, the bank must regain its hunger for the business. president trump the only thing between u.s. and china is stupid trade. by the depth or earnings season is on deck. "bloombergome to daybreak" today. we are in the heart of atlanta, the square on fifth tower. david: welcome back to bloomberg technologyub of daybreak: america's atlanta. innovation for atlanta. we will be here all day long. americas atlanta. we are in tech square in this is headquarters for some atlanta. big companies. home depot, the ceo will be there are so many headquarters of big companies. coca-cola, home depot, ups. here. david: isn't there a golf game we are going to go back in here. in georgia? alix: it is a touching thing. we are going to speak to

david: patrick reed, not others as well like jeff arnold, the sharecare chairman and ceo, well-known. he led from friday straight through. also talking about golfers.ly big cybersecurity. let's get a check in on the 15 under par. alix: did tiger woods get a hole markets. it feels like we are in a slight in one? david: almost. risk on field. the s&p is higher. we will talk to the head of in terms of the currency market, it is a mixed dollar story. intercontinentalexchange. the chicagought the dollar-yen is the only one that is moving on the upside. the bond market ends of having stock exchange. the 10 year yield. mogulpatterson is a movie selling on the margin, but not , the head of pinewood atlanta what you would necessarily studios. alix: in the markets, it feels think. oil contributing to all of that. david: let's check in on what is like risk on. you don't want to buy going on outside the business world. we turn to kailey leinz with anything into the weekend. "first word news." air base hasian today, a little bit of a rally. s&p up 13. euro-dollar weaker, although a been hit by missiles a day after president trump warned they

.roader mixed story parad would be a big price to pay for a chemical weapons attack. israeli warplanes carried out the attack. lot about says a israel has not said anything. traders. take,w bloomberg first and the weekend, activists rescue workers say at least 40 people were killed in a now joined by our atlanta bureau suspected poison gas attack on a chief and our bloomberg economy rebel stronghold near damascus. reporter. welcome. the u.s. confirmed kim jong-un is willing to talk to president we want to talk with deutsche bank. trump about getting rid of nuclear weapons. the president accepted his offer we have the new ceo. for a summit before the u.s. many jobs will he have to confirmed it was genuine. wind up cutting for deutsche bank? >> that is a great question. the time and place of the meeting have not been set. the majority of britain says the public should have the final say it looks like they are focusing on whether to accept a brexit on germany. deal or stay in the european they will be pulling back from union. investment banking. if you're in the investment banking unit, that is one place finalizeay hopes to the company is trading the divorce deal with the eu in the fall. global news, 24 hours a day, powered by over 2700 journalists and analysts in more than 120 countries. at a third of its assets.

jobs will be cut definitely. alix: the underperformance of i'm kailey leinz. this is bloomberg. european banks in particular alix: thank you so much. when it comes to deutsche bank, and the theory is how much more room to they have. >> if you talk to u.s. rocha bankshares are having the best day in almost a year after the bank officially tapped christian sewing to replace john cryan as the ceo. policymakers, they will tell you after the financial crisis that policymakers acted tough sewing will take over the investment bank immediately ensuring up liquidity did you after cryan struggled to improve had tarp and other things. profitability and reverse a slump in shares. asope did not act regli, us now is daniel aggressively and you have continued struggles for european banks. david: is there a real mainfirst schweiz equity research analyst. diversions between u.s. and european banks? thank you for joining us. your take on the new ceo? you heard jamie dimon saying we will get bigger and not cut ceo is a think the new back. sign of a change of mind at the deutsche bank, we don't know top level of deutsche bank, away what they will do with investment banking. >> that is the big question. from the current investment banking focused business model. is in a different

is that going to be a situation since the recession. u.s. banks are gaining positive if they go for more because we are at the point private and commercial deregulating. investment banking? daniel: i think you made the long term, it is going to be a now the fed is putting in , given investment deregulation, so they can do more and have less capital. banking is a pretty uncertain alix: j.p. morgan had that note business, as well as european saying it should be removed from issues in more the business. david: there are reports that german doesn't want to operating because of capital, regulatory capital consumption and so on. pull back on investment banking. >> then there is the question of nonetheless, i think the way to greener pastures will eventually whether the chairman will last. alix: also true. lead through a valley. david: our second story is whilegoing to take it trade. until a large bank like deutsche bank turns around. it appeared president tried to lm thehe waters -- cam -- take a while until a large bank like deutsche bank turns

around. david: do we know whether in waters. he tweeted the following. fact deutsche bank knows where it wants to go? there has been reports of a potential disagreement within steve, this sounds pretty good. the board between the chair and some board members. was this a compromise candidate things are going well. >> this is very reassuring. or have they set out a new course for themselves? to tellit is difficult maybe we won't have because i was not part of the discussions. a trade war after all. parity with the nonetheless, i think there would have been another internal who in the past has united states. it once to be looked at as a world power. that leadstatements i don't see the xi jinping bowing to pressure from trump or me to assume he would like to be washington. david: i wonder if there is ceo, himself. asymmetry here. selective in what been ang him, this has it win after, soybeans in iowa. trump just tweeted about card tariffs. statement for the investment banks.

2.5% here, 25% there. by designing for saving, this ,as -- by deciding on sewing they are actually making them in china. do we know what we are doing? >> well, no. this was more a statement in the alix: that is the million-dollar opposite direction. think deutsche bank question. >> there are a lot of cars being getting out of the u.s. is more likely? daniel: can you repeat the manufactured in the southeast question? alix: does this make it more or not being kept in the united states. some are being exported. less likely that deutsche bank it will hurt bmw, which will get out of its business in the u.s.? become i think it has is made in south carolina. agriculture,fter slightly more likely. i would not bet too much that it is essentially going after trump's base, because trump's they will definitely do this or rural areas. this is a complete 180 turnaround. move mores a slight toward the retail banking side. that will cause a negative bank is int deutsche reaction some of those farm states. interesting an the u.s. is largely an session last week. investment bank.

youquestion becomes how do cutting down on investment banking what affect the u.s. price in this kind of risk? >> it is like there is an almost business. -- would affect the u.s. every other day reaction where business. david: daniel regli of mainfirst it looks like we will have a trade war, markets go down quite in zurich, thank you. a bit. today, we spoke with the when it looks like there is not that much of a problem, like home depot chairman and ceo. today, markets are going up in a relief rally. alix: it comes at the worst time he shared his views on the benefits of tax reform. because we are in the midst of there are some highlights. standpoint, icut global synchronized growth and the question is are we continuing to see that. think we are just beginning to feel the benefit of that. i don't think that has started yet. jp morgan and citibank on friday, we are looking for nice profit growth, but if they don't i think overall, you are seeing wage growth around the country. deliver, we could be in a tough spot. it varies by market. >> that's true. i think tax cuts is a good thing inseems like we are for the u.s. consumer. the consumer has more money in their pocket. volatility and there is no we believe that translates to longer the easy course we have positive for our business. they were talking about been used to the sheer. david: steve, you cover economics. does the u.s. economy and growth that for the last 10 minutes. look different in atlanta than

new york? areawould say the atlanta congratulations for not mentioning that. and the southeast is booming. something about a circus that you have a tight labor market. happened. you go to shops around the city and you will see wanted signs. you have the trump you may find that in new york as administration wants 3% to 4% well, but it is definitely growth with these tax cuts. common around here. what kind of growth do you see david: you have so many going forward? >> we use gdp as the foundation base for our growth. that is projected to be 2.7% and headquarters for so many huge then we look at the housing. companies here and atlantic. do you have a read on ceo that has been worth a couple confidence. >> ceos are quite confident. points of growth for us. about trade,rry we see that continuing, going forward. formation, household but the tax bill was very appreciation, those are real positively received. you will see some good profit positive aspects that are numbers when they start coming drivers for our business. out this week. we feel good about the environment overall. alix: at least when it comes to macroeconomics. if nothing else, profits will be what we are worried about is trade. boosted by lower corporate taxes. we will be speaking to i know you don't have a real international business, but what is your sense of these headwinds many of those ceos today.

thank you. good to see you. from d.c.? homeg up, the ceo of about theu think depot, the largest georgia-based trade situation, we obviously, company by sales. about 20% of our goods come from we are live in atlanta all day. offshore. this is bloomberg. ♪ most of our trade is local in terms of, think live goods, mulch, lumber. a lot of that is domestic u.s. product. continue to rise, which they will, we will have to find offsets for that. we will continue to drive value for our customers. always worried about a cost environment that could be increasing because that can affect consumer spending confidence. david: part of home depot's recent success has been cost control. tell us about the things that were you the most on cost? is it wages? is it input?

from a wage standpoint, we manage that on a case-by-case basis. you always worry about the first cost of goods, going up does that can slow down unit productivity and that is that a good thing for manufacturers or the retailer. alix: what about wages? are you going to be raising wages this year? >> we have been raising wages for the past several years. alix: is that across the board? >> it is. we do it by market. we look at every market as an individual component to make sure we are paying a competitive wage in the market, in conjunction with our strategy. alix: the benefit you are going to get from tax reform, how much of that is going to be reinvested in the business? >> all of it will be reinvested into the business. prior to the tax reform going in place, we committed to basically

double the investment in our business. we will put $11.1 billion into the home depot business over the next three years. that's an effort to continue to keep pace with the changing retail environment. david: where is that money going to go? >> into our stores. about half of it will go into stores for the physical experience. it needs to be great when a customer comes to the store. also for an interconnected experience. it will also go into our associates in forms of wage and benefits and technology to help them do their job. david: another hallmark of your regime is carefully managing return on invested capital. does that keep you away from investing too much because part of that equation is how much you are putting in to investment. does that restrain you to some ♪ extent? focused.es us

we told our investors we will >> this is "bloomberg daybreak" 40duce an ric north of and your bloomberg is this flash. avartis is expanding, buying percent. -- 40%. how much of it is company for $8.7 billion, an 88% deflationary? >> we will invest through the premium to the closing price on friday. customer and price and integration -- and innovation. if your facebook data was shared that goes against multiple competitors that we face. by cambridge analytica, you part of a we have been able to might find out soon. accomplish over the past two years is market share gains. will be a new message on ceot was home depot's speaking with us earlier here in how to protect privacy on the social network. atlanta. the aluminum producer coming up, we talk about health care. companyl health care in moscow plunged today. and the ways amazon may be changing the entire health care sanctions make it almost

impossible for the in part do industry. business in u.s. dollars. that's with jeffrey arnold, chairman and ceo of sharecare. that is your bloomberg business flash. david: thank you so much. we returned to the largest home bloomberg surveillance can be improvement store in the world. heard in new york, boston, the bay area and all across the home depot was started in 1979 united states on sirius xm and is a huge enterprise. satellite radar -- satellite depot chairmanme radio. ♪ and ceo, good to have you here. >> good to be here. david: you reach into every aspect of the u.s. economy, so give us your sense about where we are, where is the household and homeowner in terms of disposable income and income. >> we are fortunate the customer is willing to spend in the home improvement space. 2.7, 2.8,ted to be which is great, and housing has been the tailwind for home depot for the past several years.

you think about new household million, which is positive for the business inpared to where it was 2007-2008. we are seeing millennials represent a third of household formations, which is good. david: if we are growing, how much his tax cuts and how much is because of increased wages and employment situation? tax cut standpoint, we are just beginning to feel the benefit of that. i don't think that has started yet, if you will. overall, you are seeing wage growth around the country. that is a good thing. i think tax cuts is a good thing for the u.s. consumer. the consumer has more money in their pocket. we believe that translate to a positive for our business. alix: i am impressed.

they are both from flint, michigan, and they were talking about that for the last 10 minutes. congratulations for not mentioning that. rare and theres was something about a circus that happened. broaden it out for me. the trump administration wants 3% to 4% growth with these tax cuts. what growth do you see going forward? >> we use gdp as a foundation base for our growth, 2.7% give or take. then we look at housing and add that on. that is worth a couple of points of growth for us over the past few years. we see that going forward. household formation drives kaliey: this is bloomberg daybreak. projects for us. hour, up in the next those are positive aspects driving our business. we feel good about the environment. alix: when it comes to macro republicans in her from mississippi -- republican economics and markets what we senator from mississippi. are worried about his trade.

i don't know you have a real international business, but what is your sense of these headwinds from d.c. and what could stop that growth as you see it? thehen you think about trade situation, 20% of our goods come from offshore. most of our trade is local. .hink dry goods, mulch, lumber david: technology has become a driving force that is changing the health care area. sharecare was designed to be a a lot of that is domestic u.s.. secure place for patients to feel in control of their health. whichts continue to rise, they will, we will have to find since its founding, sharecare offsets for that. we continue to drive value for has raised a total of $300 million in three rounds of our customer. financing, partnering with costlways worry about a investors including media companies like discovery communications and hearst. environment that could be increasing because that could affect consumer spending. we welcome now the chairman and ceo of sharecare, jeff arnold. david: careful cost control. you know this area so well because you were a cofounder of tell us about the things that worry the most on cost, wages, web m.d. as well.

the trade dispute. what is going on as tech meets where are you most challenged? health care -- explain what is >> from a wage standpoint, we going on as tech meets health care. felt were needed to be manage that market by market on an ongoing basis. you always worry about the first a destination where doctors and patients could go that was not so fragmented. cost of goods going up, because back then, getting help information was a big deal, but that can slow down unit productivity, and that is not a with all these other industries being disrupted, smartphones good thing for manufactures or retailers. alix: what about wages? being so pervasive now, why can't health care be next? and bonuse tax cut so this idea of all of your health in one place where all the various stakeholders are for employees. will you be raising wages? , health plans, >> we have been raising wages. alix: is it across the board? providers, empowering consumers >> we look at every market as an to take control of their health to reduce health care costs and i think the timing is now. individual component and making david: we have been talking sure we are paying a competitive about this for some time and yet wage in that market. tax: the benefit from we don't seem to be getting their. what is the resistance between us and having electronic way to reform, how much will be reinvested in the business and where does it go? access our health care data? jeff: i think it is the consumer >> almost all of it will be

reinvested into the business. taking control. prior to the tax reform we now we have a common platform we committed to double the can develop to consider the soestment in our business, hospital saying you come to my portal, it is now about we will put a $11.1 billion into the home depot business over the next three years. continuing to create a health profile on behalf of the person and using technology to bring to keep pacenever stakeholders -- with the changing retail environment. david: where will that go? half,o our stores, about alix: if you talk about tech and health care, the first and it for both the physical experience comes to mind is amazon, berkshire hathaway and jpmorgan. and also for an interconnected what do you think they're going experience. to do for the industry? jeff: they are creating a it it will go into our catalyst for change. technology,mbrace associates in wage benefits and technology to help them do their we have to embrace consumerism job, and into the supply chain. and do things differently. i think the winner is going to of yournother hallmark be who is able to manage the data. you have self-reported data, claims driven data, social regime is managing return on invested capital. does that keep you away from determinants of health data. investing too much? who can get the person to take that first step and take control of their health? lastly, awareness. does that restrain you to some

extent? focused rbc and how do these platforms make people feel? david: we are pretty sensitive about our health care data. we need to get a return on that investment. how are you going to guarantee does not going to be hacked or with the $11.1 billion, we told shared? investors that we will produce a lot of digital companies are something north of 40. alix: how much of what you're under siege right now. jeff: in health, trust is paramount. but we try to do is help you investing will compete with amazon and that you will try to build a health profile, and lower your prices to compete, empower the consumer to own the that deflationary aspect? >> for sure we will invest in data. the customer through price and innovation. in terms of products, features, the person controls the information in the same way they benefits, and that goes against can turn off and on wi-fi, they multiple competitors that we can exchange their medical records. face. part of what we have been able trust is everything, but us to accomplish our market share breaking through and saying it is not the insurance company gains, and we continue to do that. that owns the data, it is the david: we are in atlanta person. if a person changes health plans overlooking technology square. what is the extent to which home or doctors, the data goes with them. alix: but you have to protect depot has gotten into technology it. what do you think the threat is? jeff: outside of trust and ? explain what you are doing with your supply chain. >> sure.

transparency, rejecting the data protectingber one -- over the next three years, we will convert our supply chain from the two day network to a same-day state to state network, the data is rule number one. opening north of 150 buildings blockchain's and technology to lock down this security -- to make that happen. that is all supported by technology in the background. blockchains and technology to , technologyart of lock down this security. is embedded in the business throughout. standards that david: what about atlanta specifically? all of this fragmented data can make it morenly technology really is a hub here in atlanta. >> it is. it is a growing element of the robust but build consumer atlanta community. confidence. alix: what do you make of mark zuckerberg facing congress? we have an innovation center at georgia tech and we work on ,hings like augmented reality i think that people are so machine learning, artificial intelligence, so the technology used to using these social platforms, it has become such a daily way of life that the train community in atlanta is significant. has left the station. alix: what keeps you up at night? >> multiple things. it is all about transparency. people want to know what you are the effort around cybersecurity doing with my data and people is a major concern. can make the choice, do they want to share that information it is an ongoing effort that all or not.

businesses and our government do they want to pray -- do they faces. that is a challenge every single want to pay for premium day. keepscond thing the services? david: we have a problem in this me up is the way the customer's increasingan in gauging last, and we have to keep pace with that. we can't afford not to. percentage of gdp is health care . will it bend the cost curve? we have to allow the customer to jeff: it will. engage with home depot no matter how they choose. david: would you consider going we talk about how the application will make you feel, international? but the key objective is how you you said you are basically make people more self-aware domestic. >> we are basically north about their health. how do you reduce escalation? america. we will grow through how do you optimize provider networks to get the person to opportunities with our the right doctor. do-it-yourself customers and are digital business. largerital business has toing from branded drugs generic drugs. than incremental to our business and have grown more than $1 billion a year each of the last we can get the people on their four years and are digital smart phones at the right moment business, so short-term we don't to help them make better decisions and how to control their health care. see an international expansion alix: what is the biggest health on the horizon. care increase that you can take is so muchere out? the biggest that you can help us opportunity in north america take out? that we will be able to achieve what we set out, growing to $120 there are about eight key

billion. alix: what is your nafta risk? objectives we are working on and the first is making people self-aware about their health. deal it isere is a we want to keep the healthy people healthy. we don't want them to turn into hard to say what risk there is chronic patients. at this point. there is a lot of talk. disease management and lifestyle --agement, you will see a we will see what happens. alix: how do you factor in washington dc risks and as a ceo there. manager company make decisions? what we look at it as as all of this data starts to comes at us, our focus has to be take shape of your health, you on the customer and how we drive will be in control at you never have before. david: what is the biggest value for that customer. based on what comes at us, we advantage you have? have to make the adjustments you are up against some big players out there. necessary to drive value at a how could you get an advantage? pace greater than our jeff: everybody talks about competition. alix: it was great to catch up being disruptive. with you. thank you so much. we want to be disruptive but not did you go to the same high school? david: i went to central and he disenfranchised. how do we help them understand went to northwestern. the consumer? alix: thank you very much. craig menear, ceo of home depot. that is where we thrive today is

working with these big the risk on rally continues. organizations in helping them come into the consumer is a mage. alix: jeff arnold, thank you so s&p futures are up after falling 2% on friday. much, ceo of sharecare, this is bloomberg. ♪ disrupting the health care industry. coming up, u.s. interest costs are on the rise. bloombergou have terminal, you can check out tv to interact with us directly. check it out. if you miss anything about -- of our atlanta show, this is the place to find it. ♪

alix: this is "bloomberg daybreak: americas." in atlanta for the day. s&p futures inching higher after a 2% decline on friday. treasuries stable at 2.8%. have $68 billion in total auctions this year. japanese investors sold $34 billion of u.s. treasuries in february, so how will the market absorb that supply? the upside, mix alix: here is what i am the dollar story, crude up .5%,

but aluminum -- a shocker -- up watching. it is u.s. interest cost. over 4%. it shows the average interest that is a russia-sanction that the treasury is now paying on its debt, rising over 2%. situation. how do you manage that as a we have a lot of supply coming company? online. one company asked customers to stop payments because they don't know how u.s. sanctions will japanese investors selling affect the market. treasuries in february and the u.s. sanctions are cbo is releasing its budget specifically against the company deficit projections and i have and the person who owns the to factor in the tax cuts. majority interest. alix: there are a lot of questions. -- and now you have to factor in that having the biggest surge the tax cuts. since 2015. david: basically you have not coming up, markets and much more seen anything yet. for you. ♪ we areare -- alix: moving up to that area. how much higher to those interest costs actually go? i am interested in what price and what yield do investors come into these auctions? david: you better hope that capital investment kicks in soon.

alix: thank you so much for joining us on the road. it has been bloomberg daybreak: americas from atlanta. coming up, join jonathan ferro on the open. he will be joined by market shale -- michael shaoul and isaac boltansky. retail.

under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. ♪ leaving every competitor, threat and challenge outmaneuvered. david: welcome back to comcast business outmaneuver. "bloomberg daybreak: america's," live from atlanta. this wi-fi is fast. i know! i am david westin with alix i know! i know! i know!

when did brian move back in? steel. we are just overlooking technology square. the sun just coming up in brian's back? atlanta. he doesn't get my room. he's only going to be here for like a week. --ta airlines, home depot like a month, tops. companies like these have oh boy. innovation centers in atlanta. wi-fi fast enough for the whole family is we just talked to craig menear. simple, easy, awesome. in many cultures, young men would now we will talk to mary stay with their families until their 40's. v, who isr of veriti kind of the canary in the mine shaft -- jonathan: from new york city, i alix: canary in the coal mine. am jonathan ferro. david: and frank patterson, the 30 minutes until the start of trading. this is the countdown to the open. president of pinewood atlanta ♪ studios. you do not think georgia being as a movie capital -- alix: "black panther" here. david: the new "spiderman." coming up, another leadership but i have not seen 2. risk on the market, change at deutsche bank. , christianis out rally. the s&p trying to claw back sewing is in. losses from friday after a 2% loss -- the sixth we have seen

the president says china will so far this year. buckle first but china is not deutsche bank, new management backing down yet. they're helping leave the dax 30 minutes away from the opening higher. and asset classes -- i will be bell as a weekly gain swung to a watching supply. weekly loss after friday's 68 billion dollars coming session. online. what will the market be able to absorb? 10 year yield coming on higher. record short on the five-year. the euro-dollar a bit firmer. the 2/10 spread a tiny bit yields up by a single basis point on ten-year treasuries. modestly mixed bank,p story, deutsche dollar story. aluminum ignoring all of that, another leadership change out of frankfurt. after three years the biggest increase since 2015. david: to find out what is going and christian sewing takes the on outside the business world, we turn to kailey leinz. kailey: in syria, and air brace -- airbase has been hit by this is a day after the president warned there would be a big price to pay after a chemical attack.

russia and syria blame israel. over the weekend, activists and rescue workers say at least 30 people were killed in a -- at least 40 people were killed. confirms kim jong-un is willing to talk to the president about getting rid of nuclear weapons. the president accepted kim's offer for a summit before the offer was confirmed as genuine. the majority of britain says the public should have the final say about whether britain should accept a deal. the british prime minister hopes to finalize the divorce deal with the e.u. in the fall. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm kailey leinz. this is bloomberg. alix: thank you.

deutsche bank shares trading higher, help leading the dax higher after their bank officially tapped christian sewing to replace john cryan as ceo. sewing will take over europe's largest investment bank immediately after cryan struggled almost three years to reverse a slump in bank shares. joining us now is matt miller of bloomberg news. set the stage for us. management stages -- changes across deutsche bank. where do we stand? the reason of all, for the change is clear. three years of losses in a row. really, john cryan had not been able to meet his cost-cutting goals, which is something i have talked with you about in the past. it is a difficult job for a chief executive to achieve. no one likes to cut costs. but it is one thing cryan failed out in the last year.

that is the main reason he has to go. he is replaced by a new german ceo. christian saving -- sewing started with deutsche bank as a teenager. able to drive cost cuts through because he is able to work with the union side. he has done well in this aspect in the past. the question is what he will do with the investment bank. he is a retail banker. he has worked on the private and commercial side of the bank, but how will he deal with the 41 thousand -- 41,000 employees of the investment bank, where costs have been a problem in the investment crisis? david: first of all, thanks for the pronunciation. it is a long way from frankfurt to anna, because there is quite

a delay here. is this basically a conservative move? at one point.t he is a cautious person. in his statement, he said he would cut costs where they said he would. as you said before, john cryan did not quite yet the job done -- did not quite yet the job done. matt: not only has he been successful at cutting costs in the past and investigated malfeasance at deutsche bank with regards to their pressure -- russia unit, which they closed, but he is german. germans are conservative people. ever since they passed the baton rit, theyiss and a b have been concerned about the blowup of the international bank business. this is a move back home, back to a bank that will focus on its core business and try to cut costs, especially pullback units

that have gone too far abroad. it should be said that the board didtalk to paul achleitner, talk to big international bankers from jpmorgan and goldman sachs. it looks like sewing was not the first choice, but he is a choice the market likes. shares up about 3% today. alix: wonder if it is an "anything but" that happened there. thank you, matt miller. joining us is keith lerner from suntrust. deutsche bank underperforming all european peers as they underperform u.s. banks. what is the explanation? keith: the reason for the big underperformance is u.s. banks led into the recession and out of the recession. we are still riding on a lot of

debt in european banks. while u.s. banks are at cycle highs, european banks are only back to where they were in 2015. since the bull market started, u.s. banks were up 500%. european banks up less than 100%. david: you are a chief market strategist. does that mean there is upside overall in europe? banking is very important to overall growth, particularly in europe, given the role of banks. in europe, financials are around 20% of indices. in the u.s., there -- the ban in the u.s. there is less technology in europe. we are more bullish, because we think rates will move higher. from our perspective, it provides opportunity. alix: that brings us to earnings season. jpmorgan reporting friday.

keith: what is unusual about this earnings period is during the quarter, earnings have been going up. in fact, estimates for the s&p are up 10%. ast is more interesting is prices have corrected, valuations at global markets are at two-year lows. alix: tech margins are supposed other sectors except for tech have improved. what happens if a trade war affects earnings? keith: we do not know. let's try to put numbers in perspective. we are talking $100 billion, $150 billion of tariffs. if you think about fiscal stimulus and the pipeline, we think it is about $50 billion. if this continues to escalate, it will be a bigger problem. price-earnings ratios

have been coming down. we are down to 16%. will it continue? keith: we do not expect it to go to a new cycle high, but if you look at the brexit story, investors stepped in around the 16 multiple. enginessay, if trade escalate, we could move down as far as 15, about 6% to 8% downside in a negative scenario. and want to turn out of these, the average gain is around 20%. we are still bullish and telling investors how to lean into this. alix: how do you lean in? keith: buy equities. in the u.s., we are bullish on japan. japan just made a multi-decade breakout as far as price. economic gdp is also at a multi-decade high. i think there are a lot of opportunities within the u.s. and overseas. david: what about sectors?

keith: we start with financials. we are still bullish there. industrials have been hit on the trade wars. our base cases this will not escalate into a foreign trade war. it is an opportunity for industrials, because we have fiscal stimulus. alix: how do you hedge? keith: by having things in the portfolio that asked differently -- alix: but what acts differently? keith: when you go back in history, since the depression and the 32 years were the market has declined, markets have been up almost every time. we think high-quality bonds make a lot of sense, even with yields on today for diversification purposes. david: thank you. keith lerner of suntrust, chief market strategist. coming up, we talk with mary laschinger. the guru of packaging. that is next. onyou cannot watch us

television, listen to us on the radio. tune into tom keene and jonathan ferro from 7:00 to 9:00 every morning. that is on "bloomberg surveillance." you can hear them across the united states on sirius fm radio. this is bloomberg. ♪

♪ kailey: this is "bloomberg daybreak." i am kailey leinz in the hewlett-packard enterprise greenroom. coming up, an exclusive interview with jeffrey sprecher. ♪ alix: the paper and packaging sectors are a bellwether for economic growth. but has it run out of ammunition? bank of america think so, downgrading five stocks, including veritiv corporation, which does packaging for amazon

and starbucks, based here in atlanta. joining us now is ceo of veritiv , mary laschinger. have you run out of ammunition? mary: no. [laughter] i have not. with regards to the comments you just made about the packaging haver -- sector, there been significant price increases over the last 12 to 18 months. i think there are worries those price increases are coming to an end. whether or not the happens or not will be based on the supply-demand balance, as well as what is happening with rob material inputs. david: we have heard about lack of pricing power. is it because of the rapid increase in things like amazon shipments? mary: certainly fulfillment is where we would categorize those shipments. demand has increased. ultimately, it comes down to more than just that. there are exports going out of the marketplace as well as just general economic strength for

packaging in general. alix: have clients, like walmart, starbucks -- i viewed terms --hing in -- 93% ofnd 90% of our businesses in the u.s. we have not seen a significant drop-off in any of those. our demand growth has been fairly robust since about this time last year. david: your profitability is a function of revenue coming in and costs going out. what are your challenges, particularly in the employment market? concern,es is a big but it is not the entire picture. we need to look at total compensation for employees. 65% of our total cost structures based on people cost. although wages are modestly

going up, the challenge is much greater than that. health and welfare benefits, and our case, have gone up more than 10% since 2018. it is about total compensation for employees, not just wages. alix: if you are faced with a decision -- hire someone new, higher someone less qualified and trained them up, or pay people more? mary: you can never look at who you arending on trying to higher and for what type of jobs. we recognize we have to do more internal training, because we are not able to get the talent we need in all of the roles we need. training programs, isering a balanced approach important, it, nation of wages and benefits, as well as other benefits beyond just health care , to attract talent. david: your taxes are going down. what will you do with that money? mary: because of the nature of

even thoughions -- we are a fortune 500 company, we are -- have only been in existence for the last four years. to that point, we have had net havee losses as we invested in building a foundation for the future of the company. so we do not have those benefits today, but we expect to have them in the future. our approach, whenever we have cash in the business, is to have a balanced approach at paying down debt, investing in the future of the company, and providing value to our shareholders. alix: i want a rounded out with potential risk -- trucking. what kind of backlog and bottlenecks are you seeing? industry hascking been a challenge for many reasons. first, there is a huge shortage of drivers across north america. that is putting pressure, a result of having the talent and the people who want to go in the

industry. there is increased demand for trucking as a result of a stronger economy as a shift to e-commerce, as well as a reduction of capacity in the rail system. that has put pressure and strain on the trucking industry. we are sheltered, somewhat, in that we do 85% of our own transportation, but we still have some exposure with third-party freights. thanksmary laschinger, for being here. coming up, we will find a movie mobile here in atlanta. turns out georgia has become a producing.r movie we will talk with frank patterson, president of pinewood atlanta studios. live from atlanta, this is georgia -- this is bloomberg. ♪

♪ david: when it comes to movies, we tend to think about hollywood, but it turns out georgia is the number one location for filming in the world. pinewood atlanta is a second largest purpose built movie studio in america, with movies like box office hit "black panther," film here in georgia. we welcome frank patterson, the ceo. tell us, why georgia?

it is extraordinary. frank: except when you consider we have a long pedigree of production storytelling in georgia, through turner studios and its subsidiaries, and a vibrant independent scene for years. when you combine that with the growth of the movie business generally and the focus on identifying places with smart policy, good business cultures, like georgia and good tax incentives, the industry wants to go for the opportunity is. georgia has been the opportunity. david: how big is the tax incentive? frank: if you look at the history of tax incentives across the u.s., they can, and go -- come and go. resources.recipe of taxes are important. so is a strong labor force. thes building infrastructure for us to

manufacture the movies. georgia has that magic recipe of thatte investment capital has dumped into the infrastructure, the smart tax policy, business-friendly state. georgia has done really well for the last 5, 6, 7 years. david: intellectual property is an important underpinning for the entire industry. we now have this big 301 dispute with china. how do you feel about that? our --d protection from for international -- four intellectual property, but you need that market. frank: product like film are not the first weapons that policy makers in. it is not grain, not tires, like president obama did with china. we have been dealing with protection is government in

china for years in the movie business. there are only a certain number of foreign films that can be imported to china. the current number is 36. there is talk about moving it to a 50 and 60. so we struggle with it with china anyway. through coproduction agreements and a typical desire that most countries have import our betural product, we tend to -- not immune, but let's say we are one of the last in the streets to feel the impact. -- one of the last industries to feel that impact. alix: where can growth happen? frank: the direct to consumer platforms. netflix, amazon, google, and what has needed to happen for a long time in our industry is the growth in that relationship, the direct to consumer relationship. so we are seeing a enormous output by netflix, seeing big

growth coming in apple and google. ,s we watch box office relatively, shrink , actually,ear attendance is dropping, but we are seeing a enormous growth in the platforms. alix: the movie you're looking forward to most, coming out? frank: if you do not see "avengers: infinity war" -- i live for those movies. much more coming up from atlanta. the ceo of intercontinentalexchange and his recent buyout of the chicago stock exchange. this is bloomberg. ♪ retail.

under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store

near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. ♪ alix: hunger games -- christian

sewing takes the reins and says the bank must regain its hunger for the business. the art of the deal -- the president says the only thing going on between the u.s. and china is stupid trade. beijing studies devaluing the yuan. and earnings season is now on deck. david: welcome to "bloomberg daybreak: america's: atlanta." i am david westin, alongside alix steel in atlanta. it is actually pretty foggy. alix: i think that is rain. great we have already a program here. we talked to the ceo of home depot. we will highlight that conversation for you later on. alix: the reason we are here is this is a huge area for businesses. tons of ceos are here. you will talk with the ceo of

-- weontinental exchange, will talk with the ceo of intercontinental exchange, after they bought the chicago exchange. later, we will talk with jeffrey arnold, the chairman of sharecare. and what he things about zuckerberg going to the hill. david: right now, let's check in on what is going on outside the business world. kailey leinz is here with first word news. kailey: russia says israeli warplanes carried out a missile attack on an air base in syria. the attack came a day after the president warned of a big price to pay after reports of a chemical assault. rescue workers and activists say at least 40 people were killed in the suspected poison gas atack that took place on rebel stronghold outside a rebel stronghold outside damascus. china is looking at it options -- its options. one of them may be a gradual depreciation of the yuan.

officials are studying the effect of using the currency as a tool in trade talks. in hungary, the prime minister has given a boost to a populist challenging the e.u.'s democratic values, clinching a fourth turn. his authoritarian approach has made him a role model for antiestablishment parties from italy to poland. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm kailey leinz. this is bloomberg. alix? thank you. we want to get you updated on where we are headed in the markets. feels like a risk on day. as of the up about 15 points. but a recovery from what we saw friday, when the s&p was down about 2%. a mixed dollar story. euro-dollar -- we call it flat on the day. yields moving higher by about

two basis points. lots of supply coming online, so can the market absorb it? the dax doing well. i wonder why? david: it may have to do with deutsche bank. deutsche bank really moving higher on the news that christian sewing will be replacing john cryan as the ceo. we go now to steve erin, covering german banking for us. give us a sense of why deutsche bank is responding so favorably to this news? well, the past two weeks at least, if not two years, have been hard for deutsche bank. emergedce speculation that the chairman was looking now ex ceo john cryan, everyone was asking themselves who would be the next guy. sewing, the appointment of him, has resolved that uncertainty.

no matter who is the new ceo, it is great. uncertainty is over. i think that is really what is driving the share price. is clear, from the background, that he will be able to cut costs. in his opening statement, he said make no mistake, i will cut the costs. where is the growth going to come from, though? ken christian sewing bring the coast -- can christian sewing bring the growth? teven: that is a good question. they think he will be able to cut costs. john cryan failed to deliver on that promise. christian sewing staking his reputation on cutting costs, but will he deliver on growth? the investment saving bank has dropped, to the lowest level, in terms of revenue in a long time.

he is working on a restructuring of the investment bank. the outcome is what everyone is waiting for now. arons of bloomberg news, thank you. in the market, a risk on day. that means selling treasury on the mark to -- on the margins. $68 billion worth of treasuries will be auctioned off this week. how do you want to position yourself? waldner,s now is rob strategist at invesco. i want to start with the auctions, because we have the supply. is there going to be the demand as equities continue to find their footing? rob: if the market continues to have the funds to get that supply off. a couple of things are working against supply. one, the fed is reducing the

size of their balance sheet, so thesere buying less of quality assets. and foreign investors have less incentive because hedging costs have increased so much, to buy assets. japanese investors actually sold $34 billion of u.s. treasuries in february. do you feel that overseas demand will come back? for overseas demand -- in treasuries and corporate bonds. and high-grade corporate bonds, spreads have been spreading quite a bit. hedging costs have really increased. i am sure you have talked about the libor-oas spread. that continues to drive up hedging costs, along with rate increases, so u.s. fixed income becomes less attractive, and a lot of the investors you are talking about are interested in the fully hatched. david: the top of the range is

defined by this increased supply of treasury. on the other hand, the bottom of the range is defined by things like the president's tweeting. who will win out in that tug-of-war? rob: we are stuck in that range. the thing that can upset that is some sign of either inflation -- so if we got real inflation, which we do not think will happen -- but if it happens, it would be a surprise. that is where we break above 3% in the 10 year. rise and is given the libor, the complete lack of inflation, maybe the fed gets more dovish -- that may drive us down. it is not trade. not these things that i think are defining the range. it is more fundamental economic data. alix: if you look at the high yield investment grade, the widening is in investment grade, not high-yield. how do you explain that? rob: the exact thing we were

talking about -- the global buyers have riven the market the last couple of years are pulling back. so there is less demand from those buyers. those assets, high quality , are driven more by total return buyers in the u.s. investorn you are an looking at april 4 lyons and have to manage some sort of risk from washington, that trade has not truly panned out -- where do you go? rob: the best way to manage your risk is to pare back on risky assets. you are right. in the current environment, to on the cute -- acute dollar position can be tricky, probably because growth inflation are not correlated right now. david: is there a danger of becoming complacent, particularly in corporate credit? as that range has continued hasn't leverage really

increased? rob: i read we are at or near a record of ratio of corporate leverage to gdp. is there increasing risk their? -- there? rob: it depends on the time horizon. -- underwriting is deteriorating. there is more debt out there. over the medium term, that tinder for issues a few years down the road. in the short-term, three to six months, we think the drivers will be growth, which is very good, although consensus has it inflation is benign, so that will be supportive. alix: curve flattening -- when does it freak you out? rob: evidence says when you invert -- when 2/10 inverts for cash inverts, recession follows. that is pretty much through

history. so we flatten quite a bit, but we have not gone invert it. so we can sit at the flatter level for quite a while. what we knew is -- what we need to do is watch inflation. rob waldner of invesco, thank you for joining us. coming up, we will speak with the ceo of intercontinental exchange. why did he just by the chicago stock exchange, and how can the company diversify? live from atlanta, this is bloomberg. ♪

♪ kailey: this is "bloomberg daybreak." i'm kailey leinz. is agreeing to buy an illinois-based company that represents an 80% closing premium for the company. facebook data was shared

with cambridge analytica, you may find out soon. facebook will post a detailed data stolen in the scandal. shares of the aluminum producer controlled by the russian producer oleg deripaska plunged today. sanctions make it almost impossible for deripaska's empire to do business in u.s. dollars. that is your bloomberg business flash. alix: thank you. the intercontinental stock exchange is growing its global exchange empire. the parent company of the u.s. stock exchange really -- recently announced it is buying the chicago stock exchange less than two month after u.s. regulators blocked the sale. joining us now is jeffrey jeffrey pressure --

jeffrey sprecher. chicago, and you are based in atlanta. why? sofrey: we own 12 exchanges, doing a deal with chicago will be our 13th -- it is the opportunity to have a presence in chicago. atlanta has become a tech-centri c city, so we can sit in atlanta and operate exchanges around the world. david: did you decide to come to atlanta because of tech? jeffrey: i am a serial entrepreneur. i was running another company -- i saw a little failing company here in atlanta and acquired it did i came out on a monday morning. there were 47 employees.

to everyone that i would be moving ever want to california, thinking they would be thrilled. an hour later, a said we all decided to quit. i recognized how strong this community is an recognized if i was going to build a business with that group, i would -- it would be incumbent on me to move to atlanta. s, a southerntho charm, that really exists in the business community as well as your neighbors. i found i have been able to take this little company and build it into a fortune 500 company by a attracting people to live and work in atlanta. alix: $40 billion market cap -- that is a huge company. where else do you want to expand to? cme just announced a deal to buy next group -- nexgroup.

where do you need to compete? is in dataal growth and information. people who use exchanges are managing risk and making investment and information today is key. the last thing i did before i came on set with you a shut my smartphone off. the first thing i do when i leave is turn it back on. i cannot live my life without information. that trend is going on throughout business. in order to manage risk, customers are grabbing information, consuming it, using all kind of analytics -- this move towards ai -- to figure out what is going on in the world. ,nd how do do i position myself onyx changes, to manage that risk? david: talk about how you position yourself in the exchange business specifically. ex,now have cme buying n

giving them a leg up in treasuries. how much of your future growth will be in fixed income? jeffrey: a lot. business isthis -- a complicated market, going from analog to digital. those of us with digital platforms and global distribution are moving into that area to provide tools and technology to our customers. there are a lot of different debt offerings in the world. but there is more interest than ever in people holding that. -- debt. we have the emergence of exchange traded funds, etf's. the newthose list on york stock exchange, so we have a nexus to those people. so we are working on how to make it easier for people to consume. your mifid ii really help

business in terms of pricing and other services traders may need. does that continue if big banks try to capitalize on that? jeffrey: i have two minds on mifid. i think it is an overbearing piece of legislation. i think it will stifle growth. it is demanding that consumers have a lot of tools to comply with it. my companies in the business of providing tools. so we are doing well, even though from a purely political standpoint, i do not think it is good public policy. i think it will export itself to the u.s. and asia. because once large investors change their workflow, they tend to want to do that globally. so the workflow will change in europe as a result of mistake -- mifid. some of the good things that will come out of that will be exported. david: you are the chairman of the u.s. stock -- of the new york stock exchange. listing --nitial

spotify. the banks did not do too well. how does it affect your business if people start doing it that way? jeffrey: it is hard to know. spotify was an interesting company, because it did not need to raise capital. the new york stock exchange has almost asd 226 years, long as the united states. it has been a capital raising venue. for the first time, we have seen someone say i want to be a public company, but i do not actually need capital. whether that is an anomaly or the beginning of a trend is hard to know. one thing you do see is capital is available for private companies today and away it has never been. a lot is made about the fact that there are less ipo's today than during the last technology boom. but in the last technology boom, the dotcom era, companies were going public as a primary

vehicle to raise capital. today, those companies can raise capital in the private market. by the time they get to the stock exchange -- and we have become a leader in tech -- they come because the have complicated ownership shutters tables, they call them. they need to turn over their shareholder base. those ipos are much more complicated than the ones we saw 20 years ago, and they lend th screens to the floor and capabilities the stock exchange has. you saw the spotify ipo -- it took the entire morning to place the ipo. that was a combination of tech and humans, telephones and keyboards, that got that done. alix: how about the saudi aramco ipo? how do you market for that? jeffrey: we feel like any large company that wants to touch large capital markets should be in the united states. i do not mean saudi specific.

i mean any large company. we had the deepest, most liquid capital markets in the u.s. if you want to raise large amounts of capitals, this is the place to do it. david: the reporting is saudi aramco is somewhat hesitant because of the closures. as you talk or someone from the new york stock exchange talks with someone responsible in saudi aramco, is there any room to maneuver, to say we will change this a little bit, let you off the hook little bit, how does that work as a practical matter? jeffrey: i am a public company ceo. public companies have their own legal challenges. there is a lot of disclosure we make and there is challenge to what we do. that is part of being a public money. i do not think we will change for anyronment, per se, one company. it is good to have that dialogue. i think the trump administration

is trying to roll back some regulation, even under the obama administration -- there was an attempt to bring companies to the public markets on an easier glide path. in washington, that conversation is happening. to the extent that the saudi's can help stimulate that would be good for everyone. alix: what do you think the biggest hurdle is for a saudi aramco listing? what do you think is the biggest impediment? jeffrey: i do not want to speak for them, but it is not easy to be a public company, for many people. i personally enjoy it. it is rewarding to be manager of a public company. it is amazing to stand on the podium and ring the bell of the new york stock exchange. it is a symbolic event that says person, aeen a young teenager, and you are now acting as an adult. adult comes with its own benefits. alix: and it comes with this --

its issues. so if you are another company, what might make you say it is tough for me? jeffrey: i am bullish. i think being public is a great thing. it puts a certain discipline on a company. once you have the discipline of the market, it is rewarding, because it forces me and my management team and others like me to make tough decisions. i get the sense people want to avoid that, but at the end of the day, it is best for the company. david: you are a big player in the exchange is this. you have three other rivals people talk about. how do you keep score? what is your advantage? jeffrey: my shareholders want to see the company grow. that means constantly reinventing yourself. i look at where are we now and where do we need to go and how do we get there before my competitors can get there. david: talking about growth, you have done it largely by

acquisition. are you going to continue to acquire, and if so, where will you acquire? jeffrey: we acquired analog is is is and bring -- we acquire analog businesses and bring technology to them. so we look to find can we continue to find parts of these markets and put technology in. alix: cryptocurrencies, securities contracts -- when will we see it on your exchanges? jeffrey: i do not know. there is a trend here we cannot ignore. it is early days. there is something about technology today that many people are more comfortable with it than there are the institutions of government and society that i grew up with. people put more faith in a guy akamoto that no one has ever met then the u.s.

fed to you that is an interesting trend. people in your city avoid getting into a taxi that has been inspected, has a medallion, has been certified, and we will get in a car with a nameless driver, because that person has three phones up. those are,now whose but we are comfortable around technology. alix: thank you. real pleasure to see you, jeffrey sprecher. coming up, changing of the guard at deutsche bank. shares of deutsche bank on the move with news of the new ceo. this is bloomberg. ♪ welcome to the xfinity store.

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