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tv   Bloomberg Markets Americas  Bloomberg  December 10, 2019 10:00am-11:00am EST

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down 500 --vonnie: s&p 500 now just 0.1%. many key events coming later this week. we have the 10 year yield at 1.8 percent, backing up a little bit. the dollar index weaker by another 0.1%. too much movement for the dollar or the mexican peso. we have been hearing rumblings that a usmca deal is. very close. . the best performer right now in the s&p 500, autozone, a simple earning story.
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the best performer across europe and in the cac 40's sanofi after it said it would give up on diabetes and some heart research , and would concentrate on cancer research. that has that stock higher. barclays lower 1.7%. that has the european stoxx 600 down about 0.5%. the ftse 100 down 0.5% ahead of the election in a couple days. the british pound up 0.2%. we are joined by christian lawrence, rabobank senior market strategist. it is baked into this market? christian: i think it's fair to say that a conservative majority is pretty much baked in. the real surprise would be if we didn't see that emerge, so if
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the conservatives get a minority or if the opposition were to win, but i think that is very unlikely. for me, the major risk is that we could actually see a correction to the downside if the market is disappointed by that number of seats for the conservatives. alix: is that a gradual --vonnie: is that a gradual move to the downside, or could we see com some kind of got movement? christian: i think that would end up being a gap movement. i base case is that we see a conservative majority, and then the path for sterling will continue to be higher, but obviously anymore some dude fashion -- obviously in a more subdued fashion. it is fascinating that this is just one of the key events this week. i'm curious as to what your morning is going to be concerned
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with. will customers be calling up and talking about impeachment? will they be talking about usmca? will they still be talking about china? christian: it is quite remarkable how low fx volatility is at the moment. other than the chilean peso, volatility has really been grinding lower all year. yesterday, today still very subdued price action as people wait for the fomc tomorrow, the ecb, of course. election. the we've already had the trade headlines. there's a lot going on come about the moment, it is certainly wait and see mode. of those events, i would suggest it is probably the ecb that is going to be the most closely watched purely because this is lagarde's first outing, and it is clear she is going to be leaning very heavily on fiscal policy, urging governments to do something.
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when we look to next year, i actually think we will see further rate cuts from the fed as well, although they are unlikely to signal that tomorrow. vonnie: the fomc meeting has begun in washington, d.c. you mentioned the focus will probably move to the physical in europe. certain countries will probably be on board. what is your base case for what kind of fiscal relief europe might get into 2020? christian: of course, we are talking about fiscal stimulus globally, but in europe, it is harder than most, as you just alluded to. some countries are on board with that, some aren't. it will really be up to christine lagarde to try and provide some sort of consensus. of course, she has a background. she was the french finance minister, and has spent many years at the imf essentially trying to advise countries what to do on the fiscal front. if anyone can do it, it is
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lagarde. what it is a very difficult task at hand, and i don't think the ecb is going to be able to completely sit on the sidelines. vonnie: is the market awaiting christine lagarde with an open mind, or is there something that could disappoint the market this week? think if she didn't maintain the dovish stance we heard under draghi, that would certainly be a huge disappointment for the markets, but i don't really see that happening. i don't think she is going to rock the boat at this stage when it comes to monetary policy, and i think the emphasis is going to be on the need for individual countries to step up and provide some support. of course, she will be aiming that specifically at some of the countries that are perhaps more reluctant to ease on the fiscal side, and germany as a standout there. as we know, germany has not been performing well over the last couple of years, so there is a very strong case to be made for
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boosting fiscal stimulus, particularly when borrowing rates are in negative territory. vonnie: moving to the u.s., this morning we had house democrats basically saying there are now two articles of impeachment against the u.s. president. this will obviously go to the senate. will this have ramifications for the markets? there are plenty of secondary impacts i can see on the horizon. you see any of those impacting your clients iesco -- your clients? christian:christian: when i speak to my colleagues, the consists this seems to be yes -- christian: when i speak to my colleagues, the consensus seems to be when it comes to the senate, it is unlikely to go through. i don't think the markets are really pricing in the possibility of trump not being president before the 2020 election. that is not to dismiss it, of
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course. it is a huge event that we need to follow very closely, but i are onhe markets' minds other things, particularly as trade. vonnie: we are waiting for comment on the impeachment articles, but is also intending to speak on the usmca deal, which is apparently close to getting signed. the mexican president saying this morning that the executives of the three countries will sign today. let's listen into the house speaker. [indiscernible] rep. pelosi: good morning, everyone. this is a day we have all been working to and working for on the path to yes.
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we were in range for a while, but until we could cross a certain threshold of enforcement for our workers' rights, for the environment, and for the prescription drug issue. as you know, those were the three issues we had put out there. i want to thank the eight memos of the committee, the numbers of the task force -- eight members of the committee, the memos of the task force, for negotiating the legislation. i also want to thank richard trumka, the president of the afl-cio. , thes persistent satisfied, knowledgeable. he really got us to a place which is a far distance from where we started with the proposal that was given to us. there is no question, of course, that this trade agreement is much better than nafta.
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but in terms of our work here, it is infinitely better than what was initially a pope -- initially proposed by the administration. i credit our chairman, richie neil, for helping us navigate all of these places. the unity of our caucus on specific priorities in order to get the job done, and again, the brilliance and knowledge of richard trumka as to the ramifications of every provision that was in the legislation. we will be handing out the memo from the ways and means committee, which explains why we are so proud of the distance that we have come from where we started with the administration on this legislation. it is a victory for america's workers. it is one that we take great pride in advancing. force, thethe task
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congress woman who has markup in her committee about workers appropriations, you will be hearing from mike thompson of california, terry bonamici ofabama, oregon, gomez of california. where are my others? connecticut, earl blumenauer of argan. -- of oregon. now it is my honor to yield to richie. he was indeed a maestro to make all of this happen. i have great respect and admiration for his work, and to thede that i yield chairman of the ways and means committee. rep. neal: thank you. [applause] rep. neal: everyone sitting
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great while, you get to participate in a "it will never happen" moment. [laughter] rep. neal: we are witnessing that today. the other thing i would point out is after an intense round of conversations over the weekend that started with the speaker and myself and robert lighthizer , and mr. trumka was on a hunting expedition. we spoke very quickly. but the speaker talked to me earnestly about we are near, we sunday, all ofn a sudden i looked at my phone and said pelosi for caller id. withsdom tells me, to hell brady, take the call. [laughter] rep. pelosi: and i was watching baltimore. rep. neal: this is a transfer med of agreement, -- a
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transformative agreement, a template for future agreements, i think. enforceabilityas . richard trumka would be supportive of this i tells all. theing members strengthened labor standards, strengthened the environmental chapters, enhanced the verification mechanisms for environmental trade with the unleased -- environment will trade. abilityrved congress' tochange law with respect prescription drug prices. usmca will deserve a vote because it is in agreement that democrats shaped. i don't think anybody on this status would have said two months ago we would have been able to get as far as we did in
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this negotiation. it was based upon goodwill, but also a determination that we acknowledge the problems that existed in the past with enforceability. break iny of the august with the working group, i nothingthe trade rep, has flustered more does agreement about trade and a lack of enforceability. the trade rep said to me, you're absolutely right. andaid, i want to tell you, i think i am not speaking out of school, there have been people in the state department, the defense department, and the oval office over the years who said don't get this one upset and don't get that one upset because we might need them on future geographic issues. our position has been that we are supportive of the thrust of what you want to do here. i think that the initiative that we offered, the offering that we
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have in front of us today is indicative of the goodwill, and some of the numbers on this task force and nubbers of the subcommittee, what a job they did. these were intense, argumentative, angry negotiations. this got really hot on a number of occasions. i think we set a world record for hanging up on each other, myself and the trade rep. but at the same time, we also knew this was an opportunity that we couldn't let get away from us, and we did that. we will continue to share more details in text. i traveled with the delegation to mexico to meet the president of mexico, and right after that, i traveled to canada to meet with the prime minister of canada and the minister for trade. i believe they were good partners in this. they conceded to just about every point that we asked for because of the following, enforceability, enforceability, force ability. so with that, madame speaker, i
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will turn it to you. rep. pelosi: i will turn it over on the matter of pharmaceuticals. >> it has been an honor to serve on the working group. the trump administration sent us a deeply flawed trade deal that, among other things, would have raised the price of pharmaceuticals across north america by locking in high drug prices and expanding big pharmas monopoly. over the past six months, my democratic colleagues and i on the working group worked for a deal that helps america's patients, workers, and all consumers. ,e now have a new and improved renegotiated nafta that prevents big pharma from raising the price of prescription drugs across the united states, mexico, and canada. provisions limited
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that underline congress's ability to change domestic policy that lead to high drug prices. the trump administration tried -- to tuck in big corporate gifts to pharma in usmca. .0 years of market exclusively we currently have 12 years in the united states. this trade bill would have tied congress's hands and prevented us from enacting legislation. i have a bill that would actually lower the exclusivity. but that provision is now out of the trade deal. it is gone. [applause]
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>> because of our current prescription drug pricing crisis , many americans would actually go to canada and to mexico to get lower-cost drugs. this would have raised the cost across the hemisphere. this deal would have caused prices of prescription drugs in those countries to skyrocket. on the first day of our negotiation, i told the u.s. trade representative lighthizer that the biologic exclusivity provisions needed to be removed, and now they are gone. the trump administration also pharma witht big increased protections for secondary patents and ever greening changing a little bit of a drug to get a new and extended patent, and those provisions are gone. finally, the trump administration also tried to prioritize brand-name drugs and include barriers to market entry
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of generic drugs, and we have now revised those provisions to , tore generic competition improve access and affordability to medicines for people across north america. lots of people to thank. we had an amazing staff on the committee and in our offices. i want to thank congressman blumenauer. he and i were working on the pharmaceutical piece. i also want to thank organized labor, richard trumka. they made the drug provisions an important part of this legislation. usmca for fixed the america's patients, consumers throughout the hemisphere. thank you. rep. neal: jim goldman has done a remarkable job. jim? rep. golden: let me thank you
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for trusting a redshirt freshman to be on this group. i always looked at this issue as important because i come from labor. -- i worked for the nurses union in california, so i understood the seriousness of any trade agreements. when it comes to this one, we were asked to really work on the labor and enforcement parts of the agreement. we look at it as a three legged stool. one, the labor rules would end the agreement. two, monitoring. three is enforcement. if you have squishy language, it is hard to understand if there is any of that agreement, so we tie up the language to make it stronger and more enforceable. you have to have monitoring of any on the ground, so we created mechanisms to assess mexico's progress in and permitting labor reforms and complying with the rules that we laid out in writing.
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if there's no consequent is -- vonnie: it's been quite a day for house democrats. you've been listening to some of them on the ways in mitty's -- on the ways and means committee on usmca, lauding themselves and having an active role, and called it a template for future agreements, saying it is in agreement that democrats helped shape. we are not seeing a huge amount of market reaction. currency reaction is minimal. the vote is planned for next week, according to the house speaker, but we know from the mexican president that the three executives are due to signed today later in mexico. let's get briefly to the white house and josh wingrove. democrats seem to be taking a lot of credit for this deal. what exactly did democrats do to shape it? josh: the big thing they confirmed there was the removal of the biologic pharmaceutical drug provision that would have forced canada and mexico to extend the protection of those drugs. that is gone. that was a straight give to
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pelosi to get her on board. that was one of the key differences from nafta, and that is not a long list to begin with. a lot of this has been baked in. the gdp impact is not that big to begin with, and it is looking more and more like nafta with every change. these are the final dominoes falling today. the afl-cio is supporting this, pelosi says it is coming for a vote. that pretty much means it is a slamdunk. things can change. canada still has to ratify. that probably won't be a problem, even though trudeau lost his majority. so things are finally moving after two years of ripping our hair out on whatever this thing -- on whether the thing was going to land or not. vonnie: we leave it there for the moment. a very busy moment for nancy pelosi, what with those articles of impeachment as well. josh wingrove, thank you. , and $19ean union
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trillion economy, is announcing plans to zero out greenhouse gas emissions but when he 50 in order to turn europe into the world's first -- by 2050 in order to turn europe into the world's first climate neutral continent. ceo michael o'leary joins us from brussels. one of the proposals is higher taxes on airlines to reduce the impact of co2 emissions. what is your response as chair of a4e? michael: good morning. we are opposed to taxation. taxation does nothing to the end -- does nothing for the environment. we explained this morning that airlines like ryanair and other european airlines are investing $170 billion over the next decade, re-fleeting, buying new
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aircraft which will carry more passengers, but burn 20% less fuel. we are already investing very heavily in the industry. to deliver growth in a much more sustainable way and a much more environmentally sensitive way. taxation will set back that investment agenda, where already we are delivering. vonnie: i imagine the eu response would be that that is not enough, that the airline industry is threatening to overtake even power and utilities as the biggest emitter. unfortunately, ryanair is one of the biggest emitters among the airlines itself. what do using the airline industry can do in order to absorb higher taxes, as well as research? michael: i think there's an awful lot of misinformation. the air industry is not one of the big polluters. we are one of the most efficient industries. we account globally for less than 2% of co2 emissions. shipping accounts for 5%, and yet somebody never says to tax
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freight. even though we are only 2%, we are investing heavily to reduce those emissions by investing in new aircraft and new technologies. we are one of the leaders as an industry in europe. despite our excellent record, we are investing heavily to further reduce our environmental footprint down to infant intesa millie -- down to infinitesimally small levels. we operate a fleet of small boeing aircraft. we are the greenest, cleanest airline in europe. passengers switching to flying ryanair in europe are already reducing their emissions by 50% compared to playing with some of the naughtier competitors we have with respect to climate here in europe. continues at this
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growth rate, it will have overtaken, in terms of pollution, his some of the more traditional industries. what will you do to offset another ways? things like tree planting and so on have been put out there, or blended kerosene. no need to use 100% kerosene. michael: sure. first, you've got to go back and get the facts right. it is 2% at the moment. we might grow by about 40%. that would take us to 2.4%. we are not going to overtake road transport. we are not going to overtake shipping or any other industry. we are going to run significantly behind them. but you're right, we can do more. we can invest in new technology. the new engine technology burns significantly less fuel. we are looking at sustainable aviation fuels, bio generated fuels, new battery technology that would harness the power of wind and solar. these technologies are very much at the formative stage at the
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moment. it was one of the issues we discussed this morning. the commission needs to step up to do more. we as an airline at ryanair pay $630 million a year in aviation taxes. what's that tax money being spent on? it's just being trousers by european government. we want it spent to bring -- the the develop at develop and supply of sustainable emission fuels and to increase or improve the battery technology that will help us continue to lower the carbon footprint of air travel in europe from the already very low figure of 2%. vonnie: let's talk about ryanair itself and the boeing max for a moment. originally, you ordered 105, with an option for 75 more. then you were anticipating deliveries -- michael: that's right, 210 in total. vonnie: exactly, and you have been slowly ratcheting down your expectations. 10 was the last official figure we heard. what are you anticipating now?
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when will we see the first boeing max 8 ryanair in the air? michael: i very much hope before the summer of 2020. we were supposed to take 50 of those before 2020. gradually, as the boeing groundings have been prolonged, we have had to roll that back. at the moment, we are hoping to get between 10 and 15 aircraft delivered in may and june of 2020. we won't take any in july and august because we are busy carrying people all over europe. hopefully we will get those 10 or 15 aircraft before, in may or june of next year. . there's a possibility we may get none, in which case we will some plea take those aircraft deliveries in the autumn of 2020, and time for the summer of 22 anyone. one-way art -- summer of 2021. one way or another, we are committed to taking these aircraft. it is a brilliant aircraft. customers are going to love the aircraft, but we've got to get
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them back flying. here in europe, they are working intensely to get the grounded aircraft back in the air around february or march, which should cs hopefully take deliveries of the new max 200 by about may or june. vonnie: there still has to be a may orcation flight, so june, windows that certification flight happen? -- when does that certification fight happen? michael: that would be towards the back end of march, early april. we are taking the next 200, a slightly new variant aircraft, so we expect to see the existing flyingd max aircraft january, february in america, february, march in europe. aresafety authorities .unning a very vigorous process
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ryanair, our customers, we can't wait to take this aircraft. our customers are going to love them, and it is good for the environment. vonnie: michael, one more on the british election thursday. you have set a hung parliament would be the worst case scenario. what you see today about it? michael: it's impossible to tell. i'm sure you are a better expert than me on it. we hope, like everybody else in the u.k. in europe, that at least there won't be a hung parliament. that there will be some majority in favor of some decision-making process. i'm irish, so frankly, we generally try to stay out of endless politics -- of english politics. i would get into trouble if i go back into the history we just want majority for somebody so that some but he would get on and actually tell us where the u.k. is going.
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brexit is not going to be delivered in the next three or six months. there's going to be a very long perod of difficult trade talks between u.k. and europe. i still think it is a stupid decision, the u.k. leaving the biggest trading partner block it has come about that is what they voted for. we just want to get on with it, give some government in the u.k. a majority so at least we get some action. we had three years of indecision and delay and crisis on top of crisis. get on with it, and let's have a government in the u.k. vonnie: thank you for joining us today, ryanair ceo michael o'leary. michael: good to talk to you. vonnie: let's check in now on the bloomberg first word news. here's ritika gupta. ritika: house democrats have introduced two articles of impeachment against president trump. he's accused of abuse of power and obstruction of congress. >> the argument why don't you just wait amounts to this. why don't you just let him cheat
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in one more election? why not let him cheat just one more time? foreignlet him have help just one more time? judiciary committee will vote on articles of impeachment thursday. at sets the stage for a vote by the full house next week. house speaker nancy pelosi also gave president trump a major win on capitol hill. policy announced a there is an agreement on a modified trade deal between the u.s., mexico, and canada. she called it a victory for american workers. president trump tweeted that the agreement will get rid of what he calls the country's "worst trade deal" nafta. bloomberg has learned the u.s. and china will focus on cutting import taxes currently in place to enable negotiators to avoid having to choose which among thousands of products can be exempted from tariffs. since last year, the u.s. has
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added 25% on $250 billion of chinese goods and a 15% levy on a number of additional imports. in australia, air pollution from bushfires is so bad it is setting off fire alarms. flights were delayed, and the number of people seeking treatment at sydni hospitals rose 25%. warned people with respiratory conditions to stay indoors. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. vonnie: thank you. was just saying, house democrats have outlined their case against donald trump. rep. nadler: when the house investigated and opened an impeachment inquiry, president trump engaged in unprecedented, categorical, and indiscriminate
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defiance of the impeachment inquiry. vonnie: the impeachment articles announced today move house democrats one step closer to an historic vote by the full house next week. for more, let's welcome bloomberg's emily wilkins from capitol hill. windows this next boat take place? do we wait through the holidays before the senate has a chance to hear argument? emily: we are going to see the judiciary committee take a vote on it this week, as you mentioned. at this point, there has not been an official announcement that they will be voting on the full house float, but that seems pretty likely. member, the last time the house took a floor vote on impeachment process, not the articles, it was almost a complete partyline vote. republicans voting no, democrats voting yes, save for two democrats who broke from the party to oppose the process. we know one of those will again be voting against the process of impeachment.
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-- against the articles of impeachment. twoie: they decided on articles of impeachment. we know they were considering three. do we know why? emily: they wanted to focus more directly on the actions around ukraine and the president seemingly putting a white house visit and potentially aid based on the ukrainian president announcing an investigation against one of trump's political rivals, joe biden. i think that is what the house felt they had the strongest evidence on. the obstruction of justice was considered more in line with the mueller report, but they wanted to narrow down the articles of impeachment. vonnie: emily, thank you. a press conference on the u.s.-mexico-canada free trade agreement wrapped up a little
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while ago, with house democrats planning a vote next week. one trade deal looking positive, at the very least. all eyes continue to be on the u.s. and china, though. cracks are widening in the longest expansion in modern times. in his latest bloomberg opinion column, met winter -- matt winkler writes this. new americanchew planes and equip." matt winkler joins us now. explain why we are already seeing very obvious crocs. cracks.obvious matthew: the first is a very obvious declining business sentiment. we are in the longest expansion. we have very low interest rates, so the cost of money is very low. the cost of capital is very low. american business is essentially paralyzed.
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that is after a massive tax cut. you would have thought at this anything,, if americans would have great incentive to be doing everything we can to grow. the reason why they are parking their money is because the tariffs have so confused the market, so confused their supply lines, that they just don't know what to do. vonnie: is there an argument to be made that this is just a delay? that we are pressing pause on the investment button right now? as soon as we get some kind of trade deal, and we could get usmca as early as next week, that it will be all guns blazing after that? matthew: and the dish ran after the spoon. [laughter] matthew: it is very hard once you start down this road of creating all kinds of chaos, which is what the trump tariffs have done, that it can all be neatly folded back together and you can say, never mind, and we go back to where we were.
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all of thisistic in is that global trade on a five-year rolling basis has declined for the first time since 1969. on top of that, you are seeing, of all things, the historically robust surplus and services, where the united states has done really well over the past 75 years. this is medical equipment, computers, transport, insurance, finance, the things that we export all over the world. high-paying jobs, great wages, etc. that is also in decline. that shouldn't be happening right now. vonnie: not 10 minutes ago, democrats were being very pleased with themselves, and i am quoting here, "it is in a remit that democrats help shape. future template for agreements." nafta they be so happy if is what did this to the u.s.
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economy? matthew: it is a diversion of the north american free trade agreement, which you have to say was benign. do was make the territory a free-trade zone, and that made it a lot easier for companies in all three countries to do business with each other, and that created greater prosperity. we haven't changed that, by the way. it is the same agreement between these three countries. latest on the china d.l. is that we are -- the china deal is that we at least won't add tariffs on sunday. is there any good outcome here? what would be the best outcome from our vantage point right now? matthew: the best outcome would be no tariffs at all, and start
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negotiating in a way that is not punitive to farmers, not punitive to american consumers, and of course businesses. essentially, what tariffs are is here in whatever we buy the united states. tax, theyou have that more disruptive it is, and the more destabilizing it is. and you know what that does? it puts the brakes on american business. vonnie: what about u.s. services? can we accommodate even bigger of a services economy? perhaps one or two more percentage points added onto the economy and taken away from the industrial economy isn't the worst outcome. matthew: actually, it is probably not a good thing. one of the strengths of the american economy is logistics. this is where we are managing
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exports, imports, all of the details. if you look closely at what has happened to logistics, first of all, everything we are sending overseas to china, for example, which could be scrap metal, could be all kinds of things, that is way down and most of the quarters of the past two years. china keeps sending stuff to us, so that is actually hurting american companies. the second thing is that if you look at the logistics of companies themselves, they are now underperforming the global peers. look all over the world. this is a very important industry, and american companies are right now third worst from the bottom. vonnie: we will talk more about this, but i do want to come on such an auspicious day, ask you about the fact that we now have a fourth president impeached, and there will be an investigation in the senate. does this mean for markets given that we have seen it three times
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before and had various reactions , sometimes no reaction at all? matthew: so far, it doesn't mean much to markets at all. we'll have to wait and see what happens in the senate. this is a foregone conclusion, essentially. we knew congress was going to go in this direction, so this is not a surprise. it is a historic occasion, but not in anyway newsworthy in the sense that people are learning something today that they didn't know yesterday or the day before. vonnie: but if you game theory at out, doesn't it have a secondary effect even on the china talks? is there more incentive for the president to either stall or get something done? is there less of a chance of legislation getting passed through congress? matthew: i think it is tricky to try to use history as a guide to what is going to unfold next. the reason i say that is because clinton was impeached in arguably may be the greatest economy of the 20th century. the clinton economy was so robust, and the impeachment had
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no effect on markets or the economy when it arrived. eventhard to see how this is going to be dissimilar from that, unless the senate does something surprising and really take seriously the mandate that congress has given it and decides maybe it should remove him from office. we are a long way from there. vonnie: matt winkler is cofounder of bloomberg news, editor in chief emeritus, and i want to direct you to that piece. thank you to matt winkler. let's get a quick check on markets now. not a huge impact on markets so far, at the very least. we have the s&p up just three points, the 10 year yield down a basis point to 1.83%. currencies unchanged. the canadian dollar and the mexican peso unchanged versus the u.s. dollar. this is bloomberg. ♪
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♪ live from new york, i'm vonnie quinn. this is "bloomberg markets." time for an exclusive now. ares capitalf spoke earlier with bloomberg's jason kelly. >> the markets have obviously all rally now for a handful of years, so i think there is a wealth affect billing over to the consumer where they feel comfortable spending. i think when you flip that over to corporates and talk to ceos in our portfolio and perspective portfolio companies, it is this nervousness. there's not a lot of policy certainty, whether it is the
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trade situation, the upcoming election. i don't think there's pessimist him. i think there's -- there's pessimism. i think there's just nervousness, and kind of a wait and see approach. jason: there's been some waiting and seeing when it comes to going public. publicly traded companies especially have been some interesting headlines. it feels like in 2019, we did see this disconnect of a sort between the private markets and the public markets. you play in both in a lot of ways. what accounts for that, and where does it go from here? kipp: more than anything else, it's become more complicated and more expensive to be a public -2009,y, particularly post 2010, and some of the performs. there has been acceptance generally for being a private company longer. you had significant growth in private equity over the past 10 years. it's enabled companies, whether
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they are venture businesses stay in private longer, or whether they are more in the world where we live, which is private equity, -- private equity backed lbo's and that sort of thing. in the past, these companies had no other option but to get public and take advantage of a capital markets type of execution to raise debt capital. that has all changed a lot in the last 10 years as we've brought more capital into the .pace jason: this is a yield hunt in many ways. how has that gone? has it gone smoothly, or have hase been bumps as this grown as dramatic as it has? kipp: so far it has been pretty smooth. if we see a dramatic correction, we will see how different
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managers do with a much more significant supply of private credit. but i think what is overarching for now is that all of the investors that support our funds and our initiatives, along with our competitors, have just done a term it is a metalwork scoping these markets, and they juststand them and feel -- done a tremendous amount of work scoping these markets, and they understand them and feel good about them. i think what they've done is traded some liquidity in exchange for what they feel are pretty compelling risk-reward situations in the private markets. jason: you mentioned negative yields all over the world at this point, not something maybe we enter debated happening, certainly for this long. does that continue onto 2020? kipp: i am far from an economist. i have concerns about starving people for yield forever.
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i feel like the u.s. is more or less compelled to keeping a low rate environment in response to where we are the rest of the world. i don't know if confused was the right world, but surprised to see fate cut -- does he rate cuts. that is usually not when you see rate decreases. it seems like we are done for the time being. some folks were forecasting may be another cut. but to me, it does seem like it is lower for longer. vonnie: kepp deveer there of ares capital speaking with jason kelly. bloomberg first special election coverage after the polls close, starting at 5:00 p.m. eastern time, 10 p.m. london time, thursday on bloomberg. this is bloomberg. ♪
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♪ vonnie: live from new york, i'm vonnie quinn. this is "bloomberg markets." are stuck of the hour is french drugmaker sanofi. analysts are hailing the decision to shift to treatments in oncology and rare diseases and away from things like heart disease and diabetes. doolittle is looking at the impact. abigail: they have a relatively new ceo that took over about three months ago, but from a broader perspective, they are seen as a bit of an r&d slug. their pipeline is not that impressive. so they are moving away from treatments that are considered less rewarding from both a financial and health care standpoint like diabetes and cardio, and into new areas like cancer, rare diseases, and ms. they are already there, but it is a smaller portion of their pie.
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diabetes is about 15%, red diseases, that's rare diseases, 8%, 6%, and 4%. another big piece here is margins. right now, their margin is around 20%. by 2025, they could get it up to 30%, which seems like a bit of a challenge, but analysts say this is a good move in the right direction, so it is going to be interesting to see how that does play out. vonnie: so margins are better in certain categories than others. abigail: that is exactly right. for these therapies, they are making the point it is not just financial, but also from the standpoint of health care. so for cancer, for rare blood diseases, a breast cancer treatment they are moving towards, the margins are much stronger. it is a pretty aggressive target , about 1000 basis points in five years, but analysts seem to henk they can do it, and
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said something to the interesting, that these changes are not interesting for a company with an incredibly proud history, but they are really looking to shape up the r&d pipeline and get things going with more growth. vonnie: investors rewarding the shares today, up to the highest performers in the cac. thanks to abigail doolittle with our stock of the hour. armstrong,patrick paris be wealth cio -- ciotrong, plurimi wealth joins us. in europe, just a little movement. the cac 40 is higher. the rest of the indices lower. ♪
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vonnie: there are 30 minutes left in the trading day in europe. from new york, i'm vonnie quinn. this is the european close on "bloomberg markets."
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♪ vonnie: checking markets now in europe, the euro stoxx 50 is unchanged. just about is up four points. several movers within the s&p that are moving quite briskly, let's say. autozone the best performer, up 7.7% after a blow away earnings quarter. that is a 52-week high. it already had a 52-week high yesterday. the dollar index weaker, but not seeing much movement in currencies. volatility is pretty low considering the a lot of news that is currency related. similarly, the 10 year yield at 1.83%. not much movement there. the stoxx 50 is unchanged. the euro stoxx 600 is down about , off as is the ftse 100 its lows. a couple of the movers today is

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