cbs. he will leave the company after explosive allegations of sexual assault. its swexit moment. the national party tenderly 20% of the vote. president trump threatens a tax on all goods imported from china. china promises to support the exporters. >> it was a big weekend for news. watching the women's final on saturday it was really something with serena williams melting down. >> we were talking about when naomi one and how she was crying at the press conference. >> she did a fabulous job. she was going to win the match in my opinion anyway. >> and what it lines up meeting for overall ratings, that

s&p futures up. the divergence very clear between the u.s. and the rest of the world after the jobs number on friday. euro dollars up by two times of 1%. it is a mixed dollar story. there you see the range bound still. a 210 spread. crude up by 6/10 of 1%. florence and its potential impact toward the u.s.. >> there is always a hurricane or a rumor of a hurricane. mormonime now for the best for the morning brief. -- morning brief. is a big week for economic data in the u.s. u.s. retail sales numbers released on friday. on thursday, we will get rate decisions from the bank of england and the ecb.

now it is time for the bloomberg first take. we have the bloomberg executive editor and peggy colins. we are going to start with the news out of cbs. les moonves stepped down after another explosive report in the new yorker. cbs stock has been rising. the big plummet was when the first new yorker report came out. since then rising market has said he will be leaving. >> it is amazing how long it took for this to come to fruition. the news was somewhat muddled a bit with the announcement of an stepping down but also in agreement with the redstone family. for shareholders in cbs, the uncertainty has been taken away. that is a good thing. >> it may be part of the reason

-- maybe shareholders are happy they will not be merging with viacom. >> i do not put -- i do not know if it puts cbs and play. if they do not have a ready steward to take the reins from him, it could raise a specter of a takeover at cbs. i do not know if any of the big telco giants will want to step in. with verizon getting out of all of the media stuff. i think the second lesson is it took way too long to act. >> just from zero to -- i'm going to ask you a question, david. with your expertise, how much of a loss and of the media industry in terms of content providing and show changing is this? this is an enormous shift in that world. >> les moonves is a great programmer. going back to warner bros. days, he is really gifted at recognizing scripts and testing.

he has really -- and casting. he has really done a fabulous job. enough, iogramming is do not know. >> is cbs going to be in play? that hased the old cbs this content provider that has this giant in the seat and what is that going to look like? no one is going to know that yet. >> what demographic are you paying up for? cbs has an older audience. he was very shrewd and how to pitch to the audience. you have to find someone who was over the top programming for people who do not necessarily use over-the-top devices. >> let's go to sweden now for our second story. leadership has changed there as well. there were elections yesterday. theave three groups up for -- the prime minister leads one group. --have jimmy ochocinco

they got almost 20% or 80% of the vote. -- or 18% of the vote. nobody had a clear majority. >> i also thought this morning that when you have the normally quiet nordic countries also in the populist throw, it seemed a bit surprising. in terms of their monetary policy and economic of sleeting, -- economics of sweden, most analysts are saying this is not going to be a big hit. it will likely be resolved in the next few weeks. refugee crises we are seeing in different countries and the state of affairs in confidence like africa in terms of poverty, europe is seeing such an influx of refugees and immigrants. that is something that will continue to be an issue until those underlying problems are dealt with. >> you know you want to say swexit.

>> i took it from a bloomberg article. it was not mine. you can see a move higher to the krone because it was not expected. this highlights mario draghi's difficulty heading into the ecb meeting. whether or not politics play into the issue at all. >> is going to be a huge issue. it is going to speed the same -- it is going to feed the same kind of populist backlash. if you're going to get an economic slowdown because of a rate hike, people will play against what that means for working swedes and italians. it is interesting to look at the way the data broke out in sweden. the sweden democrats had that huge surge. they are a far right group. they are young populist. they are neo-nazis. >> they came out of the white

supremacists. >> it is extraordinary that you see that kind of a surge. if you cobble together all of the other votes, the center still holds in sweden. most of the vote resides in moderate, generous parties. the immigration rate really peaked throughout 2016. the pressure from immigration will start to wayne a little bit. >> let's listen to our third story. surplus hit on saturday. a record high. they are going to be selling a lot ahead of all the tariffs that will not come down -- that will come down. >> even though we saw apple come out and say this is going to increase prices for some consumers and also ford saying we are not going to be able to build an suv and the states as trump is -- in the states as

trump is saying. trump keeps saying, build yourself in the u.s. that is a hard message for some of these companies to counter. >> apple came out with a statement. they said our concerned with the tariffs will that -- will be that the u.s. will be the hardest hit. there will be hard -- they will be higher prices for the u.s. consumers. >> it is going to cost people money. people are going to see the price of products rise. it will hit. trumpeggy said about telling troopers to make their product here. tellingd no -- trump producers to make their product here. ford said no. we will make it in china and sell elsewhere. you are starting to see more of the reality of trump's belief.

you're going to get a lot of pushback. >> he seems pretty determined. ford said they are going to sell so few here. they are going to sell a lot more in china. >> they would not be cost-effective. if you see an increase in prices for apple products, you can make the argument that apple's customers can deal with that. the differentiator of who is going to have power in pricing tariffs, apple might not have an effect. >> we have seen people pay eye-popping prices for apple products for years now. the economic demographic you're talking about may be able to pay up. comes,o'brien and peggy thank you for being with us. you can find all of the charts we just used and more by running gtv go on your terminal. up, and inconclusive election for sweden. more on the election gridlock in

scandinavia's largest economy. this is bloomberg. ♪

>> this is bloomberg daybreak. billionaire jack markell spent two decades turning alibaba and to the largest company. alibaba as executive chairman plans to hand over the title of ceo a year from now. to focus on philanthropy and education. rival fellggest almost 10%. the market capitalization of digital assets have fallen below

$200 billion. are devisingbanks on a blockbuster deal on -- in saudi arabia. -- are advising on a blockbuster deal and saudi arabia. goldman sachs is also being hired. that is your bloomberg business flash. david: sweden held its election yesterday. not much got resolved. now, sweden faces weeks or months of political gridlock. markus karlsson has been following the story. give us a snapshot of where we are. absolutely. you mentioned the word there, gridlock. that is the word of the day in stockholm. the political thriller is likely to play out in the next few days here in stockholm.

the different parties from the different blocks of the british parliament try to cobble together some sort of willing coalition. that is looking like a tough task. yesterday is that the ruling left wing led by the social democrats and the center-right opposition ended up in a dead heat. they got practically the same number of seats in the swedish parliament. what that means is that neither of them got their own majority. the sweden democrats, and anti-immigration party, a populist party arrived on the scene in big form. they got 62 seats, which means they are the kingmakers of swedish politics going forward. whatever side they choose going forward and whatever side they choose to back or not to block are likely to become the next ruling coalition. the socialt true

democrats have said they will not make a deal with the sweden democrats? is it true they will make a deal with the center-right party instead? >> what you're talking about there business grand coalition, which in germany -- is this grant coalition. that has not been the tradition here in sweden. that is not happen in swedish political history. the problem you point out is say the social democrats they do not want to deal with sweden's democrats. the issue on the other end is some of the other parties on the center-right say they want to deal with the sweden -- they do not want to deal with the sweden sweden -- they do not want to deal with the sweden democrats either. to cobble together some sort of coalition looks increasingly toughult and looks very

in order to get this ruling majority that will actually will the country for the next four years. that is markus karlsson reporting. thank you for being with us. alix: swexit is the backdrop for the ecb rate decision. tradeackling the issue of and what it means for the european economy. economists expect a deposit rates to be hike by september of next year -2/10 of 1% versus 4/10 of 1%. a lot of questions remain during the press conference. joining us is seema shah. think the backdrop for us. not only with trade and how it impacts recovery data, which we have seen to go to some of the indicators, but also the anti-europe and anti-negotiation and insight you -- and anti-european union sentiment that seems to spread. >> we have been looking at the

and it isconomy probably better at what the market sentiment is reflecting. sweden does not help the overall european look. on top of that, we have the threat from the trades that. -- from a trade side. the european economy is a little bit stronger than what was expected and of the first half of the year. inflation is rising slowly. it does look like the ecb is more likely to raise rates at some point in the second half of next year. alix: i am glad you brought up italy. we are seeing a nice rally. yields are down 10 or 11 basis points. the finance minister coming out and saying it is not do any good to extend the budget deficit and wind up paying more for the money we are borrowing. is at the worst-case scenario

that it -- that we imagined? that is the story for europe over more than 10 years. the continuous kicking down the road. markets get very frightened at what could happen. why italy, i understand markets have been so volatile with a response. you are looking at the third largest bond market in the world. any negative happenings in italy have the potential to flood across the global financial system. what we have heard of it last few days is positive. i would not say that things are over. of an electionk being called anytime. nationalistic and anti-euro at heart. david: in both italy and sweden,

you have somewhat stable -- somewhat instable situations politically. one of the ways they're going to pack it together is spreading some money around. what does that do to ecb? sweden, they to are in a difficult position because it is going to be tough for them to put together a governing coalition. that means any necessary reforms are going to be harder and take longer to put through. from the swedish side, that is a slight problem. for italy, we know they want to expand their deficit. it is being held back by market response. with the ecb, i do not think they are going to be responding to the political developments in sweden or italy. they have to focus on the economics. the economics is better than

what markets have been focusing on recently. inflation is gradually rising. the atmosphere is a little better than what it was three or four months ago. alix: as you take a look at my terminal, it is the 10 spread. trade --ng to be the level, i would say that btp's are a goodbye if we if we-- are a good buy think this is going to continue. markets move around very quickly with any kind of comments that come out of their. if you want a view on italy, the safe place to do it is germany. it is going to be less volatile. alix: you will be sticking with us. after up, les moonves out explicit sexual harassment and assault allegations. the cbs and viacom merger also

up the table. this is bloomberg. ♪

david: the drama at cbs reached its closing act when longtime ceo les moonves announced he would be leaving the company after further damning reports. said, statement, he untrue allegations from decades ago have been made. i'm deeply saddened to be leaving the company. let's go forward. this is finally resolved. not just les moonves leaving, but also the dispute between cbs and its owners. that is resolved as well. >> we have seen the stock trade up over the last several days. if nothing else, the cloud of uncertainty surrounding the ceo

and the litigation with national amusements will be clearing. the question is now what is next? viacom are going to continue to operate independently in the near term. viacom has a lot of work to turn itself around. cbs is in a much stronger position. they will need to look for a longer-term ceo. a strategic seo. -- a strategic ceo. the question becomes, is cbs a standalone company? think we have a chart to show what has happened to the stock value of cbs and viacom since they split. we have to remember where this came from. viacom was really struggling. cbs was on a tear. what is going to happen to my come? -- what is going to happen to viacom? bakish, he has a lot of work to turn around the network.

a lot of -- the question is can he get this ship turned in viacom? landscape,idating disney buying 21st century fox. if you look at viacom and cbs, neither company has scaled. if you were to put the companies together, that company would not have enough scale. my sense is that over time, both of these companies will be acquired. the good news is from an investor standpoint, national amusements has listened of the restrictions upon which they would prevent potentially a sale of both companies. that is positive for shareholders. alix: i have a question for both of you. who should lead cbs? doesn't need to be a content person? -- does it need to be a content person? versus threenow

years ago would be completely different. >> les moonves is a great programmer. that is not what they need now. they probably need a more strategic ceo that might have a better sense of the convergence of technology. david: you may need a dealmaker. alix: interesting. experiment. we will become -- thanks very much. coming up, bracing for impact. apple watch and speakers could become more expensive after president trump's tariffs were with china. as is bloomberg. ♪ -- this is bloomberg. ♪ xfinity mobile is a new wireless network

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by the gig or unlimited. saving you hundreds of dollars a year. plus, get $300 back when you buy a new smartphone. xfinity mobile. it's simple. easy. awesome. click, call or visit a store today. this is moving day with the best in-home wifi experience and millions of wifi hotspots to help you stay connected. and this is moving day with reliable service appointments in a two-hour window so you're up and running in no time. show me decorating shows. this is staying connected with xfinity to make moving... simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today. alix: this is bloomberg daybreak. happy monday everybody. know trade impacts as of yet. the war of words thrown between the u.s. and china.

s&p futures up by 11. the jobs data really helping to lift of the sentiment in terms of the u.s. outperformance versus the rest of the world. that continues to be reflected in the equity market. take a look at the rally we are seeing an italian equities up by over 2%. the finance ministers saying why would they want to pay out more for their debt if they are going to wind up barring more -- wind up borrowing more? the 10 year yield in italy down by about 11 basis points. potentialng the hurricane florence premium being priced in. david: the president up to the stakes in his trade conflict with china saying they were more tariffs coming. said, behind the $200 billion, there is another 267 billion ready to go if i want. this is a day before we learned

the u.s. deficit has reached new levels. let's take a look at how chinese imports could hit the retail sector. drage latest threat would about every single item imported from china -- you can see the red dotted line. that is the inflated threat. the blue bars are the total number of chinese imports into the u.s. you can see this is bad news for u.s. retailers. consumer goods are going to get caught up. according to the data compiled by bloomberg, some of the top customers are china and hong kong based suppliers. retailers are having to pass on increased costs to customers who just recently lord -- just recently lured back into their stores. we saw nordstrom had the best comparative sales in three

years. we saw a similar story at target. that is being reflected in their performance on the equity market. you can see the s&p 500 retail ,ndex, that is large line outperforming by a factor of five. for the last think -- the last thing these companies want is a trade headwind as they head into the crucial holiday shopping season. the tariff has not yet been applied to parol -- has not yet been applied to apparel. apple joining the ranks of companies warning about the impact of tariffs saying they're going to have to raise prices on some of their popular consumer goods like the apple watch and the air headphones. the company wrote last month there our concern is that

are going to be higher prices for u.s. consumers. through the reality of what apple is going to have to do in their pricing power. moment, what they have said is that it is going to affect headphones and the watch. relatively small in terms of revenue. maybe they're going to have to put the price of 5% and 10%. in terms of their overall revenue footprint, it is a relatively modest impact. the biggest issue is the iphone. that could be a much bigger issue for them. the --ccording to according to president trump, the solution is just to build stuff here in the u.s.. what is the reality of the situation? >> the reality is that it takes many years to set up to the scale that they have in china.

businesses only do that in a certain regulatory environment. you do not start committing billions of dollars to new facilities in countries if you think things are going to flip around. it is a possibility potentially further down the line. you're not going to see any change for now. david: thank you so much. we are joined by michael mckee. principalshah, the global investors is still with us from london. showse a chart here that overall trade flows are having a downturn since the commodity crisis of 2015. >> that is something people are worried about in terms of the global economy. if this continues, if the president ramps up sanctions and china retaliates, if he does the car sanctions he keeps threatening against canada and

europe, you could see trade flows really fall. that is bad for the overall economy. the imf warning that it could take a significant hit out of growth in 2019. david: what are we seeing in terms of global zynga has growth? growth?l synchronized ,> you see the u.s. is leading which is what you expect where the u.s. is the perpetrator. we could see a slight change in that. we expect the u.s. will start to feel some negative impact from its own trade war at some point in 2019. maybe from the inflationary side. maybe from the center -- maybe from the senses -- aix: the backdrop has been shift away from names like tech. this is netflix and google. you need to be part of the

rotation or do you buy into these kind of dips? is thathing with tech we have been here so many times where they have a depth and everyone gets -- they have a dip and everyone gets extremely concerned. it is difficult for the u.s. equity market to continue to outperform. the tech sector always seems to pick itself up after a few days. there is still some work to run in their trend. the environment is becoming more difficult. the trade war is becoming the central point to that. david: autos have gotten hit. they are starting negotiations with the european union about possible auto tariffs. deals, does that give a boost to the stocks? >> you are talking to different things. one is the economic impact. if they come out with the tariffs or if it changes any

trade policies. yes, it could be a boost to the united states in terms of some jobs. it is also going to produce a much higher cost. there is a trade-off. what you just mentioned in terms of the stocks, the psychological relief would lead to a rally. 'sen you get into seema territory. i suspect there is a negative premium on them for what could happen going forward. somebody went out and noticed today that the president tweeted over the weekend that china put a 20% tariff on cars in the u.s., two and a half percent. not a number is right because china lowered their tariffs to 15% but then put on 25% in retaliation to the presidents tariffs. 25%, so we have 27 and

a half percent. the tariff wars are already affecting car trade between the u.s. and china. alix: part of the rhetoric is that the u.s. is outperforming the rest of the world. china itself said they're going to support some of the exporters to offset the impact. do you take on more risk in the u.s.? what do you do? >> my preference is u.s. equities over international equities. improvement in valuations for the emerging market, at some point, if there is an improvement in the fundamentals, i am talking about a weakening in the u.s. dollar or an improvement in the trade story, then that is the time to the ready -- time to be ready to get back into the emerging market. david: seema shah of principal global investors. bloomberg's michael mckee right here in new york. thank you. hands overjack ma

the helm. we discussed his plans for the future. this is bloomberg. ♪

>> this is bloomberg they were. -- bloomberg daybreak. coming up, share our palm on -- cheryl palmer. this is bloomberg. president trump says that ford's decision not to import suvs from china means the vehicle can be built in the u.s.. ford says the tariffs undermines .he profitability

the company also says it has no plans to build a vehicle elsewhere. luxurytch -- a swiss vehicle maker has named a ceo. the company had abolished the ceo position a few years ago. --was considered for considered too big to one person to manage. spacex has launched a commercial satellite. it was their 16th mission this year. the satellite will expand communication services and asia, australia, and new zealand. alix: i want to get to some breaking news. chief strategy officer is leaving the company. he says i am really proud of what we achieved as a team. we were a pravin new from nearly

-- he said he was the grown-up. david: that was the theory. he was brought in to do the ipo. done.ot the ipo he got his job done. it was generally thought that he was the grown up in the room with evan spiegel. he was quite young. a lot of people on the street had reassurance about snap. alix: he is going to be starting his own tech investment firm. maybe he is going to continue that role. david: a lot of people would trust him to invest money further in tech. we are going to turn tell wall street beat where recover three things that wall street is buzzing about. the petrochemicals giant $70 billion stake sale. the sale of the stake.

your money laundering crackdown after a scandal engulfed the biggest bank. and ma hands over alibaba's home. lead -- moves over to the next chapter of his life. i love the story for saudi aramco. pushback of 2019, you can hear all the bankers go, no. now, they are like we can still make money off of this. >> when i read the story, i was like, take a deep breath. the bankers are going to be ok. maybe it will not be the same bankers making it. the other interesting point is the $70 billion deal. public where and if the investment fund will get some of the money it thought it was going to get from the ipo.

that is really important for another corner of wall street, which is the hedge fund and private equity fund, which has been actively courting. they have gone to saudi arabia for big conferences to make sure you they are there -- to make sure they are there. how much is going to be invested in things like building a new city and media and enterprise? the conference has really grand plans for the kingdom. >> this is part of the economic diversification that nbs has set forth. we will see where the money goes . we know that some of it is going to wall street bankers. the banks that you would assume. scott second-story, don -- money laundering through an estonian operation. what happened? who was asleep at the switch here?

>> i read the story and i thought, this sounds like the next story of mcmafia. it really is cinematic in its detail. what is less cinematic is that europe does not have a strong way to police this. in -- all of the talk about let's break out the euro, it is interesting that this mechanism does not exist. david: you can imagine in your mind's eye, a lot of european bankers are scurrying around and saying, do we have a problem like this? why don't they have the regulatory things in effect to police this? alix: look at standard chartered. also, barclays also had to pay fines. it is a broader issue than just one bank. >> you have to imagine that a lot of compliance officers are getting phone calls this morning.

alix: let's move on from iran and russia, let's make sure we are on estonia. the other news we want to talk about is jack ma leaving alibaba. bloomberg spoke to him about what he is doing next. soon iink someday very will go back to education. this is something i have more confidence. i think i can do much better than be alibaba's ceo. alix: i just love that. he is not going to be on 17 boards, he is going to go teach. thatat is interesting is bill gates is clearly his model. he stated that. i amde a joke and said copying bill gates, i am just getting to it earlier. david: he was a teacher. he is going back to his roots and some sense. -- in some sense. >> one of the things he said

further in the interview is that he is going to teach -- he is not going to teach english or math, he is going to teach about entrepreneurship. he is going to teach about how to be successful, how to manage through crises, and all the things he has learned. he built this from his apartment. considering china is churning out millionaires like they are turning coffee beans, that is only going to make the conversation bigger. about going to be talking like, how many billionaires is china creating? >> has pointed out in the story, he does understand the chinese consumer arguably better than anyone. david: thank you so much. you want to tune into business week on bloomberg radio daily

every day from 2:00 to 5:00 eastern time. coming up, the white house under pressure. we will get some perspective from douglas pretty. -- douglas brinkley. this is bloomberg. ♪

david: this is what i am watching. the trump presidency and where it stands in the wake of the anonymous op-ed in the new york times. vice president mike pence going on tv to say he is certain that the critical op-ed did not come from his office. >> i am 100% confident that no one on the vice president staff was involved in this anonymous editorial. i know my people. they get up every day and are dedicated just as much as i am to advancing the president's agenda and supporting everything president is doing for the people of this country. david: we welcome on the

telephone doug brinkley. great to have you on. thank you for joining us. you have written in the washington post that you find this a mind-boggling instance. can you think of a president in history that comes close to this? >> not really. there are moments like with the --tagon papers where we where how angry richard nixon got over the new york times. to have an insider in the white senior levelsast of the administration writing an anonymous op-ed is unique. it is not a good precedent we want to keep or have. it is strange times right now. things like this seems to be happening. al hunt has been in

politics for decades. he wrote that i remember the dark moods of the white house during the watergate scandal. and after the exposure of president clinton with monica lewinsky, but those were mild compared to the gloom and the trump white house -- in the trump white house were hardly anyone trusts anyone else. walk me through the scandals you have seen and white house history. -- in white house history. >> it puts a great strain on the white house. we usually rank warren harding as the most scandal plagued president. stress. up dying of getting people indicted and sent to jail during the harding years. the teapot dome scandal is famous for the area -- for that era.

after that, it is next in. -- it is nixon. the last month, he was kind of gaga. he would mutter a lot. . he started drinking gin. he would would mutter incoherent orders and people would say, yes sir. people would roll their eyes. we see some of that going on in the trump white house. the fact that the president seems to not be able to get above the daily news cycle. seems to want to throw a poison dart back at all of his enemies. when you have a million enemies, it can make you busy trying to take people down. now, he is surrounded by paranoia that somebody in our --st is dumber crossing me is doublecrossing me. it is an unhealthy situation going on in the white house. david: it certainly is amazing fodder for the cable news channels. is it really a constitutional

crisis if congress does not get involved? even though monica lewinsky matter, that became a crisis when congress took a position challenging the president. we do not have that yet, do we? >> that is absolutely true. words have started to lose a lot of their meaning. words like impeachment and treason. abuse of power. the 25th amendment. all of these are being thrown out there out of desperation for millions of americans who feel something is not right with the president. like we cannot go forward like this, like we are starting to unravel as a nation. the words have lost some of their legal meaning and have become words of frustration to say somebody stop all of the craziness happening out of the white house. alix: thank you very much for your perspective. david, you will be tackling all

of this today at 12:00 on balance of power with sort of a new format. have sit are going to downs with some really important players. one of them is going to mitch daniels. he was governor of indiana. he was a budget director, a conservative republican. -- tot to talk to them him about what is going on in the white house. alix: it will be a true intersection between politics and economics. coming up, the old tech head of research and strategy. the fed continues to want to raise rates. this is bloomberg. ♪

to china -- i am all

in. he threatens to attacks all goods imported from china. china promises to support its exporters. and all its rise for two more rate hikes this year while investors beat up on emerging market assets. and les moonves out of ebs -- cbs. the board will be revamped. the viacom merger is off the table. david: i am david westin here with alix steel. lots of news to cover. even you go from cbs not suspending les moonves but all of us out. the question is what kind of pay packets does he see on the way out. reports are a stock of the hundred million dollars are given to charity, and what is not may be subject to what happens to the investigation. inx: much more to talk about

the next hour. in the market, it feels like a risk on. india futures up by about 10. euro-dollar up a little bit. .17 ahead with the ecb meeting later on. the 2/10 bride, the tens are the one to watch wednesday. 70 5 billion dollars worth of supply from the treasury. it depends -- will china show up to the auction and in what way? crude fighting to hold onto gains repelled by hurricane florence, but trade conversations are weighing. david: timeout for the morning brief. coming up this week, the u.s. treasury auctioning $73 billion of bonds, the second largest amount since 2010. pbi data out wednesday. cbi thursday. u.s. retail sales numbers friday. thursday, rate decisions from

the bank of england and the european central bank. right now, let's turn to trade. the president upping his stakes when he said there are more tariffs coming. he said "i hate to do this, but behind that $200 billion, there is another $276 billion ready to go on short notice, if i want." joining us now on the telephone from hong kong is enda curran. sense of how the reaction is in china to this dual announcement of another to order $57 billion of tariffs, plus the record deficit. enda: by all accounts, they are gearing up for a long, drawnout trade war. we had trade numbers that showed the trade deficit -- or surplus -- are at a record. it is not coming at a great time. freeurplus is driven by

orders, people trying to get orders done before tariffs. and strong demand on the u.s. side peers signals from beijing are they are willing to fight this. they have threatened retaliation. they have increased a rebate on exporters for up to 400 goods coming to america, which is effectively a tax cut. they are digging in for the long haul. the offensive response, they can impose tariffs back on us, but on the defensive, they have to make sure their economy keeps growing. do they have enough tools to combat the effects of all of their goods being tariffed? enda: they cannot match the u.s. dollar to dollar when it comes to tariffs. there will have to look at non-tariff barriers. and the like.

that is fine, but that is not come without cost to their own domestic activity. potential government debt is relatively low, in the 40% area, despite overall debt being quite high. itscentral bank is at disposal to try to get banks lending and ensure credit is flowing to key parts of the economy. they are keeping markets broadly stable. but if they reach a point where those are not proven to be effective enough, that is where you hear more citation over will they let -- more expectation over will they let the exchange rate slide more. but i think there is a feeling of a fine line. retaliate, but they do not want to go too hard, because they do not want to damage their own economy. alix: with the options coming up in the u.s. this week, we will start hearing conversation over well -- will china actively sell

their treasuries or will they not participate actively in the auctions. what do you hear about that? enda: it is all part of a running debate -- will they use the yuan as a weapon in the trade war? will they deliberately sell their holdings of treasury? that conversation ends with the conclusion that that would be the nuclear option. if china was to stop supporting treasury auctions, that would have a cost to the securities they hold. that is why it is a managed -- a mutually beneficial arrangement in terms of how china is funding u.s. deficit. i think most people would say targeting treasuries is way down the list. alix: thank you. bloomberg's enda curran joining us from asia. joining us from miami is kathryn .ooney vera from bulltick what is interesting is the

backdrop to the global conversation. now we take a look at trade flows, there is a turn negative. walk us through the macro backdrop. kathryn: trade flows are definitely what is causing fear in the market that this point. i would say markets are pricing in the worst, especially in emerging markets. there are several headwinds that we all know what they are. they are largely already priced in. you can find attractive valuations in the emerging right now.ce it is a good place for a lot of investors, both institutional and retail, to start accumulating positions. david: there is a lot of talk about trade and all of the markets. is the issue the underlying substance of the transactions or is it the effect on sentiment? bloomberg interviewed the former head of the pboc who said it was a sentiment issue. kathryn: it is all sentiment.

emerging markets are getting smacked around because of sentiment. trade is -- fears of a trade war -- it is semantics, but do we really have one at this point? we do not see higher inflation yet. we do not see impacts on economic growth. i would contend that it is sentiment, at this point, and a lot of this trade banter has to with negotiation and working on a deal then truly the intention to bring about global trade wars. alix: however, if you look at inflation pass through, there is some worry -- apple front and center, a letter basically to the president, that there are concernscenter, a letter basicao the president, that there are concerns with tariffs that the u.s. be the hardest hit, resulting in higher prices for u.s. consumers, raising prices for things like the apple watch and air pods. how do you even factor in something like this to your overall risk he says? -- thesis?

kathryn: if we get a scenario on thehina puts tariffs majority of the most important goods that we in the u.s. consume or vice versa, if there is a trade war on the most important goods that people actually use, then we will see higher prices, undoubtedly. that is a real concern. is that the ultimate endgame? that is what the markets are trying to figure out right now. every time the market has been spooked by trade wars, it has been an opportunity to buy. at the end, what are the u.s. and china negotiating at this point? the u.s. is looking for more structural changes on the chinese side, less protection of their domestic goods, which could be even more tricky than just trying to open up to the import of u.s. cars or whatever. david: do you have a sense of when there may be a different kind of structural change? company structurally changing where they produce their goods? the president apparently wants

that to happen. he tweeted apple prices may increase because of the massive tariffs we would be imposing on china, but there is an easy solution where there would be zero tax and a tax incentive. make your products in the united states inside of china. -- instead of china. doone point -- at what point that asap to make decisions about where they do things? if they are expecting regulations to come down and stay low for a long time. but that is not the case. uncertainty does not lend itself well to long-term corporate planning. if we see in the midterms that clobbered and democrats take congress, that will change the story. in the long term what they need our assurances that regulations will stay low and taxes are coming down. i do not think that is likely to happen near-term. alix: when you are talking about

opportunities in em -- we also see tech rolling out their highs. netflix, apple, google, falling the most in 24 weeks. do you want to buy their as well -- there as well? ♪

emma: this is "bloomberg daybreak." i am emma chandra. the end of an era at alibaba. to hand outlined plans over his title as daniel zhang. ma will leave the job a year from now. nowaba's co-founder ma plans to focus on philanthropy and education. agreed to an all stock deal. provides consulting

services and a number of fields, including security, energy, and infrastructure. good news for elon musk. spacex successfully launched a satellite. the falcon nine rocket lifted off early today. it was spacex's 16th mission this year. the satellite would expand communications services in asia, australia, and new zealand. alix: was it really about elon musk or about the ceo who really runs the company? just putting that out there. -- the fed would raise rates and prep for a lot of fed speak this week. we have members discussing the economy, with rosengren saying he expects 2% gdp in the second half of the year. still with us is kathryn rooney

vera of bulltick capital markets. if you look at the trajectory the fed is sticking to, regardless of the overall macro picture globally, how do you buy em into that? kathryn: the market is already pricing in for total hikes, so to more rate hikes. last time i checked, it was still pricing a majority probability of two more right hikes. if we get one more rate hike, at fedend of the day, the president sounded dovish. 2% inflation, they are comfortable with. i do not think they would aggressively increase interest rates. i think that is largely priced in. a lot of the worst is already priced in. emerging market currencies have plummeted. you can find attractive deals right now for a long-term horizon investor. david: at the same time, mohamed el-erian is that with a piece on bloomberg today, warning he

thinks this may be a brief respite. reasons why he thinks that may be true. first of all, things like market disturbances do not get resolved easily. second, underlying problems in places like turkey and argentina have not gone away. third, you have increasing divergence in growth in external environments. and finally, structural changes. do you think things have calmed down? kathryn: sure. we should look at specific means. if we are going to generalize eem as an asset class, of course there are still headwinds. i think most of those are already priced in. we can find selectively appealing names. for example, i like argentina. took the peso above 40. i think argentina is grossly mispriced in default. you can find attractive opportunities, especially in

banking and argentina. brazil is another one. brazil has taken a real beating because it is a proxy for emerging markets. mexico, the same thing. the mexican peso is the most liquid emerging market currency. turkey has done none of their homework to they have done none of the corrective measures that argentina has. turkey withump in argentina. but if you are bearish on turkey, you shortly mexican peso. i think em dedicated investors are doing that right now. alix: you are definitely not alone in that area emerging market etf inflows for the eighth straight week, the rupee, the rupiah, in undervalued territory. walk us through that territory, like india, indonesia. how do you manage those investments? you have to allocate

appropriately. turkey, indonesia, poland, hungary, these are countries that have a lot in common with turkey. turkey is idiosyncratic in the sense of it has done nothing it needs to do. so there is no policy response that is adequate or appropriate to the crises, whereas in argentina, there has been a wholesale response in every way. i would say you need to look at a few things. the dual deficit situation but also the debt profile. so what is the debt profile? how much is local currency, how much is foreign currency? is the economy growing? what is inflation like? brazil has low inflation, record low intervention rates, policy rates. that is -- that has improved wages. so if i am right, you will get a cup sides in a name like brazil. david: let's say i should go

into argentina. how? is it debt, dollar-denominated? kathryn: argentina definitely has a deeper, more liquid bond capital market been equity, but in equities, you have adr's. so certainly that, for institutional investors. for retail, you can look at adr in the equity space. david: kathryn rooney vera of bulltick capital markets, thanks. you will be staying with us. it to hear that. coming up, les moonves out of cbs. offcbs-viacom merger is the table for now. this is bloomberg. ♪

alix: now for three company stories we are watching. first up, snap. shutters the officer

said to be leaving the company to start his own firm, but the stock price was interesting. down 2% on the news. the assumption is they were losing their grown-up in the room, but now it is down only 9/10 of 1%. i also wonder is he leaving because his job is done? david: he was clearly brought in for the ipo. on walllished rancor street. he got the ipo done. -- he did somewhat not necessarily tell me he was a short term or. but he is moving on to other things. he is a very able banker. alix: good to see what else he will do. david: i am looking at volkswagen. one analyst from stanford bernstein -- his thing is vw. vwm considering taking private, making fun of elon musk. he is saying given what has gone on with vw shares, they are

undervalued, and they should think about taking this company private. i look at the market cap. $69 billion. l went out at $25 billion. out at $.5 billion. alix: private markets are really good. you can actually do things without the pressure and transparency, in certain ways. david: and great assets. porsche and things like that. maybe it is not so far-fetched. our third story is cbs. the departure of les moonves raises a host of questions for the company. analyst,nfield, media on the phone that she has a buy rating on viacom. welcome. great to have you here. rich: thanks for having me. david: before we get to viacom, what is next for cbs? does this put cbs in play to be

an acquisition target? , what is mostf next is getting the house in order. number one, they need a real ceo, a full-time, permanent ceo. be joet think it will i think there will be a full break between old and new year the board is totally transformed as of yesterday evening. i think a new ceo and strategy is the first quarter of business. that: as you recruit for position, what are you looking for? are you looking for a great programmer or a great deal guy who can take account of what is happening and consider possible strategic alliances? rich: you're looking for someone with a strong strategic sense. les is probably one of the best programmers in the business, but

he could not -- greater scale. theoretically, cbs is in play, but one, there are no obvious buyers for cbs outside of viacom. tech companies are replacing entertainment companies, not buying them. verizon seems to have no interest in wireless. at&t already made their bet. most of the other large media companies would not be able to, because they already own a tv network. cbs would be a challenging purchase regulatory-wise. there are not a lot of obvious buyers for cbs. plus, while national amusements will consider a sale, i do not think national amusements has any desire to sell cbs. cbsmost likely scenario is

or viacom proposes to each other over the next few months and the two-month -- to companies merge. david: that takes us to viacom. you have a by rating -- buy rati ng. i am. slight that is. do you think merging with cbs would say viacom? rich: i do not think save. the whole industry has challenges. whether or not disney buys fox, that is not fix the problem. it would be great if any of these media companies were diversifying or thinking out of the box and buying companies like twitter or spotify, check buying -- heck, buying videogame companies, but doubling down on your own troubled business will not save the sector. if you think about cost savings and even balance sheet strength as you think about trying to retain contracts like the nfl,

scale is important. scale would help. more generally, there are probably more potential buyers especiallyhan cbs, when you think how undervalued and underperforming paramount has been. logical transaction the next 12 months is a merger between viacom and cbs. moonves was dead set against it. david: which got us to this point. alix: rich greenfield of btig, thanks for your time. coming up, controversy at the u.s. open. serena williams gets fined for are going for the umpire and still fighting back. this is bloomberg. ♪ ♪

alix: this is "bloomberg daybreak." week youell 1% last volatility at a two month high. now, a calmer story. to me, it is about the swedish

equity market. up 6/10 of 1%. jeffrey's upgrading the stocks to modestly bullish. despite the fact that they still do not really have a government. there are questions as to who will really be leading that had government after inconclusive elections yesterday. a rally underway with yields down 10 basis points -- it appears like the financial toister says why do we want borrow more money when we have to pay more for the money we are borrowing? euro-dollar up to 10 sub 1%, but still range bound at 1.15 to 1.17. spread.ad -- 2-10 david: more news about cbs. it appears they will pay $120 million in severance to les moonves but not directly to him. they will pay into a trust.

whether or not he gets it depends on a legal review at the end. what they are doing is they will put it in trust. he will get the money if the board ultimately finds there was no cause for the termination. alix: and rumors last week were $100 million. david: but on the terms of his deal -- he was going to make $180 million. it appears to be a contract that gives a lot of leeway to the board to find cause but a lot of leeway to les as well. $120 million in a trust. alix: wonder how long it will take to pair out. david: emma chandra is here with first word news. good morning. emma: hurricane florence is picking up in intensity as it moves closer to the u.s. atlantic coast. an area fromld hit south carolina to virginia by thursday. by then, florence could turn into a deadly category four hurricane with winds up to 156

miles per hour. the president is taking credit for what he calls a big and very positive statement from north korea. nearly half a military parade in pyongyang was devoted to the civilian economy. the president thanked kim jong-un and said things were better than before he took office. novak djokovic beat juan martin del potro to win the u.s. open. meanwhile, serena williams has been fined or rules violations during her controversial loss to naomi osaka. she is being find for verbal abuse of the umpire chair, coaching, and breaking her racket. global news 24 hours a day on air, and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm emma chandra. this is bloomberg. david: thanks. we want to stay on that story with serena williams. very controversial loss.

the question is what could it mean for the game of tennis. welcome now lee berke, ceo of lhb sports. also joining us is eben novy-williams, bloomberg sports reporter. do you have a sense of how people in the sport react? it is a total mixture there are people who feel like serena was totally in the right here there are people who see shades of gray and how she acted. the overwhelming opinion is poor naomi osaka she is -- naomi osaka. she is 20 years old. this was her first major. to have your first major on such a big stage be over clouded -- he cried at the ceremony. she was being booed. not the way you want to kick off your start. david: not least because serena williams has been her idol. of mostich is true every young female player on tour. david: whether right or wrong or

indifferent, what does it mean for the sport of tennis? will become less attractive for advertisers, viewers? lee: if anything, more. ther ratings on espn where second highest -- were the second highest in their history. there were few times i have ever watched the entire press conferences post match -- you now have a great new star in osaka. you will want to see a rematch between her and williams. surely not take this lying down. she will continue to want to perform and perform at a very high level. but i think you will see increased interest in women's tennis over the next several months and years. david: we do not want to take away from naomi osaka. this is a really gifted tennis player. lee: she has a remarkable talent. and by the way, she held herself together, very much so, during

the entire controversy, really kept her nerves in check. alix: and controversy in sport ratings.an everlasting particularly the nfl. the president tweeted nfl game ratings are way down over an already bad last year. stood probably for our flag and anthem and it is also an on broadcast, maybe ratings could come back. walk us through what we have learned from ratings so far. s, thehursday night game ratings were down 8%. but it is probably going to be the highest rated show in prime time or the week, if not sunday night football. the ratings are not out for yesterday's late as of now, but it was a strong slate and it was an amazing comeback by the packers. they came back 35 points in the second half. so it was a good artistic performance. overall, ratings are still

programming categories. and advertising sales are still very strong for nfl football. is the controversy of colin kaepernick and kneeling likely to hurt the nfl more than issues about had injuries? eben: great question. in my opinion, head injuries is a bigger problem long-term. packed into that is if the nfl will change rules. to me, the question what the nfl is can it make the game saver and make it the appealing tv program it has been? can you continue to change the rules so head injuries are a small part of the game but also keep the violent aspect that draws so many people to it? david: is this affecting the sport yet? it.e is a lot of talk about you hear parents not wanting their kids to play in high

school. is it actually affecting how many people watch the nfl? lee: ratings are down single digits -- david: but ratings are down across television. for less have eroded for sports than other categories. thursdayng war for night football, fox ended up paying 65% more than the previous package. verizon doubled what they are paying for digital rights for the nfl. so the business rights are still strong. eben: despite ratings being down, i think the nfl may be the most healthy tv property out there right now. they are not declining at the rate everyone else is. in the highest demographic, 71 of the top hundred rated shows were nfl games. 10 years ago, it was only 22 of the top 100. lee: in 2018, 7 of the top 10 shows in terms of ratings are

nfl football. there are a lot of other categories that what the problems nfl has. david: lee berke and eben novy-williams, thank you. alix: coming up, rebuilding the housing market. the first installment of life after lehman's next. institutionsncial have teetered on the edge of collapse. and some have failed. this is bloomberg. ♪ berg. ♪ >> we clearly have a crisis in our system. >> today, there is unprecedented turmoil in our capital markets. >> it is very mysterious. not sure what is happening. nobody, including me, anticipated how the problems that started in the mortgage markets would spread to our credit markets and our banking system. >> two of the leading purchasers

were fannie mae and freddie mac to because these companies were chartered by congress, many believed they were guaranteed by the federal government. >> franey may and freddie mac are so large and interwoven in our financial system that a failure of either of them would cause rate turmoil in the financial markets. here at home and around the globe. we have determined it is necessary to take action. >> we look forward to working closely with congress to resolve this financial crisis and get our economy moving again. >> our economy is in a state of crisis, but you get to keep $480 million -- i have a very basic question for you. is this fair? this is bloomberg. ♪

emma: this is "bloomberg daybreak." on balanceater today of power, mitch daniels, the former governor of indiana. this is bloomberg. ♪ david: 10 years ago this week, lehman brothers collapsed, triggering the worst financial crimes -- crisis and almost a century. we will take a look at life through the crisis. today, we look at the state of the housing market after the collapse of fannie mae and freddie mac. the then secretary of the treasury announced the government was taking over the mortgage giant. >> fannie mae and freddie mac

are so large and interwoven in our financial system that a failure of either of them would cause great turmoil in our markets at home and around the globe. today's action should accelerate stablization of the financial market. they will no longer be managed with a strategy to maximize, shareholder returns, which encouraged risk taking. we would make a grave error if we do not use this timeout to permanently address the structural issues presented by the gse's. joining us now is edward jones senior analyst -- has us is someone who whether the up-and-down's of the chairman and ceo of taylor morrison, sheryl palmer.

we try to take a look at then and now. let's look at one particular aspect, which is mortgage originations, which went down dramatically with the prices but have not really, all of the way come all ofreally the way back. will they or is this a healthier environment? >> there are two different housing markets right now. there is the market for homeowners and affluent, and then there is the rest of us. those numbers really show the disparity in housing. what we have seen is there have been more origination in government loans. government has loosened up a little bit after the pendulum underwritingtight standards, we have not seen a return of private banks, the subprime market that fueled the housing bust. is it good or bad? we have not really come to a decision as to what is the perfect home ownership rate it

right now, it is tight for some and good for others. paulson madeank the announcement, he said it was a timeout. we are 10 years later, and they are still in conservatism ship. right now, it is a necessary thing. want that oversight until a better plan can be put in place. the problem is no better plan has materialized. so we are in this stalemate now. mortgagenews is the market continues even though the future has not been decided yet. alix: that also brings me to the fact that a lot of those who own homes are not selling to buy new or homes, therefore again are buyers, first time homebuyers, cannot really get on the ground floor. how does that affect your is this? sheryl: our business at taylor

morrison is actually doing quite well. we have seen a very strong market. honestly, we find that homeowners -- customers that really have the ability to repay their loans, they absolutely can get financing today. i absolutely agree with. that may be the pendulum did swing too far a number of years ago. but today, customers can get mortgages with debt to income levels of 50% of their gross income. that is, i think, very good lending standards. david: they can get the loans. are they actually asking for the loans? to some extent, has there been a permanent scarring of people who went through that experience and are therefore more reluctant to borrow as much as they could to buy the house they want to own? sheryl: certainly. they are getting loans today.

we are seeing the across the new home industry and the resale market that sales have been very strong. if anything, it is a lack of inventory creating some of the , not necessarily only lending. when i look at some of the demographic tailwinds we have, i am variable about where we are going from here. that is across all consumer cohorts. when you look at something like the millennials, they are buying in a big way. i look at taylor morrison, and we are finding one third of our buyers are millennials. and half of them are actually buying their second home, not their first home. then if you go to the other side of the barbells, the bloomberg about ones, it is third of our business at taylor morrison, but when you look at the numbers, there are more boomers today than there were 10 years ago in households. even with the same rate, we are

still seeing higher numbers than we did five and 10 years ago. alix: we also brought up a chart that showed the different home prices and income levels. even if millennials are coming in, how affordable our homes and who are they most affordable for? nela: great question. millennial home ownership, young adult homeownership rates, is less than it was 20 years ago. while there has been a lot of improvement, we are still behind the curve when it comes to a normal mortgage market. so who is buying? we have seen people who are buying have larger down payments, better paying jobs, and very high credit scores. that market is booming for that particular cohort of people. but still, in a lot of millennials are saddled student loan debt here they are missing out on rock-bottom, dirt cheap mortgage rates. and they are seeing home prices escalating. there is not a lot of supply.

supply has not recovered to the extent of demand. so higher home prices are challenging affordability. huge demographic tailwind that will support demand. the question is do we see supply that will keep up with it? david: you said your business at taylor morrison is doing well. but what are factors that make it do better or worse? more well or less well? is the disposable income or how much people are making? sentiment or people saying i would rather spend my money somewhere else than buying a house? sheryl: i do not think so. i think the consumer feelings are good or they feel good about their jobs, they are financially more secure than they have been. about thelk demographic tailwinds and the millennials, if you were to chart this for the last 20 years, 30 years, 40 years, we would see homeownership rates really have moved about a year every few years. we are seeing millennials not purchase homes until probably

32, 33. a life change -- marriage. probably more relevant, children. that is what is enticing them into home ownership. i think the millennial tailwinds will continue to work in our ofor as a large group millennials today are just turning 30 and 31. we are also seeing another interesting trend. that is consumers are buying less than they can afford today. our we look and test basis, on a quarterly average, our consumers, our buyers, can afford something either larger or an interest rate that is 400 to 500 basis points higher than they are paying. i think it is about life choices. alix: thanks so much, sheryl palmer. annular regions and -- and nela richardson, thank you.

no doubt you will tackle this on balance of power the whole week, david. david: and whether we are safer, whether washington has helped make us safer or not. we will talk to mitch daniels, who has been in the white house and also ran the state of indiana. also with then jealous, running for governor -- also with ben jealous, running for governor of maryland. alix: and what do they see among the risk for constituents. david: and what will drive the election, november. -- come november. alix: coming up, snap loses its chief executive officer. usingn interact with us gtv . this is bloomberg. ♪

alix: here is what i am watching -- snap. the chief strategy officer announcing he will leave the company. is imran khan leaving a good sign or bad sign? >> imran khan was really the person who held up snap's advertising business, who gave them something to sell to investors in the outside world, really drive the company through the ipo. the many other officers, company is in a different place right now. they need a different kind of person to take it to the next step. imran will leave to start his own technology investment firm. that is where his experience lies. he was at credit suisse as the head of their internet sector. he will take on that kind of a role. david: so he was a driver on

advertising for snap. did he succeed? looking at his legacy? sarah: snap built up and advertising -- an advertising business, but it is not facebook's advertising business. it will always be compared to that. it is if a cult when you are a company trying to compete with these giants to build something that investors think you can build. sellingrted out just to major advertisers. now, they are doing it more in terms of automated selling that people can do on their own. it has been very tumultuous. memo to you look at his employers, he references that the job is no longer chief strategy officer but chief is this officer. it seems like they just need a new type of person in that job. sarah: absolutely. the company was determining at strategy when khan joined. now it has one, and they need someone to make it big and

steady, something investors can look at and predict from. maybe someone who has more advertising experience to bring it to the future. alix: sarah frier, thank you. great to see you on the east coast. mikeg up on "the open," schumacher, wells fargo head of global rates strategy will be joining jonathan. and markets underway with s&p futures up about 10 points as treasuries go nowhere, despite the fact you have 70 theory alien dollars -- $73 billion of supply coming online. this is bloomberg. ♪

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

coming up, china's u.s. trade surplus rising to a record. president trump threatening to tax all chinese imports. apple says proposed tariffs hit a range of products, with heightening concerns. the american economy showing few signs of strain. the fed setting the stage for hikes. future set up as follows -- positive 0.4% on the s&p 500. the fx market, a stronger euro. sentiment improving. and in the fx market, all eyes on cable in the last 60 seconds. negotiator saying getting a brexit deal is realistic in t eight weeks.o sterling up