2020. one is that earnings expectations have to come down. the other is that it is already baked in. which is it? david: there's a little bit of an artificial game.
analysts are always very pessimistic about the quarter we are in, and get a critically optimistic as you go out. it is always the case you have to bring down those estimates, and they will. but when you run models, what it shows is that margins are very high. this country is producing extraordinary earnings given the level of gdp, but it is hard to hold that lead. for stock investors, you've just got to be a little nervous here that those margins are very hard to build from. alix: at also recent the question, when you have a earnings estimates that are strong for a sector, but it is highly valued, what do you do? this is a good example of that, consumer versus industrial stocks. the white line is the performance, and the blue earnings estimates. obviously, consumer discretionary has been trumping on performance. how do you think about something like that? david: what i try to do is not so much look at that distinction come about what do people dislike for some fundamental
reason? what do they love for some fundamental reason? they've done very well, and they are sort of pretty nervous about financials and energy because those have had big swings in the past, both of those sectors are fundamentally more stable than they have been in the past, and maybe they are a little too cheap. obviously, people like u.s. stocks. they dislike international stocks. of the. is about 55% world stockmarket capitalization. it is about 57% of world stockmarket ownership. we are not just the big stockmarket. we are also the big buyers of stocks. americans who are pessimistic about the world tend to underperform come but i think that is the prejudice. i think the trade war is going to go away with it a year. i think trade tensions will diminish. when that happens, the dollar will come down. there's more opportunity there. alix: so emerging markets?
david: emerging markets get hurt much more than other countries in a trade war. they've got the potential bounce here. that's how i've tried to play this over the next few years. thinking, to get your a lot of analysts and strategists tend to look at this in the past. this is what happened last time we had a recession. the oaktree capital co-founder had an interesting thought. "at minimum, negative rates mean increased uncertainty, and we have to proceed with more trepidation. whatever we knew in the past about how things work, i think we know less when rates are negative." the idea is you throw everything out. david: it's kind of like the start of "anna karenina." all recessions are kind of unique. alix: you are quoting anna karenina to me, and also lsd.
[laughter] david: but they are different, because the last one was a financial crisis. that's not going to be the next would -- the next one. this slowdown is about manufacturing. it should be much shorter lived. both in the u.s. and around the world, the next recession will be shallower. it will be hard to get out of a shallow recession, mediocre recovery. importantly, the last two recessions in the united six have been associated with a 50% drop in the stock market. that shouldn't have again. we think a 25% market correction is much more typical of market recessions. it,hould pay attention to but people shouldn't change their long-term planet guess someday we will have a recession -- long-term planning because someday we will have a recession. the: we will speak to oaktree capital group cochairman and co-founder at 10:30 eastern time.
it is now time to get a look at what is making headlines outside the business world. viviana hurtado is here with first word news. viviana: a victory turkey's president erdogan has wanted for years. turkish forces halt a defensive in northern syria. kurdish fighters will be forced to retreat from the battlefield. they were once u.s. allies. turkish forces will not withdraw. kurdish leaders say they will not stand for turkish occupation. the acting white house chief of staff backpedaling on controversial statements about ukraine. mick mulvaney saying the white house did withhold almost $400 million in military aid to ukraine to further president donald trump's political interests. that undercut the president's denials of quid pro quo. democrats are calling the statement a potential turning point in the impeachment investigation. he now denies saying what he said. boris johnson now hast the sales
jobs of his life. the prime minister must sell his brexit plan to skeptical members of parliament and vote on it tomorrow. he will also have to convince a number of opposition lawmakers. if johnson fails, the u.k. may have to delay the exit day for a third time, or could leave the eu without a deal. that date is october 31. 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 viviana hurtado. this is bloomberg. alix: thanks so much. david, what happens saturday? david: if i had to bet, i bet that this agreement won't go through the u.k. parliament. it will be a close call, but boris johnson has made a lot of enemies in the u.k. parliament. while i think this is ultimately where we are going to end up, i don't think it will go through. boris comes up with an agreement. britain is going to exit.
what you always had to do was have customs checks on the i received -- on the irish sea. that was always going to be the ultimate agreement. what has happened is it goes down, then boris says i've got a severe minority in parliament. we can't get anything done. we got to have a general election. it will be hard for the opposition to say no. i think brexit does get postponed until january 31. i think there's a good chance that boris johnson will have an overall majority in the next parliament. then the deal they just struck with europe will actually become the law. i think that is the most likely scenario, the number scenario for everybody, that they would have another hung parliament after that election. somebody talked about brexit, an irish woman politician, said it was like being eight not half months pregnant for three years.
alix: oh my god. that would be terrible. [laughter] david: that's how it feels for a lot of politicians. alix: that is the best analogy. are you playing this at all? david: to the extent that we are a little more optimistic on both sterling and the british economy weg run, a year are to out, do recognize a lot of uncertainty over the next six months. there's a chance we will come to an agreement. as an economist, it is very hard to see an upside in brexit. but if you come to a deal, you will try to then diminish the negative impacts of brexit i having zero tariffs between the u.k. and europe anyway. alix: bloomberg spoke to the deputy governor of the boe, and he was basically like, if we wind up getting a deal, the case for measured rate hikes could be in play. is that tone deaf?
is that a risk we have to start thinking about? david: i think central banks around the developed world ought to be raising rates. low rates aren't helping anything. alix: doesn't that make it worse when you are already looking at a slowdown? david: how would it make things worse? if you say you've got to borrow money now because rates are going to be higher later, if you push up the interest earned by savers, all of that stimulates the economy. this is the thing i think central bank's have got wrong. any medicine taken to an extreme turns into a poison. when rates turned negative, they become poisonous to aggregate demand. raising rates and staying more confident in the outlook can only help the british economy and developed economies in general. alix: david kelley of j.p. morgan asset management will be sticking with me. stay with bloomberg all weekend. we have more on the critical ofe in parliament's and all the important details of the next 48 hours. did gm strike is in week five
europe, a 14 percent drop. still, it has significant backlogs to clear. they struggled to fill a surge in orders the last couple of years. the aramco ipo is on hold. the timing of the operation will depend on market conditions. the delay gives time for wall street banks to incorporate third-quarter earnings in their valuations. the banks are struggling to meet the $2 trillion valuation aramco wants. at&t holding talks with activist investor elliott management. elliott trying to force changes at the media conglomerate after acquiring a $2.3 billion stake. at&t could agree to sell or spin off assets. there's also talks of shuffling the board. i'm viviana hurtado. that's your bloomberg business flash. alix: time now for bottom line. we will look at three companies worth watching this morning. we are joined by sarah ponczek
and brooke sutherland. first, want to take a look at renault after its profit warning. caroline, take us through the details. 3% tone: renault expects 4% decline in revenue, i think by a global downturn in cost, to also increasing cuts electric cars. shares at renault fell as much is 15% earlier today, making it the worst-performing auto stock in europe so far this year. this comes one week after the ceo of renault was considered as the last holdover of the carlos , ousted for the new , who is already questioned the renault plan. investors are worried about a
questionable dividend cut and asset sales in the future. renault still holds a big share of nissan. investors and analysts were surprised by the magnitude of these profit warnings. alix: thank you so much, caroline connan from paris. sarah is taking a look at beyond meat, in a really rough week. sarah: it has been a rough week. shares lower to the tune of almost 2%. if it holds, this would be the ninth day in 10 that beyond shares have fallen, now down roughly 20% from their top. it is still this year's best-performing ipo through july, up 800%. why the fall now? there hasn't been any real news.al some analysts are saying valuations had just got too far
ahead of themselves too quickly. they need to come down. to earth just a little bit. some are also pointing to evidence of increasing competition in the alternative meet space. also, that 100 day holding period after an ipo is set to expire at the end of the month. you put it altogether, and shares of beyond meat are lower. alix: these are company we are watching his gm in its negotiations with the uaw. walk us through where we are. it felt like we were going to get a deal yesterday. brooke: it felt like we had a breakthrough in the tentative agreement reached, but now what we are hearing is they want to wait call off the strike until they members ratify this deal come which to me as a single they are concerned that maybe they did not get everything their workers want. you could see some pushback to this. the union is embroiled in a corruption scandal, so they have a lot that they have to prove. they have to prove their own credibility to that workers who have been on the picket line, giving up their wages, managing it all on only $275 all week.
alix: do you have a sense who has the upper hand in this? brooke: i think where they envision the pushback is mostly the ohio workers where gm is planning to close a plant. that is something the union is planning to salvage. they are not going to get that. it is not clear how many employees they would need to run that plant. gm has said they are going to build an electric battery plant in the nearby facility come but they are going to pay less than they were paying those workers at lordstown. that's where the pushback might be. but this is a great deal economically for other union workers, who have pretty decent payouts, retirement offerings to some of those who would be coming out of that lordstown plant. wage increases, good health care benefits. i think that is really the sticking point.
alix: i learned that electric vehicle parts, you need 11,000 parts versus 30,000 for a regular car, so that is really interesting. power move to labor, what does that tell you about where we are? david: i think workers in theory should be any a much better bargaining position. americans say anybody can get a job, nobody can get a raise. when i think about the areas unionized within the many factoring sector, some of those workers are in the weakest position because of the global manufacturing and market issues. where scarcity is the greatest are the places that are not actually unionized. overall, we will see wages go up. i think we will see more strike action. but i'm not sure we see union wages go up that much going forward. alix: in terms of margins, if they do wind up paying, at some point they are also spending a
lot of money on electric vehicles that aren't profitable yet. brooke: some pushback on whether this is the industry where you see a resurgence of the labor movement. to your point, automakers are exposed to international competition. already at a disadvantage they are from a negotiating perspective. we had the railroads reporting yesterday and earlier this week, and they are cutting a lot of jobs as well. , but younot unionized are seeing a lot of job cuts. david: the problem is automation and robotics are really at the forefront in all of these many factoring industries and transportation industries, and that is making it difficult for workers to get a foothold. it is in the services sectors that it is hard to replace workers. ultimately, we will see stronger wages, but not necessarily in manufacturing. alix: good point. devin kelley of jp morgan asset management, thank you very much.
787as is turning a boeing into a flight laboratory this weekend from new york to sydney to see how the crew and a handful of passengers deal with a 20 hour flight come of the world's longest. part of the experiment is not feeding passengers right away and serving spicier food. qantas says it expects plenty of demand for the service. it's already seen high demand on the perth to london route. typically for long-haul travel, it gets 75% to 80%. people are paying a premium come by significant premium, on business class out of the u.k. to fly on that service compared -- and a flight lands in l.a. and goes on to new york, and we feel it, so the demand is there,
and we think there will be premium for it. alix: flights from new york to sydney will to begin until 2022. what is the deal with the spicy foods? coming up, a look at the selling measure of algos. if you're jumping into the car, turn into bloomberg radio, heard channel 119 and the bloomberg business app. this is bloomberg. ♪
alix: time now for traders take. joining me is vincent cignarella, voice of the bloomberg audio squawk. what is the trade you are looking at today? vincent: it's not a function, p.'s an ap you can get a free trial, test and see if you like it. i love this one because it's we time trading. see the proprietary cigna will give you buying and selling pressures, and the smart
lines, if you can see the green lines in between and the redlines, that shows the dominant pressure at the time. this works across all assets. i expanded it over three days inause it doesn't show well an overnight session, but i tend to watch it on a one day, five minute chart. you can see the changes in an asset class as the asset slips. for a day trader, it is a pretty cool tool, something to add to your toolbox. alix: how sensitive is it to tweets? vincent: it is really sensitive to flows in the market. it will give mixed signals, as everything tends to do. , thehen he signals cross broader signals are really
effective, and you can see that broad by signal, followed by a sell signal. get that little tweak yesterday. you can actually follow this through the day and have a little fun with it. the inventor of this spoke to me about this, and said this particular signal is what a lot of the longer-term hedge fund traders play. alix: excellent. i love that. traders can get that free trial of this proprietary model on . coming up in the next hour, interviews with dan tarullo, former fed reserve governor, and chris hughes, facebook co-founder. this is bloomberg. ♪
daybreak" on this friday, october 18. let's take it from the top. temporarilygreed to halt its military offensive in northern syria, but not withdrawing forces. >> turkey is expecting the kurdish fighters to withdraw from the area. alix: meanwhile, kurdish fighters, once u.s. allies, have been told to withdraw. it is all part of an agreement with vice president mike pence, after meeting with turkish president erdogan. china at, growth slowed in the third quarter. >> china's third-quarter gdp came in below the forecast, the weakest number in more than three decades. alix: gross domestic product the less than expected, at slowest pace since the 1990's. boris johnson trying to convince skeptical members of parliament to vote for his. plan tomorrow. if the deal fails, the u.k.
could leave without a deal. pm johnson: this is a great deal for the u.k. i also believe it is a very good deal for our friends in the eu. alix: nasa making history in space today. you're looking right now at live shots of the first ever all-female spacewalk taking place. the two americans are replacing a broken component on the international space station. they will be outside the spacecraft for pfizer a half hours -- for five hours. in the market, you had that china gdp coming in at just 6%. you worry what futures are going to do. absolutely nothing. currency market really doesn't do anything. seeing a little bit of selloff in the bond market, but not a lot to write home about in the u.k. joining me for the hour, david westin, host of "bloomberg balance of power." this is like a reuniting.
it's great to have you for the hour. david: great to be here. alix: you had a great night last night. david: i did come of the al smith dinner. general jim mattis was the speaker. he was quite funny, very inspirational. one of the things he said, the day before, president trump said he is the most overrated general in history. he said he was proud of that fact. this is why. >> i'm honored to be considered that by donald trump because he also called meryl streep an overrated actress. [laughter] so i guess i'm the meryl streep of generals. [laughter] [applause] frankly, that sounds pretty good to me. and you do have to admit that between me and merrill, at least we've had some victories. interestings because he's been very impolitic, but -- very
politic, but he had some jabs at the president. alix: i didn't expect him to be funny. david: he was funny. but the main thing, very inspirational. he went back to abraham lincoln and said that we've overcome a lot more, and we can overcome again. alix: turning to the market and the general environment, imf general managing director david lipton says the economy is in gradual synchronized slow down. he spoke to bloomberg at the imf conference in washington. economy is in gradual synchronized slow down, and it is important that we do something about that. the risk has been trade tensions and the uncertainty that comes from that. alix: joining us from minneapolis is jim paulsen, leuthold group chief investment
strategist. on? side are you are you of the mind that we could be bottoming out in the pmi's, and things could get better? jim: i think we are definitely in a slow down. there's no doubt about that. and it is synchronized across the economy, but i think it is coming to an end. i think we've seen stimulus put in the pipeline not the sincerely by the federal reserve or the ecb. they relate to the game. stimulus by the free market bond vigilantes. they started easing last october across the globe, and money supplies also started coming up late last year. i think that stimulus is starting to work. you are seeing economic surprises in most places around the globe that have come up a little bit. you're seeing the biggest theoming bond yields across globe, not just in the 10 year ,reasury, but the german bund
japanese 10 year. all of those have made significant upside move. the yield curve has steepened in the united states as well after being inverted. pricesing commodity bottoming. stock markets in international markets taking over leadership. that is a big seachange that i think is a prequel to better economic growth down the road, so i am more on the side that we've been in slow down, but it might pick up in the coming couple of quarters. david: that's really encouraging, and i hope that's right. at the same time, people have been worried about the future and have been more cautious. a lot of people think we cannot have that yield curve continued to steepen the way it has if the fed doesn't stay ahead of it with more rate cuts. that's not very good news. jim: i think you're right. the yield came down because of fear. we had tremendous recession fear in august when the yields collapsed.
i think it's encouraging yields are going back up. that's showing a little confidence coming from the bond market. i don't know. i think the fed will come through with another rate cut. right now, with the 10 year treasury sitting a little over 1.75%. but maybe if the economy continues to improve, the 10 year treasury can move back over to present, and we wouldn't really have an inversion problem. i get that it's uncertain whether it is going to happen or not, but i do see some evidence of things getting better. i totally see that we had a slow down in the rearview mirror. there's no doubt about that. but i also see many components of strength, including the consumer staying fairly strong. yesterday's report at bloomberg best consumer comfort stayed really strong actually went up. i think there is good news to
mix in with the fear. alix: david, you've been here six minutes and you talk yield curve? you missed it. you missed the early morning. [laughter] alix: on the counter to that, ray dalio at bridgewater talked about big, unique things happening in the global economy awash with money. "the cycle is fading and we are now in the world of great stags> -- of great stags." when you have disparate -- of ."eat sag when you have disparate views, where you stand? --jim: all of that has caused people to think recession is close. to me, that fear has done a
couple of things. i think it says that risk on assets are underpriced right now , and defensive assets, gold, the u.s. dollar, defensive sectors, as simply -- sectors, investments are too popular. if things get a little better, even if we still have relatively modest growth, i think you try to sell some of those defensive fear assets and look at adding a little more cyclicality and risk on assets to your portfolio at relatively cheap prices. that includes the cyclical sectors in the united states, small-cap stocks, emerging markets and international investments. i think a lot of those are cheap , under owned, unloved, and pretty reasonable values right now. david: can the united states continue to buck the growth trend in the rest of the world? is there any prospect for china
getting back on track? europe getting back on track? jim: i think so. i think economic surprises are innot only here, but also up many other parts of the globe. japan has also had a big increase in their positive economic surprises recently. even in the emerging markets, including even china, that index has lifted. europe hasn't been so good so far, but they've had a lot of stimulus. the german bund was 80 basis points in january 2018, and went to -60 not that long ago, and now it is climbing again as well. in the emerging-market -- or, in the euro zone, i should say, their primary etf index has been y etf inrming the sp the united states for the last couple of months.
in the last few weeks, by a pretty big margin. i think that is suggesting from both the stock in the bond market that yields are up, and stocks are outperforming on the -- on the world singing, and that is a good sign that maybe european growth is improving as well. alix: coming up, boris johnson's next big battle. he's on the charm offensive today, trying to sell his brexit deal ahead of tomorrow's vote in parliament. i don't know if i would relate charm offensive to boris johnson , but anyway, that key vote coming tomorrow. this is bloomberg. ♪
deal with the eu. the next step is convincing his own parliament to accept it. maria tadeo joins us in brussels. what to be expect the outcome to be? maria: we have a deal between the eu and the european union, but i'm sure this is ringing a bell because we've been here many times. all eyes are in london, and we are prepping ourselves for a real showdown between the government and mp's. the prime minister essentially has 24 hours to sell this deal as the new and improved deal, and make sure he can get it through the finish line saturday. at this point, it is not clear he has the votes he needs to convince his mp's. he needs to convince the dup. the dup have said they are not going to vote in favor of this deal. if he is not able to get it through, he feeds is a very tricky, politically toxic position. does he ask for more time, or is he willing to take the u.k. out of the european union without a deal on october 31?
of course, that raises political and legal questions. the europeans are saying they just want to wait and see in a conversation next week before granting an extension if the premise to fails. the best case scenario for both sides is hoping that he is able to get the deal done. alix: thanks so much. still with us from minneapolis is jim paulsen of leuthold group. i want to use brexit as a example of, if you remove the headwinds, what kind of asset rotation would you suspect? is it sustainable? what is your take on that? jim: well, i think that with some of these issues, if cleared up, it would help a lot. it's created a continued headwind that investors have faced. if brexit was to come to resolution at the same time that china and the u.s. declared a sort of cease-fire for a while on trade wars, and the best news
would be if we had a pickup at the same time in earnings momentum, which, may be the early reports out of the u.s. markets this week suggest we may be having. if that trifecta came together here, that would be helpful for the overall stock market, and i think it would be helpful for risk on portions of the stock market, or the cyclicals, and more importantly, the international markets. david: we are in the middle of earnings season right now, only 20% in. something like that. [laughter] david: where do you think we will come out when this is over? do you think we will show an uptick? jim: i do. i think it's been a pretty good start to the season. that's part of the reason stocks and bond yields have been lifting of late. i don't think it is going to be a tremendous outperformance. i think it is going to be something like we've seen all 80%, where we have a 75% to
beat rate by the end of the earnings season. what is going to be most important is ceo commentary on what they are seeing here in the arere, how competent they maybe conditions are getting a little better and what global markets look like. so far, i think that's been ok overall. if a earnings turn up, earnings have not been coming down all year. if they turn up from one point 75% 10 year yield, that's quite a bit of upside value for the stock market. the last time earnings estimates on wall street were rising, we had a 3.75% 10 year treasury. it would be a pretty positive event, particularly if some of these other headwinds also clear up at the same time. david: if that's right, how much pressure doesn't put on the u.s. consumer? as a practical matter, it is not a lot of confidence in the c-suite. jim: i agree with that. there are some confidence
measures showing pretty weak business confidence, and that is concerning. if the economy does not pick up now, over the next three to six months, then i think fears are going to intensify and recession is a real risk. tut i would put that more a 30% risk. i think the consumer is strong. i think business they're starting to see momentum again overall. i think we will turn higher in the next big move in the market. alix: i have a chart on my terminal i wanted to pull up for you, the s&p versus s&p earnings estimates. earnings estimates pretty much flat throughout 2019, whereas the s&p has granted higher. if we get estimates that continue to churn up, what have we learned about when we get higher yields, where the rotation goes? that if it turns
higher, number one, there's upside room for equities. we've got the s&p right now at a little over 19 times trailing earnings. that's average since 1990 for the last 30 years, so i think there is upside here if earnings turn higher overall. but i think if yields start to go up again on the backdrop of economic momentum improving, you're also going to have a rise in inflation expectations coming out of that as well. there are several scenarios that favors. certainly, the financials are going to be highly favored, both mid-cap and larger financials will do very well. if inflation expectations pickup, i think you are going to see things like the materials and energy become a real play, and the industrial stocks could do pretty well, at least for a time against that backdrop. if you get general
economic moment them across the globe coming back, i think that's really favors the international markets, as well as smaller cap stocks, which have been clearly out-of-favor. we could have a completely different leadership going forward in the balance of this recovery if it is on the acceleration real in global activity. david: you raised emerging markets. given your view of where the economy is and where it is going, what are the potential yields in bond and stocks in the emerging markets? jim: i liked them a lot. i think they've been really out-of-favor. they've underperformed for so long. they are way underweighted in most portfolios. most have given up on them. they are already starting to outperform in the last couple of months, with little fanfare. has matchednese etf
the pace of the s&p 500 etf since may, even though the trade war continues to go on. there are a lot better valuations. you still got part of the world growing at least twice as fast as the developed world, even with china slowing to 6% growth. that is still three times the growth of the united states, for example. they are selling at multiples less than what you pay and a lot of the developed world markets. so i think there's a lot of potential for upside move in the latter part of this recovery. alix: jim paulsen of leuthold group, thank you for joining us. it is interesting because we wind up wrapping all of this together. do we hear central banks rate raising -- do we see central bank rates raising? jim: interesting question.
if you watch what happened with jay powell at the end of last year, he got burned so badly when they raised rates a little bit. look at what's happened to him. alix: good point, and the political pressure for sure. coming up, mick mulvaney's confused defense of president trump. more coming up next. this is bloomberg. ♪
viviana: you're watching "bloomberg daybreak." shares of american express are rising. the credit card company posting third-quarter earnings that beat the average estimate. it reaffirmed guidance for the full year. amex says revenues rose 32% to a record. shares in danone falling the most in two years. the yogurt maker lowering its outlook for the full year. the u.s. yogurt business lost market share, total volume across all categories falling for the sixth quarter in a row.
schlumberger says international revenue is helping offset a slowdown in fracking in the u.s.. it posted third-quarter earnings that beat estimates. schlumberger also taking a $12.7 billion right down, most of that due to goodwill. alix: thanks so much. something we are also paying attention to, what is happening in the white house. a push and pull over what president trump actually meant and did with ukraine. what was interesting yesterday was a very long press conference with mick mulvaney. here's what he had to say about whether the president abused his office when it came to withholding aid. >> we look back to what happened in 2016. it was one of the things he was worried about was corruption in that nation. >> let's be clear, what you described is a quid pro quo. funding will not flow unless the investigation into the democrat server happened as well. >> we do that all the time with foreign policy. david: this is so fascinating.
mick mulvaney, by his own admission, was the person in the room deciding not to release the funds required by congress. he is basically saying we wanted them to investigate the 2016 election, and you could see john carl, by old colleague, was sort of flabbergasted. he said, absolutely that is what i'm taking. but then he came out and said there was absolutely no quid pro quo between ukrainian military aid and any investigation into the 2016 election. he said maybe most people misconstrued it. call -- iat i would was listening, saying, are you really saying that? we withheld the aid even though it was required by congressional statute in order to investigate vice president biden. alix: so why is impeachment so difficult? david: well, because -- alix: or putting it to a vote? david: president trump's position is if i was looking
into corruption, how could you be against me as president of the united states? he even goes farther than that. he said the reason we have to go to foreign countries, when mr. mattarella, the president of italy, was here, is because the obama administration was so sinister, they tried to hide it by going to foreign countries. alix: that was a very interesting press conference. a gasp is when you tell the truth by accident. alix: i love that. coming up, former fed governor dan tarullo will join david and i next. this is bloomberg. ♪ everyone uses their phone differently.
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switch and save up to $400 a year on your wireless bill. plus, get $250 back when you buy an eligible phone. that's simple. easy. awesome. call, click, or visit a store today. alix: this is "bloomberg daybreak." i am alix steel. the two key themes in the market is a lower dollar and higher yield. if we take a look at where we
are the markets, 3000 is where we are sitting on the s&p. it will be about the changing dynamics in the treasury market as well as the currency market. if you switch up the board, the curve is steeper. you laugh, but it is true. it is getting steeper. the dollar kissing the 200 day moving average. what are the implications? we see a rollover in some of the positions. global growth front and center at the mf meetings in washington. financial leaders wait what bankers can and cannot do about it. >> there is a slowdown in the world economy. we have to avoid further slow down. >> the global economy is in gradual synchronized slow down and it is important we do something about that. >> it is useful for central banks to lower the rates further. >> we have gone through a. of expect -- we have gone through a period of expansionary monetary policy.
there is not a lot of space left. >> we are reaching a point where monetary policy can generate a small benefit in terms of economic growth. it might generate less growth in the future. >> i think central bankers are heroes. the only problem is we cannot expect them to be heroes again and again because even the central banks run out of ammunition. >> i think there is a consensus built on the need for fiscal policy and structural reform so we can have a stronger growth going forward. joining us on set is dan tarullo, harvard law school visiting professor. thanks for joining us. what i like is the hero thing. are you all playing for the same team? everyone agrees that growth is slowing, but no one can agree on how to fix it. daniel: that is true.
what you see at the fed are disagreements or uncertainties about three issues. to what degree is this a secular problem? inflation is stuck below target. second, to what degree are the cyclical factors behind us or still to come? the next issue is related, but more important than people understand. the traditional idea has been that if you are close to the zero lower bond, you want to act proactively because you will not have that much room to stimulate if you go into recession. for several years, in other people on the fed described to this notion that you are careful about raising rates because you do not want to do anything that might tip you into a recession. there is some question around some of the fomc members as to whether that approach is actually efficacious given the risks of things like trade and geopolitical uncertainty. third, the fed has itself in a
position where the markets are expecting more stimulus, and they may be a bit worried that if they do not deliver, they may induce a shock from the markets as opposed to assuaging the markets. david: if the fed has to choose between the markets it expecting something in inflation expectations, which do they pick? isn't part of the problem inflation expectations are suppressed because the fed keeps cutting. inflation expectations are suppressed. if they keep cutting, of course expectations are suppressed. it is partly a communication problem. what the fed would hope would happen is they cut rates because they are trying to ensure they are trying to meet inflation expectations and meet the target by stimulating more growth. there is this question as to what is affecting inflation expectations. in the latest new york fed
survey, it was suggested expectations are becoming unanchored. david: in fairness to the marketplace, they have tried it again and again and has not worked. at some point, the marketplace says we do not believe that by cutting rates it will increase inflation. daniel: you have the difference between consumer expectations and market expectations. the market expectation is easy to quantify because you look the differences in yields. consumer expectations, which should play a big part in the operation of expectations, those have been better anchored, at least until recently. alix: why is it so hard for central bankers to agree on what to do? dissents in the fed are one thing. dissents in the ecb field bananas. how contentious they seem to be. would you have expected that to happen? daniel: i think it has been simmering for a long time, to tell you the truth. there has been opposition to mario draghi almost from the
minute he said he would do whatever it took in order to keep the euro zone growing. with the approaching end of his term, that opposition felt strengthened and they very said that if christine lagarde wants to continue mario draghi's policies, she will have a struggle on her hands. david: which makes her job particularly difficult. mario draghi used up a lot of the capital in stimulus. does that make her the perfect person to go in because she is not an economist? she is more a politician or lawyer, sort of like jay powell, or does it make her plight more difficult because she is not an economist? given the job christine lagarde did at the fund with a very difficult situation, a lot of those skills will be highly relevant to running the ecb. the second question, which you alluded to, is there something
like a consensus of what we should do that she can use as her base for moving forward? at this juncture, it is not clear that is true. where have mario's allies been over the last two weeks as there's been all this criticism? you've almost heard only criticism. alix: it has been staggering. when you said what are the options and how you agree, you can make that debate for the fed. the san francisco vet had a paper talking about negative rates, saying they might not be that bad. analyzing reactions to negative interest rates, so the yield curve for government bonds in those economies has shifted lower. this suggests negative rates may be an effective monetary policy tool to help ease financial conditions. i found this little surprising, i have to be honest, that this would come from a fed paper. daniel: the fed tries to be analytic in different parts of the fit -- different parts of
the fed do try to do straightforward analysis. the point in the paper was a discrete one. yes, you can see the impacts in the yield curves with government securities. it was very careful to say that is not the only set of issues with negative rates. with negative rates you have the psychological issue of what it means for people to feel like their savings diminish rather than grow. for that reason, you see in the euro zone they have exempted retail deposits. when you start exempting things, you limit the efficacy negative rates might have. the second thing, as we are seeing in the euro zone, switzerland, once you are into negative rates for an extended time, it seems hard to get out of them. of themsay the dangers are not so much the short-term, what is it due to banks and all of that, so much as what does it
project about the economy and are you going to be able to pull us out of using them eventually? david: what about the basis of the analysis. i am mindful of the tricking us of counterfactual spirit look at japan and europe. negative rates have not given you a lot of growth. how far can we go in saying what would've been and it would've been worse daniel:? daniel:-- and it would've been worse? daniel: the counterfactual is quite difficult. if you hold gdp steady in japan, your per capita gdp is rising. i would say this gets us to the big question of what is the feds new approach to monetary policy going to be? in a way, in answer to your first question, i think there is a bit of treading water. they are going meeting to meeting, almost waiting for the question of do we have a new approach to monetary policy that
helps us answer some of these questions of what to do. is it more forward guidance. is it a ben bernanke idea of trying to get average prices up. until they get that, i think you are seeing different camps in the fed who have their own working assumptions, and they have not come together on an agreed approach. alix: jamie dimon has suggestions for the fed and what they can do. this was on the earnings call this week, jamie dimon was saying they had money to go in and help the repo market but they cannot deploy it. they would've been happy to do it. the idea is it is your mark -- the idea is it is your fault. it is the regulation that prevents them from going into the market and regulating. daniel: the banks were quick to identify regulation as the problem. different banks and bank lobbyists identify different regulations. there was not a totally cohesive position. a few of them do not seem to hold much water.
jamie dimon mention something in the earnings call that does bear looking at. that is the expectation for liquidity around the resolution plans. i would say i have always had a little bit of a concern about the post liquidity regulation generally. i am more concerned about whether liquidity will be used during stress periods. there are two big questions. situation inwant a which the banks are intermediate in as much short-term funding as markets want? that was what led to the crisis in the first place. there is a reason why that regulation is in place. secondly, the treasury market has changed. 15 years ago, who was the incremental buyer of treasuries? the people's bank of china. nine years ago it was the federal reserve. today it is second-tier primary dealers.
that means it has to be financed. how's it going to be financed is an open question right now. just as with monetary policy, i think there is a set of deeper questions as the fiscal deficits increase during peacetime and non-recession situations. it will have to be talked about before you have a sensible resolution to things like short-term liquidity. alix: a great perspective, dan. we appreciate it. former fed governor dan tarullo. time for follow the lead. a deep dive into stories making headlines and moving markets. today we are looking at the ongoing debate of regulating big tech. here's what some of the democratic presidential candidates have to say. >> we need new solutions and a new toolkit. >> i am not willing to give up and let a handful of monopolists dominate our economy and our democracy. it is time to fight back. >> they have to be broken up or regulated.
right now we treat them as a utility, when in reality they are marking to a publisher. treat them like the publisher they are. >> if we're going to talk seriously about breaking up big tech, we should ask if people are taking money from the big tech executives. alix: now the cofounder of the company at the center of the facebook debate, a former lawmaker, are spearheading a -- thanks very much, great to see you. chris, for you, why is anti-monopoly the way you will go better or does it go in tandem with regulation? chris: it is not an either or. what we are seeing in the country's bipartisan consensus on the left and on the right that corporations have gotten too large, too big, and that concentration is affecting everyday americans, specifically because the corporations have
written the rules of how it works. what we are trying to do with the fund is moved $10 million over the course of the next year and a half into research, , advocacy, and storytellers who elevate the conversation. anti-monopoly is a broad term. ,t encompasses antitrust work but it also encompasses regulation. a good example is the problems with big tech. i am on the record for thinking facebook should be broken up and separated. i also do not think that is enough. we need regulation that guarantees interoperability, data portability, basic privacy and security, and all of that is about writing in the power of the big corporations. that is why we call it anti-monopoly. the problem is that big. david: let's talk about what the problem is. is it an economic problem or a democratic problem. those are two different issues. beenntitrust laws have
directed at economic issues, not social issues. tom: on the economic side, the antitrust was cut in half because it was about trying to ensure competition and protect consumers. the the 80's, it focused on consumer and not the competition. that has been at the expense of small businesses across the country and help spur geographic consolidation into fewer and fewer cities, where the jobs were concentrated. you see the memory of -- david: part of the reason that shift was made was also because it gave some sort of a mooring to the judges decisions. it was economics, you could have numbers and look at them. if you get into is it big or small, that it is up to the judge. thomas: i do not think the issue of competition is along economic issue. that question of allowing the
walmarts to emerge and amazon to crush the walmarts has had positive effect for the consumer , but has had real economic consideration in terms of consolidation, not just from an individual but a geographic level. you're also seeing bipartisan support for attorney general and others because there's something about the question of people sovereignty to determine their future. david: what is the most effective form of regulation if there is to be regulation. i talked to tom steyer earlier this week, and he thinks there should be regulation, but he thinks breaking up facebook would not work. he said "if you believe breaking them up would result in all the same people going back to the itce where they started, requires government regulation the way a public utility does." does he have a point? chris: i do not think that is true. because i live through the founding of facebook, we saw a robust complication between
facebook and myspace, twitter, tumblr. this is not like the electrical grid or the pipes and there is only so much space and once you invest you have a natural monopoly. this is much more akin to what we have seen across other industries. to the question you are getting it before about the harms, in general antitrust law has been completely narrowed into this view on consumers and prices. that has been a big barrier to talking about facebook or some of these other companies, when the long arc of antitrust law is about all kinds of harms. what are the harms big tech and other big companies and agricultural pharmaceuticals are going to the economy? first there price concerns. secondly, rates of entrepreneurship are near an all-time low. third, productivity rates are much lower than they should be. maybe most importantly, the question of power, and political power. we live in a moment when large
corporations are setting the agenda in washington and completely erasing the voices everyday people. americans are tired of it. alix: have you talked to mark zuckerberg about this? chris: i have not talked to him since the spring. alix: how would your view be different if you still had a seat on facebook and you are running a big company? chris: i think i would be saying many of the same things. after i wrote the piece in the spring that call for breakup, people asked me what you think mark zuckerberg should do? what is the next step? the problem is not what mark zuckerberg should do. we've been so accustomed to thinking about how corporations can solve our problems, the responsibilities with government, the department of justice, and the ftc. since the peace has come out, we have every branch of government stepping up to the plate and a rare bipartisan consensus to
take action and say enough is enough. to what extent does it have to do with structural remedies. we had the head of the antitrust division say that in the microsoft instance, the ultimate result was behavioral and she said that did encourage the growing of new businesses. can behavioral remedies solve this problem? thomas: we can. the antimonopoly fund is looking at that full range of solutions. there are some breakup elements. consumer power. right now you're seeing some of the loudest voices of concern coming from small business owners who are seeing that google and amazon can have an enormous effect on their business and even squash it based on where they appear in algorithm and they do not fear -- they do not feel that is fair. they could have built that business for years and years. those are the kinds of small business owners that pop the representatives and say
something's not right in this marketplace. people want fairness, they want transparency, they want to know what the rules are, and behavior can be part of that. alix: this goes to the broader issue of privacy. mark zuckerberg gave a speech talking about free speech, standing behind that, and why we need to protect it. concernsunderstand the people have about how tech platforms have centralized power. i believe the much bigger story is how much these platforms have decentralized power by putting it directly into people's hands. while i certainly worry about the erosion of truth, i do not think most people want to live in a world where you can only post things tech companies judged to be 100% true. alix: chris, what is your reaction to that? if your bacon have the power and have free speech, it is a huge democratize or. sets: the speech mark dave
up a false dichotomy. it is either facebook's policy today, or china's authoritarian regime. there is a lot in the middle and we can do better. there has been a lot of talk about freedom of speech on facebook and other platforms. no one is saying you should not be able to share your opinion, however off-the-wall it might be yourself. the question is whether or not facebook or any other platform on the internet should amplify that opinion and give you an audience of hundreds, thousands, or in many cases tens of thousands. in my view, when a politician says something that has been fact checked as alive or when folks peddle false information about critical health care things like vaccinations, it is the platform's responsibility not to amplify those messages. we have precedents for other platforms doing a better job. pinterest allows users to express their opinions. it is not the largest platform in the world, but they are pioneering the way.
they do not use their algorithmic tools or display it in search results in order to make sure the false information does not travel across the platform. the idea it has to be one of the other is a false choice. there is a responsibility in these platforms to step up and do a better job. thomas: there was a great orwellian moment from facebook a few months ago where they said we are not a media company and should not be held accountable for that. they want to be a monopoly on all media information in the world while not being held to the standards of a media company that we would hold to this network or any other. the problem when you get that kind of monopoly consolidation, particularly when it is across different sectors of the economy, is what should the rules be, whether it is behavioral or ethical codes or legal codes. this is fairly new territory. again something that in earlier eras we saw and great leaders stepped up and broke up some of those trusts and that helped
produce some of the great economic benefits of the 20th century. alix: great conversation. thank you for joining us. chris use, facebook co-founder, and tom perella. thanks to david westin for joining me for most of the hour. coming up, the rallies. earnings for companies on the s&p are up. we will take a look at some of the movers. this is bloomberg. ♪
alix: time for technically speaking. bill maloney, voice of bloomberg's equity squad joins me now. you can listen to bill on the bloomberg. earnings could be worse. that was my take away. coming in solid. amex is higher. what you see? bill: earnings have been good this morning. american express up 2%. the first resistance you want to
look at is the 100 day moving average, 121.34. second resistance is the retracement of this range, around 122 and that 125. looking back further, long-term uptrend, stop looks good. jonathan: let's go to state street, also delivered on solid earnings. some of the regional banks coming in. are we overextended here? what you see? bill: i do not think so. state street is up 3%. the first resistance level is 62, above that, 64, another retracement level here. key to the stock if we go back to 2016, long-term support 48 to 50. that stock looks pretty good. alix: coca-cola coming up with earnings, saying 2019 revenue will be 5% organic revenue. they have solid growth. what is the chart showing? up.: oklahoma -- coca-cola the first resistance is 55.
the all-time high as 56. alix: in terms of a bottom, where is it at this point? bill: it has been a solid uptrend since march. little resistance. the all-time high of 56. jonathan: bill maloney joining us. he also has updates throughout the day. that does it for us on this program. coming up on "the open" with jonathan ferro, julian emanuel joins us. friday, the major stories are what is happening with the dollar grind lower in what is happening with yields. we are rewriting fyrstenberg curve. what does that mean in terms of asset allocation? this is bloomberg. ♪
jonathan: coming up, unresolved macro issues lingering. the s&p 500 sitting within 1% of record highs. china continues to slow, posting the weakest gdp growth since the early 1990's. boris johnson battling to sell his brexit deal. with 30 minutes until the opening bell, here is your friday morning price action. the s&p 500 going absolutely nowhere. euro-dollar firmer, up to 1.1148. treasuries unchanged at 1.75. that is how we close out the week. let's begin with the big issue. china gdp continuing to slow. >> china is in a difficult economic situation today. q3 may notrowth in continue in q4. >> growth is slowing. >> i think it will go below 6%. >>