plan. president trump helping a chinese company to get trained done as top level negotiations begin in washington. it depends on the definition of independence. the turkish resident says the turkish bank is independent but expects to have more influence in the future. fluke or trend? german investor outlook disappoints raising questions over global growth. welcome to "bloomberg daybreak." i'm david westin with julia chatterley. welcome back. julia: you had the courage to come back. julia: the president may or not have a plan. for the first time in five days, stocks set to open .2%. the look has a whole host of factors. modest gains for the u.s. market yesterday. a break for the dow.

this comes off the back of a weaker asia session and a muted european sessions. we'll talk about china in a second. also what we saw in europe. is --estion for the ecb is this going to be sustained or is it temporary? euro-dollar under a bit of pressure given the session today. right now, trading above $71.5 a barrel for crude. protests in gaza adding to the sentiment in that market. david: the magic 71 number. time now for the morning brief. you get economic data including critical retail sales numbers for the month of april. at 10:00 this morning, richard clara, will have his confirmation hearing for the senate banking committee. china's eyes president -- vice keyident arrives for a

talks on trade. now to the bloomberg first take. we are joined by peggy collins. policy is international correspondent michael mckee. questions raised in washington about why the president backed off on his sanctions. first family of the secretary of commerce giving a speech saying dte said inappropriate things and have admitted to it. are there alternative remedies to the one we had originally put forward? that is what we will explore. presidentntime, the after having bipartisan criticism came out with another teet saying cte buys a -- z is reflected of the larger trade deal and my personal relationship with president g shanking -- xi jinping.

what is going on? michael: it looks like the president stepped in a minefield about making this about chinese jobs paired he is now trying to back off. wholelly he dug himself a and his headed down the path toward a trade war and the chinese called his bluff and he is now trying to back off on that. republicans.for the idea of a trade war is bad for u.s. companies. we talked about the hearing. 120 companies have asked to testify and they have had to extend the hearing to get them all in. u.s. companies oppose the idea of the sanctions. you are old enough to remember herge aiken and vietnam and said let's just declared victory and go home. that maybe what happens here with the president where he may strike a deal with china. julia: it is a scramble between

the commerce department and the president and his choice on how to handle this. we have heard from the commerce weretary that he said presented what we wanted from the chinese and they presented what they want to achieve. in washington, d.c.. >> the timing of this is important. we are joined to get a signal to china as the top economic adviser arrives that we are not in a trade war. we are in a trade negotiation. we have seen this time and time again when he plays off his secretaries. he is trying to say, we need stuff and we are willing to give you stuff and we will negotiate. was a lot of skepticism about north korea. it seems to be going out ok. will this also work out for the president? china might be willing to go

along with some things. michael: the companies are warned that they won't get an agreement to lower the trade deficit because china will buy more stuff and won't solve the underlying problem. do force american companies to turn over technology. if they don't get something there, that is a problem longer-term for american businesses. chinese pressure on the north is credited with a lot of movement of the north koreans toward the united states. he needs china in his corner and that be -- maybe why he is backing off. julia: i love that you mentioned signals. waspresident of turkey talking about monetary policy. listen to what he had to say. ? of course, our central bank is independent, but the thisal bank cannot take independence and set aside the

signals set aside by the president, who is the head of the executive. it will make its evaluations according to this. julia: the non-independent independent central bank, mike mckee? michael: he is setting independent policy theory on its head. university columbia professors compounded about companies in liquidity cap switch turkey is not saying maybe if racing rates will push inflation up. he seems to be applying that and saying if you cut interest rates, we will see inflation fall. that is not it -- is what is happening. i brought a chart with turkeys lira and the inflation rate, and you can see what is happening as inflation goes up, the clara goes down. that is totally unremarkable. goes down.

that is totally unremarkable. there is an election next week, and if he wins, it could push the lira much lower. david: i think it was very nice that mike said if he wins. julia: exactly. david: he is going to get his way, whether it is the right way or the wrong. julia: that is what he is saying, i am going to get my weight with policy. he is speaking to the people of the country and not economists. a habit short-term debt and are independent on oil. he is saying to people, i am going to help you pay less for goods as opposed to talking to us and central bankers. michael: you go back about a decade and he saw the same thing happen in a venezuela when hugo chavez came to office and took over the economy, saying he was going to help the poor. it did not work out. julia: investors are betting

rates will rise. the suggested as he will push the central bank to lower rates and that will increase capital and raise inflation rate. julia: depending on which textbook you read. there has recently been -- david: to the third strike, german industrial production. numbers show trailing off in the first quarter well below for germany where it had been in the fourth quarter of last year. the question is, is this a blip? we of the weather and flu, or is there a longer-term softening of growth in europe? michael: is a general feeling among analysts that this is a one out. global growth strong. germany influenced by things because they are a trade dependent nation and there has been uncertainty about what is

going on. the german economy has been running ahead of its gentle growth rate. you did have the weather and the flu affect and the general consensus is we will see a rebound going forward. julia: the question is about currency strength. the strength of the euro has clearly been a suppressant factor as far as inflation is concerned in the wage negotiation and france and germany. they have been positive. in europe, they are a little behind us in the shifting towards away from an easing of central monetary policy. that is not something that is a light switch that works on-off. it is a process. david: china data out with production exceeding expectations and retail cells -- sales falling short. it appears to be something of a one out. this is the first data that was not skewed i the lunar news --

by the lunar news. if i can bring one more chart. this is the bloomberg china gdp tracker. you can see the red line is the average over the last three years. it is running above average. bloomberg looks at the data and puts it into a gdp model. running running at 7.2%. that is ahead of what they finished in the last quarter, 6.8. david: what is behind this? where does the logo economically? michael: everybody is watching it. it does not appear to be a major concern. julia: is that provided by china? [laughter] michael: our folks are well aware that you can trust the data. david: many thanks to bloomberg's penny -- peggy collins and mike mckee. come in the -- coming up, a sloth -- slow start to the year

it will as christina cooper -- kristina hooper. that is coming up next. this is bloomberg. ♪

>> this is "bloomberg daybreak." i'm kailey leinz. get to the bloomberg business flash great the largest home improvement retailer reported first quarter revenue and sales that rose less than expected. that is adding to concerns that the u.s. market is cooling off. wall street is about to get a

reprieve. according to people familiar with the matter, u.s. agencies preparing to scrap a presumption that most short-term trades violate the regulation. instead, they would conclude that trade would go with the role. a surprise change at the top of the world's second largest mobile carrier. ounce heexpectedly an is leaving after a decade in charge. he will replaced -- be replaced by the cfo. vodafone agreed to buy cable assets in europe from liberty global for $2 billion. that is your "bloomberg business flash." germanwe got the latest growth number and paste expansion was cut in half. there seems to be a slowdown in the first quarter for european growth overall. the question is whether this was a fluke or points to something longer-term? welcoming christina

cooper -- kristina hooper with invesco. it is a first quarter slowdown, not different from what we have had in the u.s.. no suitably a factor, but my view is growth will pick up in the second quarter. david: what about the strength of the euro? will it curtail growth? kristina: only if it gets out of control. it is an a place where growth can continue and get more robust , but if it gets very strong, it can be problematic. david: germany said part of the problem was trade where they were hurt. what would have caused that? kristina: there are a variety of factors. germany may be looking to focus specifically on trade to narrowly, but there is concern about what happens to germany in a world with the trump

administration in charge with the united states. much of what was expected and relied upon is now uncertain. ist we know about history that economic policy uncertainty doesn't create an environment where business investment floor shows. .hat could be -- flourishes that could be a problem because of trade policy. julia: on the strength of the euro, globally, the stronger the currency, the weaker the inflation readings seem to be. that has been a conundrum for the european bank. i look at wage negotiations, strong in france, similar for germany. how does the ecb look at what we are seeing? ofthey hope to see some form greater pickup in inflation? look to: they have to the first quarter weakness and attributed to temporary factors and look more to a global economic environment that is

supportive of growth and look to factors specific to the eurozone , recognizing there is a lot of uncertainty out there which suggests caution. julia: i want to talk about what you call the potential frankenstein monster. david: we are looking well past the first quarter on this one. julia: italy, what do you make of this? kristina: we are in a very unique situation in that we have two populist movements that have conjoined, with very different interests. we got the north that is focus on cutting corporate taxes, which would curtail government revenue. we have the five-star movement that is very focused on providing some level of basic income to poorer italians. that combination can be quite disastrous and can blow through

covenants with the european union. talk about a government that wants to cut taxes and spend more money, it sounds like things are going on in washington here we have seen this before. kristina: washington has no covenant with a larger body. italy could potentially get to the point where it takes on a lot of debt. it will also be difficult to service debt in a rising rate environment. hugeinly, that is not a concern right away for italy. it is a bigger concern for the united states. it does not make for a pretty picture. david: you mentioned concerns about the trump administration in charge of trade. there was a speech yesterday and it was explained what the position was. >> the united states is the most open and the most exploited market in the world. both china and europe eloquently espouse free-trade rhetoric, but

in actual practice are far more protectionist than the united states. david: what are the chances he is right but fixing the problem will hurt economic growth? kristina: he is not wrong. some points he has made our right. you have to pick your battles. if i were leaving the trade delegation with the trump administration, i would focus on international property violations because those strike at the core of business and the future of u.s. business. i would be far less focused on the trade deficit, which is to a certain extent to be expected for an economy like the united states. muddying the issues creates confusion. the cato institute out a good piece on this topic and is suggested that if the administration is serious, it should pursue this through the wto as opposed to tariffs and creating an environment where we

could have a trade war. julia: you could argue that the wto is irrelevant and local their own way. what will they see where they investorrough from the position and taking out asymmetry that you alluded to? even to, it could be the benefit of not just the united states that to europe with trading with china. kristina: there is the possibility this gets better. the chances of the situation get better improve if we prioritize trade violations and what our issues are. when we confuse those and make it seem as though a trade deficit is as important as property violations, things are going down the wrong path. julia: let's hope the path right itself. great to have you with us. kristina hooper with invesco. thank you. between chinaade

and u.s. negotiations and we will hear about that next. from new york, this is bloomberg. ♪ >> i talked about trade and the importance of trade and how i felt that two countries trading together make the pie larger. true and undoubtedly true that not everyone has been advantaged from that in either country. we have to work on that. not thehat tariffs were right approach there. ♪

julia: julia: apple: in the cross hairs in the united states and china. ceo's tim cook met with president trump on the subject for an interview with the david

rubenstein show. tim: i met with the president the next day. i would not want to sit what he said because that is not the way i look at it. what i talked about was trade and the importance of trade and how i felt that two countries trading together make the pie larger. it is true, undoubtedly true, that not everybody has been advantaged from that in either country. we have to work on that. were nott that tariffs the right approach there. morewed him some analytical kinds of things to demonstrate why. we also talked about immigration , and the importance of fixing the dreamer issue now.

we are only one court ruling away from a catastrophic pace there. can watch the full interview with apple ceo tim on the david rubenstein show coming up in june. it will only be on bloomberg television. he has a lot at stake in trade with china. julia: absolutely. not just in terms of supply, but when you look at the ofgraphical split in terms where revenues are generated, growth opportunities in china are clear. again andve seen it again. they are a large seller of iphones into china compared to other rivals. he doesderstandable why not want a trade war with chinese. julia: for the chinese, if you are to go to the ceos and say that you have to make it clear to your president how painful this will become, this is where you put the phone call in.

he is the one who came out and said we are going to employ these people because of tax cuts, and the president embraced that. it was a surprise and he did not expect that. maybe he will listen to tim cook. coming up, our exclusive interview with the turkish president. his prescription to fix the country's economy. that is coming up next on bloomberg economy. ♪ mom, dad, can we talk?

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seems a bit long, but okay... set a memorable wifi password with xfinity my account. one more way comcast is working to fit into your life, not the other way around. is "bloomberg daybreak." alix steel is off today. looking at the futures, pushing into the red, stocks opening lower for the first time in five

days after modest gains in yesterday's trading. we can see stoxx 600 managing to hold in positive terms. weaker session in asia overnight. this is due to the delivering push and tightening and financial sectors having an impact very in the german disappointing for the first -- impact. in the german markets, gdp disappointing for the first time. what does this mean for the ecb as we push throughout the second quarter? euro-dollar under 119 toe, now down below keeping an eye on this session. where about 3% in the u.s. 10 year. the geopolitical concerns added gains to crude right now, higher cents -- 71.5 dollars a barrel.

emerging markets, a fresh record low for the turkish lira on the back of what was an exclusive interview and raising for the concerns about the non-independence of the central bank. david: let's get headlines from outside the business world with kailey leinz. palestinians clashing with israeli troops again today. this time in the west bank. they burned tires and through rocks at israelis, who responded with tear gas. this happened after 59 palestinians killed in gaza. another 1200 wounded by israeli troops. italy, populists trying to form a new government and heading into overtime. the leaders of the five-star movement and leak are trying to nail down a coalition plan. the president has agreed to give them more time with plans to cut taxes and rolling back tensions could be destabilizing. special counsel robert mueller is rejecting claims that grand

jury leaks have tainted his investigation. president trump's former campaign manager wants a hearing to determine if this deprived him of a right to a fair trial. he has been indicted on bank and fraud charges. global news 24 hours a day, online and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm kailey leinz. this is bloomberg. david: emerging markets struggling in days as the dollar strengthened and geos -- geopolitical uncertainty raises. with seen this nowhere else more than turkey. guy johnson an exclusive interview with president erdogan of turkey where he asked about the state of the economy and what role he should have as president in setting monetary policy. all, you are the head of the state. when the people for into difficulties because of monetary

policies, who are they going to hold accountable? they will hold the president accountable. we have to give off the image of a president whose influential on monetary policies. you will play a role in monetary policy? is that the big change? >> yes. this may make some uncomfortable, but we have to do it because it is those who role state who are accountable -- rule the state who are accountable to the citizens. outsidersd from an point of view very unorthodox monetary policy. if you want to play that great a role in turkey, it will be on a different basis than the rest of the world. is that something you are comfortable with? while doing all of these, of course we are not doing them to disturb circles on an international level.

in order toe steps protect my country's interests, and we will do whatever my country's interests require. >> i am curious as to how you think it will work -- how your relationship with the central bank will change. how will that operate? the moment, however the central bank relations are continuing at the moment, they will continue in the same way. we are not new to running the country. we have not taken over the government recently, we have been running this country for 16 years without interruption. you said that turkey had an independent central bank and you talk about that it will carry on and be the same now and afterwards. will turkey come with your greater role in monetary policy, still have an independent central bank? above all else, and it is not

just turkey, we will apply the same governance in turkey in the same way it is supplied globally. today, whatever the governance approach in the u.s. or europe, we will apply the same in turkey as well. what is legitimate for them cannot be illegitimate for us. everyone should know this. we will take steps accordingly, but we will never let our country lose. think -- the comparison with the united states, is your assessment that president trump and jay powell, who is the chair of the federal reserve, does the president speak to powell about interest rates? is that something that happens elsewhere? you are implying you will take a much greater role.

is there another example of somewhere you can see a model working for turkey? is there another country that stands out? >> no, there is no need to argue. the u.s. interest rate policy is known. we do not need to reinvent it because we have all the information to hand. in other words, we know what the interest rate policies are and are not in all of the countries of the world. we are not just discovering them now. therefore, we will take steps accordingly. we will make our assessment according to this. we assess what it is in the u.s. and what it is like in argentina, mexico, brazil, mexico -- and britain. we always make this and will continue to do so. we will make our own decision accordingly. >> mr. president, i would like to talk about politics and what will happen in the upcoming elections. we have a presidential election

and a parliamentary election. if you were to find yourself for you when the presidential election, but we end up with a mixed picture with the parliamentary election as it did in 2015, would you call another round of elections to make sure you secure the parliamentary mandate that the system is almost designed to be set up with? of course, now we have a saying, you do not full your hands before seeing the stream. we have such a saying. there is no point at all to folding the hands before seeing the stream. let's see the results first. of course we will certainly have preparations for a result in the way you described, but for the matters to develop exactly in the weight we planned, and i mean plan a, b, c, of course all of these will happen.

but we look like we are doing well at the moment. 40 days later, a plan as we wished, will emerge and 40 days later, turkey will wake up to a much more different era. david: that was part of bloomberg's exclusive interview with president erdogan of turkey and for more on turkey and other emerging markets, we welcome richard segal, senior investment analyst for emerging-market debt at manulife. i'm going to put a chart up that shows what happened between across of turkish lira and the dollar, right after this interview was given and what it shows is they are off to the far right. it is more than two standard deviation change here. the fx markets respond quickly is this giving a a lot of concerns to potential investors what the president had to say in turkey about the independence or lack thereof of the central bank? richard: it is a step change.

while many investors have questioned the ability of the bank to act independently, many were also reassured when the central bank began to implement and interest rate quarter which allowed it to set an upper limit of interest rates of 13.5% compared with a nominal benchmark rate. these statements, above all emma raise the degree of -- all, ofse the degree of certainty what may be the monetary policy. turkish monetary policy has he come complex. it is not just in interest rate quarter, but it also applies macro credentials and guidelines, for example, limits on day's across a number of products. the main concern to the fx markets is the uncertainty rather than any suspicions about what the executive might do in

41 days from now. julia: you came in saying you thought the meeting from turkey will prevail and it has a load debt in particular. we have an election coming up and analysts saying the central bank needs to hike rates to try to stabilize the currency that is at a record low. where you stand? have you changed your mind do you think the outlook looks good? richard: i think we still have to remember that we are in a very heated election campaign. it does not look as right for the ruling ak party as it did a week ago. in past election campaigns, the andy in -- the ruling party turkey has talked about the interest rate lobby to sway public opinion in its favor. and i rehashed last week think when the election parity

is over, a lot more reassessment is going to happen. the future looks bright, however we have to get through this election. period. julia: you are saying this is posturing ahead of the election because a lot of people would think they're concerned about the political outlook and the increasing autocratic nature. now he is talking about controlling the central bank ultimately. richard: i think the question about the bank is that it has had a lot more independence and we think, but it has had to play a delicate game internally and in particular by promoting to separate benchmark interest rates -- two separate benchmark interest rates because it found itself in a delicate situation. there is no evidence of central bankers being asked to leave or

instructions being given to the central bank. the main question about turkey is not really the political rhetoric. of course, it hurts and it hurts in terms of volatility, especially when emerging markets are so fragile. ultimately, is a question of the fundamentals. investors are concerned most about companies with high inflation and high deficits. it makes it that much worse for turkey. david: i was going to ask more broadly about emerging markets. we have a chart that shows not all emerging markets are created equal. some have substantial deficits, and turkey is at the top of the list. others have surpluses. to what extent when you have stress on emerging markets do investors be to focus on the current economic situation? richard: as a sentiment indicator, it is very important and you have to look at the broader balance of payments.

if it is a country that is going rapidly and has deficits which are wide at a time of global confidence and capital flows, it sometimes iter and is an indicator of strength. these days, with fragility and uncertainty about the fed and global trade war concerns up and with the also possibility of contagion between turkey and argentina to -- it is back and forth. david: thank you so much for your time. that is richard segal from manulife. secret from a star-studded crowd and we will look at that next. you can turn on your radio and listen to tom keene and jonathan ferro from 7:00 to 9:00, and join the conversation from 9:00 to 10:00. this is bloomberg. ♪

kailey: this is "bloomberg up, u.s. chinang business council president. julia: we now return to the wall street beats were recover what wall street is buzzing about. making andecurity marking an end of an era for market supremacy on the streets. p ease golden opportunity.

golden opportunity to bring in profits. a secret. every year the robin hood foundation concludes its gala counting up the donor nations it receives spread this year, things changed. kelly joining us is jason from bloomberg. this big chains at goldman sachs. jason: we like to see what people are reading. this story is going bananas. overnight andone this morning. it, theen you dig into commodities business is one of the most talked about, not just at goldman, but across the banks. david: and recent years troubled at goldman. absolutely. there were bankers who really made a lot of money for their

banks. david: there was $3 billion a year in net revenue. jason: exactly. julia: there were very few women on the management committee. jason: what are the most senior roles was a woman. that is a very dear -- very big deal given what we have been talking about. we talk about the pay gap and it comes in play as of this reason, sophie very senior women at big banks. few very senior women at big banks. julia: what about investors? jason: one of the best-known private equity firms in the business, kkr and others getting into trying to figure out how to make money off of people telling other people how to invest their money. david: this is what i don't

understand. they say we are going to buy it, fix it up, and sell it or are they doing it as a source of funds? jason: that is a great question. the short answer is yes. i think the reality is they are very profitable. but at the same time, the big especially kkr and blackstone and others, have started to dive deeper into how do we get this as a means of distribution? you have to think there is a little bit of that at work here as well. ,avid: talking about superrich we had a change in state laws and new tax laws, but it goes away potentially and they are worried the democrats will change it back again. if you're worried about the superrich is grandchildren -- are you worried about the superrich's grandchildren? jason: to tell you how wealth is

trending, heart of this is that the key element here is the notion of the dynasty trust. the reason there is such fervor around it is because this text change could go away in 2025. people are scrapped -- tax change could go away in 2025. people are scrambling. julia: amid a political shift. superrich last night had a big event. they got 51 nine dollars. how much did they get this year, jason? jason: i don't know. i wish i could tell you the answer. they broke tradition and you are both familiar with this. usually at the end, they tell you what they raise, but this year they said they are not going to tell you. david: they have a big screen

and they show you in the numbers come out, but it went black. jason: you had jenny from the block. julia: oprah winfrey. jason: i will talk more about this another time, but an interesting shift for robin hood. a lot of big names behind that. more to watch as philanthropy gets more complicated and more sophisticated as we move on. julia: secret. david: i wouldn't be surprised. thank you to jason kelly. depot'sp, home lackluster results. the company seen as a proxy of the housing market. is housing weaning down? julia: you can watch us online and check on our charge and -- charts and graphics and also send your questions. that is all on tv on your terminal. from new york, this is bloomberg. ♪

david: this is what i am watching. home depot. i like it quite a bit. aey cannot with earnings, and beat on the overall revenue and risk share, but store sales were down. stock was down as a result. we talked with the head -- the ceo of home depot in atlanta a few weeks ago about the home market overall and what that meant for his is the spirit he was very bullish. >> we are very porch net -- -- fortunatemer that the consumer is willing to spend in the home improvement sector. for housing, it has been a tailwind for home depot. if you think about new household

formations, we are getting back to $1.2 million, which is a positive for the business compared to where it was in the downturn. seeing money a represent about one third of all new household formations, which is also renews. david: that is the ceo of home depot. you can probably hear the accent and we are both from michigan. housing has been a tailwind for them. julia: the question is -- it is -- is it a temporary blip? we have higher mortgage rates on the back end of the curve creeping up. shortage on the demand side to perhaps. david: so much is household formation for them. it is about the housing industry more broadly. -- thethe kenton question is, again, or a blip or

something more fundamental going on? welcome to this earnings season. david: exactly. coming up, the latest retail sales figure will be out. we continue our retail therapy series with a focus on the luxury retail margaret. we will hear from derek lam's ceo. live, this is bloomberg. ♪

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trump says he is helping a chinese tech company trying to get a larger trade deal done as negotiations begin in washington. it depends on the definition of independence. turkey's president says the bank is independent but it will have more influence in the future over what it decides. and flew core trend? china's retail sales disappoint. raising questions over global growth. daybreak.""bloomberg . am here with julia chatterley julia: a great look as far as the futures are concerned. we have softness at the opening. bouncing around right now around .3% lower. with of news overnight chinese data and the overall mix.

you have to factor in all of these things today. europe is under pressure. very much tied to the q1 data. never learns disappointed. the question all morning is do ?e move forward or will it be sustained. keep an eye on what we are looking at. the 3% figure above the 10 year. that is the snapshot to watch. is rising.yield time now for the morning brief. at age: 30 this morning, we get critical retail sales numbers. 10:00, -- will have his chinamation hearing and -- arrives today for key talks

on trade. but now, let's get a look at what goes on outside the business world. treasury secretary steve mnuchin will sit down for trade talks with china. they may work out a deal with zte which hadh been cut off due to a violation of trading deals. palestinians are crashing with israeli troops today. this time in the west bank. and threwd tires rocks at israelis who reacted by firing back. people were wounded by israeli troops. trying topopulists form a new government are headed into overtime. to nail down a

deal. i will roll back pension changes which could be damaging. global news, 24 hours a day. powered by our more than 2700 journalists and analysts, in more than 120 countries. david: emerging markets have struggled in recent days. uncertainty has risen. and know where have we seen this more than turkey. an exclusive interview with the president of turkey where he is asked about the state of turkey and his role in setting policy. >> first of all, you are the head of the state. when people fall into difficulties, who do they hold accountable? they hold the president

accountable. since they ask the president about it, we have to give off the image of a president who is influent each -- who is influencing monetary policy. inso you will play a role policy going forward? >> yes. those who've will the state are accountable to the citizens. unorthodox view of monetary policy. is this something you are comfortable with? while doing all of these, we are not doing them to disturb circles on an international level. but we take these steps in order

to protect my country's interest. and we will do whatever my country's interest requires. >> i am curious as to how you same -- how you think it will work, how your relationship with the central bank will change? the moment, however the central bank's relations are continuing at the moment, they will continue in the same way. we are not new to running the country. running this country for 16 years without interruptions. >> you said earlier on that turkey has an independent central bank and you talk about how it will carry on and things will be the same now and afterwards. will your greater role in monetary policy still have an independent central bank? above all else, we will apply

the same governance in turkey in the same way as it is applied globally. today, whatever the governance , we willin the u.s. apply to turkey. what is legitimate for them cannot be illegitimate for us. we will never let our country lose. julia: that was the turkish president speaking there with guy johnson. guy johnson joins us from london. great job from the interview. a couple of takeaways for me. -- the stages of hikes to stabilize currency right now, doesn't seem like they will get it. do we have to worry about the independence of the central bank , postelection? guy: i think you do.

this election is about formalizing a presidential executive system. his view is that everything ends at his desk. and as a result, monetary policy is no different than anything else. rates should go down. he thinks they should go lower. he came to london and he knew what he was doing. to bloomberg eddie said, i am in charge and i will be setting monetary policy and rates will be going lower. he knows what he is doing. about ahis is consolidation of power for the president. he has a view about monetary -- i willhe wants to put up a chart here that you know well that is what happened in response to your interview between the dollar and the turkish lira, it went more than

two standard deviations. so the markets seem to be buying what the president is selling. guy: absolutely not. the market is hoping that we will see interest rate rises. what we have learned over the last 24 hours is that the market may be disappointed. whether or not the market new this was a reality. it was interesting having him say that things were not change very much. hinting that things won't change and that isection anause he is already having impact. it has been an open question for a while. david: he has had views on interest rates for quite some time now. [laughter] absolutely, yes talked

about it for ages. david: thank you so much for sharing with us. that was guy johnson in london. lisae are joined by shalett. give us your reaction. lisa: somewhat unconventional as terms of rhetoric but this has been in the air for a while. i think we know where he is going with this. the bottom line, from where we sit is that what is going on in emerging markets wrongfully is really about the global recovery , it continues to be, we got weaker data out of china today from the retail sales that last week we got at her than expected data out of china on trade. and exports.

and we think that is what really is powering tm. em.owering alix: what has -- changed thehas game? of until a month ago, people were saying it was different. suddenly, everyone is going well, the dollar could be a problem here. you think the dollar is overvalued? lisa: we do. we don't think this technical correction or rally that the dollar has had is going to be sustained. as you know, we have gone in 2014 and time 2015 where the dollar appreciated by as much as 25%. and currency markets tend to

overshoot. our sense is that we are going .nto a trend combined with higher inflation, it will put downward pressure on the u.s. dollar and it already of 15%-10%rity basis overvalued. david: we are told that em is different this time. you supplied a chart to track em equities. explain to us what this was? is not about commodities. but now we are back to commodities again? lisa: both em and commodities tend to be very pro-reflationary asset classes. as a result they are correlated. in china andebound you look at russia and india and was ill -- very commodity

intense economies. what we see with global synchronous growth is the inrovement in the price commodities and oil and it will help here. julia: i know that you have a call on china, and talk about what you see there and why you see value? lisa: investors may know that we brink oft the including chinese a-shares in index ande embassy our view is that this is one more step that chinese policymakers are taking and striving to really recap the balance sheet of china. we often talk about how much that oura has perspective is that one of the reasons they have so much debt is because equity markets have been underdeveloped. and this will be one way of real

leveraging their value sheet. david: a massive amount of funds flow going into china? lisa:. originally. it is modest. is the beginning of an important shift. we are also talking about adding saudi arabia to the msci emerging market and we are on the precipice of the saudi's doing the aramco ipo. aramco potentially could have a global market cap of over $1 trillion in total, more than apple computer. julia: stay right there. lisa shalett is staying with us. coming up, crude on the rise. how they way more broadly on growth. from new york, this is bloomberg. ♪

julia: lisa shalett is still with us. he did have a conversation in the past about the dominance of the tech trade and whether they were financing the tech trade or going for pure growth but you have brought this brilliant chart that shows the outperformance of energy since the beginning of march relative to the tech sector. talk us through whether this is sustainable? it is.e do think as we approach the late cycle we see a shift in leadership. literally for the last nine years, the bulk of the entire

has beenve, technology the sector that has led. and in a large part it has led because there was the absence of growth. as we begin to move into the late cycle and we have cyclical growth and spending as well as better commodity prices, we see the energy sector beginning to reestablish leadership, along with other sectors like financial. energyyou can see the sector outperforming in the late cycle, quite fascinating. this illustrates -- david: but our energy stocks getting all the credit they deserve from investors yet? it has gone up but not as much as the price of oil. lisa: that is right. we often talk about the oil data.

how other asset classes respond to the improvement in energy prices. and this cycle, stock investors have been extraordinarily skip goal. that the companies are going to have capital discipline and will be able to exploit the move in prices down to the bottom line. finally, as we have gotten some of the geopolitical premiums into the price now of oil, we do think that investors are buying into this thesis now. julia: and you are looking at national prices? right. it has been about relative valuations. 16.5 times forward pe. whereas you could sell it at emerging markets in lower pe. david: might markets be correct

in not reacting too much. because geopolitics can turn quickly. lisa: you are absolutely right. and i think some of the shifts may have to do with the removal of sanctions in iran. the dynamics within opec and as the saudi's approach aramco. venezuela, it doesn't look like they will turn that around right away. lisa: not at all. higher for longer. julia: and it was a great earnings season for these guys what do you lived in the united states or elsewhere. david: lisa shalett, she will be staying with us, i am delighted to say. the nuclear option. cbs files suit in an attempt to push on with a shareholder vote to lessen -- family control of the broadcaster. this is bloomberg. ♪ roadcaster. this is bloomberg. ♪

the feud between the cbs ceo and the redstone family has turned into open warfare. cbs has filed a lawsuit against redstone, trying to dilute her control. this is all over whether cbs should merge with viacom. is --g us now with more it is extraordinary. way, les moonves has sued his boss. >> he has. they did come out to say that agreedere economic terms

to a few weeks ago. which is interesting because they have agreed to the terms and now they have said that they don't want to do the deal. so sherry redstone has come out and said that she think it is because she shared concerns about a director who was bullying. towards her. david: this will get decided right quick. they go in next week and the court is going to rule one way or another. -- be allowed on that nabila: it will be decided quickly but whether the deal is decided is a big question. get think that viacom will to do it on their turns. viacomif you look at stocks compared to cbs stocks compared to cbs stock since they split, the comparison is remarkable. because viacom has gone nowhere.

nabila: absolutely. done a terrific job. no one is questioning that. he would have got to be the ceo but he doesn't think -- they don't think it is in the best interest of all of the shareholders. and what it comes down to in court is whether they can issue the extra traditional stock to dilute -- david: but there are two classes of stock. they don't have economic control. they only have 20% of economic interest. nabila: right. so they are trying to reduce the voting control from 80% to 17%. but it is being said that the clause they are referring to has been misinterpreted. to can only use it to refer like to like stocks. it wouldn't change the dynamic.

david: essentially, just giving dividends to people who don't have shares to get more votes. at the same time, doesn't les moonves work either way? because he gets paid $150 million if he gets fired. would be more, it like $280 million including the stock. so if he wins the lawsuit he gets his way and if he loses and gets fired, he gets $280 million. nabila: not for him but what about shareholders? prices have come down. this has been going on for several years. les moonves thought he could do a deal with verizon. verizon had talked about merging. david: and one of the allegations is that sure redstone said, don't do it. sources say she

didn't say not to do it, but she said to do this first. because then it would be a notive tax burden which is what they want. so they would rather merge the two and then sell. david: you would get high ratings with this show. bloomberg's nabila ahmed . coming up, april's retail sales will be out in four minutes from now and we will be joined by people who really know about that. this is bloomberg. ♪ that. this is bloomberg. ♪

this is "bloomberg daybreak and we are awaiting the apartheid retail sales data in a few moments.

let's run you through what we are seeing in the markets. lower for the futures at this moment. on ak lacking appetite global basis. five days of gains for the dow and the nasdaq now. further into the positive territory. we had weaker gdp data for germany, france. see it is holding in positive territory. david: don't mean to interrupt but all of retail sales overall. .3%, a slight revision upward. whato, a little bit under they thought. for the last. a little bitmaybe stronger. julia: yes, still with us is lisa shalett. we have seen a soft patch for the consumer and david is

hinting that perhaps we could set that aside again and it picks up, going forward? lisa: our narrative on the is rational.hat it they learned about the tax cut .n q4 there was optimism around the credit card -- around the holidays. and il see refunds now, think we will see a steady consumer for the balance of the year. we know that the u.s. consumer has been very rational this cycle. they run the balances up. given that the jobs market has decided to be strong, it will continue to drive stronger.

julia: i'm just watching the numbers which is a broader theme. david: encouraging, i think it is fair to say. but what about the state of debt? are they leveraging up with the household? lisa: we have seen debt levels come back up but there are nowhere near where they were in 2006-2007. david: so not enough to concern you. julia: particularly when you look at earnings season, a pretty strong season. that weuy into the idea are seeing peak earnings this quarter? or are we not concerned? see peakhink we will earnings in q2 and q3. we think earnings will be fine .nd the economy will be fine

it will probably put a lower incremental multiple on those earnings. david w.: is this looking for something they don't like russian mark are they nervous about that? any slight downside, they would react vigorously. upside, nothing to pay attention to, overall. lisa: i think that is right. earnings numbers are optimistic. double-digit through the end of the year. david: great to have you with us, lisa shalett, as always. home depot posted earnings today. posting a miss. tomorrow we hear from macy's and to wrap up the week, walmart and jcpenney. we do continue our deeper dive into the distant -- into the

different assets in the retail therapy series. will look at the health of the consumer on wednesday. the big box battle for e-commerce on thursday and we .nd with death of the mall sounds dramatic. joining us now is rati sahi levesque and john hundred -- jan-hendrik schlottmann. luxury compares to ishion in a way that really made with quality. amazing fabrics, done by qualified people in italy who have been trained and fashion made in bangladesh, sometimes in squalid conditions and a big mass production so i think that

fashion had a huge run, obviously. it is really coming back. think young women through platforms like "rent the runway" where they can experience luxury dress, much more interested and knowledgeable today. that is why i think luxury is coming back. david: argue more resistant to downturn? betterretail has done than alternative ways. it is hard to go back. we talk about investment pieces. we talk about the power of the fashion, on the runway we see clothes with the lindsay allen got and over decorated like

gucci but really, what women are looking for is clothes to wear to work. they want to look fashionable. they don't want to wear a dowdy suit. downturn, known for the most amazing pant. so don't you think so? great pant,a wouldn't you go back? i always go back. a: in every color. , come in levesque here. into you, buying an item as an investment opportunity because it has like perhaps beyond your own use? exactly it. nowadays i think people are interested in quality.

millennials are saying they will now spend more for quality good and items that are for the environment. so you take that into consideration and you also take andace like the real real you are looking like an investment. fascinatingf the statistics is that 80% of the consignments go back to the primary markets to buy other items in luxury. do you see this adding to the primary market out there? we see this as extending the life cycle of luxury goods. or.le see it now as an but it is both things. they take money they earn with us and they buy things that are

more relevant for that season. so it is a win-win for primary market and the retail market. david: so this is symbiotic with what you do. you talk about making high-quality fabrics, well tailored and things like that. and then they could have a second life? jan-hendrik: we see that a lot. and we also see dresses that last forever. that theymen say bought a dress and they love it and they will where it forever and i say, lee's go back. dresses don't die. as they dry clean them after every rental and they look really good. julia: what about working with brands like target or kohl's, redistributing the items that you do target with a lower price

point? do you see this recycling some of the products as a better way to get access to a younger generation and fostering their interest in your rent? what do you think the best is here? similar to: it is fast fashion. and i think millennials don't look so much now to over consume. they look more to quality. having a closet that is edited. julia: brand matters. they go to us. let's say we have a high quality dress. how long do people own it before it comes to you and does it go through your system more than once? could you go to war three times? sometimes it goes through multiple times. we are a marketplace for buying and consigning.

a dress that you may wear in a season and for years. they would consign the item with us. people are interested in what the retail value is for chanel and louis vuitton and they call us now to understand what the retail value is. so they are deciding between two handbags and they may decide that this handbag by chanel has a better resale value so i would go ahead and purchase that and i willm done with it, sell. women's fashion, fine jewelry and watches, art and home and kids. julia: talk about the differences between online sales and how you think about the omni channel access to your brand and the product? jan-hendrik: that is a huge shift. i don't think you can replace

retail experience but women are used now to getting things immediately. now trying to combine both. we offer an amazing service where we come to you at the office. we deliver full-service. you don't have to deal with paying or alterations. try to combine the ease of online to the quality of service in retail. china whichnow to you couldn't do before. now we have the opportunity because we have mobile apps which go through more people than ever before. isid: this online phenomenal helpful.

could you be doing what you are doing without online? we started as a digitally native company. we opened a pop up in new york in soho the holiday before last. we opened a permanent store in soho last holiday and what we see is that it is about accelerating growth. average we see customers and consignors being more loyal to us as a brand and spending more and consigning more. that is the main piece. people get to see what a preowned item looks like at the real real as far as condition goes. on the showten talk about the amazon effect.

what is part of the amazon marketplace? do you worry about that? do you have to just accept that and go without? jan-hendrik: it is all about ease. is a distinction between the brand and where it lives. you need the store. you need to tell the whole story. and women nowadays look for the quality of the product. ok, jan-hendrik schlottmann and rati sahi levesque, thank you for being with us today. coming up, more on what the latest round of u.s.-china trade

meetings could mean for the u.s. china council president. and today, turn on the radio to listen to tom keene and jonathan ferro. it can be heard in washington, the bay area and across the united states with sirius xm radio. this is bloomberg. ♪ adio. this is bloomberg. ♪

bloomberghis is " daybreak and i am in the hewlett-packard enterprise greenroom. coming up later today, an exclusive interview with carla's karate. carlo bozotti.

trading: s chinese members have a meeting in washington today, this is after trump's concession spark bipartisan criticism that it technology.dize he says that they buy a big percentage from u.s. companies and the decision is reflective of the larger trade deal that he is trying to negotiate with china. .e welcome now john frisbie give us a sense of the setting as we go into these negotiations? we have had trump reach out and , chinabranch to zte taking another look at the qualcomm deal. it should be an interesting week. , we don't have a

lot of insight into the national security issues behind that it is important to keep in mind that they did acknowledge anding equipment to iran they were fined over $1 billion a year ago. the latest dustup isn't around new violations. it is that they were not fully implementing some of the other settlements that they made. punishing executives involved. so we have to recognize that there has not been new violations. but they're making sure that the punishment fits the crime. if there were not new violations and it is about making sure executives are punished in some way, i think we want to make sure we have the right step here. the nucleark option. and they say they will shut the company down which would be out of proportion to what the issue at hand was. so looking at the penalties now is the smart thing.

they have to understand that they can't violate u.s. law but we have to make the punishment fit the crime. david w.: they said they would find another way to skin that cap. but there is another trial with the appearance -- with a lot of them not being too happy. we are testifying tomorrow and wednesday. and we will say to the trump administration that we want to see solutions to the industries compromises.ot -- posted the u.s. team and was led by secretary mnuchin and is coming back here quickly. and i hope that is an

opportunity that two sides will move forward. there are negotiating documents that were leaked two weeks ago when the group was in beijing from washington and the gap was wide at that point. each side made positions that the other side wasn't likely to meet. the two sides indicate they will move to close that gap. at the end of the day, they will help the trump administration to show what success looks like for them. not would lead to an imposition of tariffs. because for most, they feel like it would inflict harm on our own economy. we would rather see forward-looking solutions with the chinese to address the problems they are rather than the sanctions that do more harm than good. julia: there has been a lot of vocal concern about what the impact could be on businesses. what did they say about the

investment plans and are they speaking to the u.s. administration and are they being heard? john: companies are definitely speaking to the administration here and they are also speaking and the u.s.-china business will -- business council as well. because the two identified behind the noise here were around china's practices for transferring technology as the price of admission to the market. and they need to strengthen intellectual technology transmission. it is whether they will fix those issues as opposed to tariffs that will get into a tit-for-tat exchange. i met with the vice minister who was here over the weekend and clearly communicated that to him. that they need to move forward with reforms and implementing them. not just talking about them but

moving forward. having an outcome here that would be positive as opposed to negative. david: it strikes me that you knew who to beat with -- who to meet with. do the chinese know who to meet with? we had wilbur ross, peter navarro, larry kudlow, the list goes on. will this interfere with the united states getting things done? usual you don't go to a negotiation with that many people in charge? in the past decade, the u.s. always had one clear lead. the chinese clearly have that with the vice premier. but all the way at the top is president trump and president xi. beijing u.s. went to two years ago, the white house issued a statement at face at the team would come back to

consult with trump so that next would be determined. julia: john frisbie, brilliant chat with you. i think i know who they don't want to speak to. not mentioning any names. on what i am watching, next. andrew member that you can interact with the chart through tv . catch up on the key analysis and save charts for future reference. , they companies trading turkish lira depreciation -- all of the charts you could possibly want on tv . this is bloomberg. ♪

julia: this is what we are both watching today. this is from what we heard yesterday about the economic impact of price rising. a brilliant analysis. what is $100 in terms of the price of oil field like today compared to what it felt like in 2011 and that is, a lot lower. takes are higher so you out inflation. the united states is more energy independent. out to fill up our gas tanks, we feel better. coming up, matthew harper back. and jonathan ferro. this is bloomberg. ♪

♪ jon: from new york city, i am jonathan ferro. this is the countdown to the

open. coming up, u.s. retail sales rising for the second to month pointing to a healthier second quarter. the united states and china are still wide apart on trade issues. and tightening grip on the grinding to ayra lows. we are down 16 on the s&p 500, -6/10 of 1%. andronger dollar story in the treasury market, yields grinding out a new multiyear highs. the story this morning, the data point to watch his u.s. retail sales. going to bloomberg's michael mckee to get you up to speed.