clerks trump against the world, pushing the america first agenda. santander shakeup. andrea orcel leaves ubs. a done deal at the fed. seeomists and investors beyond. welcome to surveillance. let's check in on the markets for a mixed session in asia.

a bit of a pause in the rally for japanese equities. we see the stoxx 600 pretty much unchanged on the headline level. the 10-year yield pulling back. we are not too far from the 2018 high in may that we heard of three to -- 313. crude steady earlier. pulling back a little. up .2%.- let's take a look at daimler. the chief executive announced he will step down in 2019. we have a replacement already. down 1.6%. we have a huge lineup of heads of state. theresa may gives they keynote at the bloomberg business for him -- forum.

taylor: the u.k. prime minister. address in new york, she will say that britain will have "the lowest rate of corporation tax" making it one of the most business from economies in the world. the comments will also be aimed at her own party. theresa may gives that speech at 1:30 p.m. london time. andreaer has appointed orcel as their new ceo. robert kraft ski will are -- at ubs.lace orcel

the head of norway's chile dollar severance fund says he is concerned about the trade war between the u.s. and china. he made the comments in an exclusive interview with john mickelthwait. >> our investments are based on globalization and there are some disturbing signs. the interesting thing is to see whether there is rapture in the trend or just small trend. in the first content to best contested vote, the chancellor's top lieutenant in parliament was ousted. he was replaced by a fiscal who ran on bringing

in fresh faces. bill cosby has been sentenced to at least three years in state prison. declaredfter the judge him a sexually violent predator. he was found guilty of dragging and sexually assaulting a woman in 2004. global news 24 hours a day, on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm taylor riggs. this is bloomberg. ♪ nejra: thank you so much. president trump reasserted his america first perspective to the united nations. he offered a blunt rejection of the multilateral approach. been -- he oh

prompted open laughter. >> in less than two years, my administration has accomplished more than almost any administration in the history of our country. america's -- so true. [laughter] i didn't expect that reaction, but that's ok. [laughter] [applause] nejra: let's get more on the geopolitical order. we have our executive editor for government. mark areurgess -- and just and stephanie kelly. great to have you all with me. thank you for joining and good morning. you.n, let me start with aside from the laughter in the audience, what was the reception amongst other leaders to trump's long list of grievances?

>> the message he was delivering for two audiences. record on the u.s. economy on markets, protecting america, making america and americans great again very much targeted before the midterm elections. the other message is something he believes what he calls which is aealism, rebuttal of globalism, about 70 independence. the message -- about sovereignty independence. though you have been an ally or a partner of the u.s. for decades, you cannot count on that relationship continuing in that fashion. we have seen that already in the way he is behaving on trade when it comes to europe and japan and canada and the iran nuclear deal. nejra: what implications if any did the speech and what is happening at the yuan general some behalf are investors? >> if anything, it is probably enforced.

we have seen consistently a president trump who is willing to push the dialogue and really challenge investors ideas in the global international order. it reinforces his view that the u.s. is willing to go its own way, especially under president trump and reinforces our concerns about the u.s.-china trade relations. that therces the view u.s. will go its own way and china is the key factor that investors will see, whether it will play out, and we think it will. narrow: will we have if -- nara: will we have a for the risk -- nejra: will we see a further escalation? i don't think there were any surprises. the surprise for investors would have been a conciliatory on the iran deal.

reinforcing what we already knew. affecthow much does this how much you allocate your profile or? >> it come -- your portfolio? >> it comes to interest rates and inflation. have a lookng -- we at inflation. potentially picking up. that runs the risk of more aggressive tightening cycle than we are currently discounting. that in itself undermining the valuation architecture of markets globally, which underpins zero interest rates qe. that mean hows you allocate in europe? >> the good news for europe, clearly, the american economy is

growing quite nicely. nejra: that is good for europe? money will still flow to the u.s.? how is that good for europe? >> a number of european companies were telling us last year that the strengthening euro was a bit of a headwind. we see the euro weakening against the dollar. that is positive for european exports. the u.s. economy is clearly growing strongly at the moment. that will be a boost for all your can come at. into the less. all companies that import into the u.s.. ejra: did this split how the world deals with iran? >> if you saw trump's comments yesterday to the yuan general assembly, he did criticize iran. he said it is so in the seeds of destruction.

the world sees these two things are differently. everyone believes that north korea needs to be reined in. it is a more immediate threat to the world than iran. but the iran nuclear deal was working and iran is behaving. it is a polarization. you could see that yesterday at the yuan general assembly. we will probably see it more so try to the u.s. will circumvent sanctions against iran. nejra: thank you. stay with us. keep it here on bloomberg to we will speak with some of the top names. francine lacqua is at the business forum.

this is bloomberg. ♪

this is bloomberg surveillance. let's get the boot -- the bloomberg business flash. daimler has named their head of development, the new chief executive officer. before becoming chairman. he led the mercedes-benz maker for 12 years as ceo. nike shares fell a late trading after first order -- first

quarter earnings missed margins. north american sales outpaced expectations. featuringr closed colin kaepernick. they say it is happening a positive impact. is driving a real uptake in traffic and engagement, both socially as well as commercially. we have seen record engagement in the grand as far as the campaign. bloomberg understands the business could fetch more than $3 billion. a representative for blackstone declined to comment on thomson reuters, saying it does not comment on market rumors.

that is your bloomberg business flash. nejra: taylor riggs in new york, thank you. let's turn to the fed meeting. bank -- the central bank is expected to raise rates today. policymakers are expected to continue the policy rate hike straight through 2019. it is a more aggressive pace than fed watchers anticipated in june. the trade tensions and geopolitical risks shift the fed? you heard what the bloomberg survey said. is that in line with your thinking? >> it would be along with our thinking. we are in consensus with where u.s. rates go.

to the usstimulus economy and the cycle in the potential it has for raising inflation, some of the inflationary pressures you can see beginning to build, i think there has to be a risk that u.s. interest rates hike -- rates rise quite late cycle. sees an unusual time to fiscal stimulus. economists thought that the next recession would be triggered by the fed raising quickly.quickly -- too actual risk came from below. let's say the fed does what this consensus expects. will that successfully engineer a soft landing for the u.s. economy? >> one would hope so. i wouldn't want to live through 2007-2009. we do everything we can to ward that off. clearly, the global economy looks to be in good shape.

global governments are very indebted. one of the risks that the fed is looking at is that the stimulus is being funded by borrower u.s. money when they are already indebted. i don't think asset bubbles are forming like an 2007. there risk for a recession are just that the cycle runs its course. rates is, the fed has at a level where they can certainly again to give the economy a boost. nejra: you are predicting one hike left. why? >> this trade policy element, the fiscal policy created this fire for the economy. trump -- ordinarily, when you have this kind of trade policy, it is a temporary stimulus to inflation that

central banks would look through. said, on the demand side of risk becomesif concerns like consumer sentiment, business sentiment, that challenges this traditional of you that we are at an appropriate pace for the cycle to continue. it is the case that it will continue, but at a slower rate than we thought before. nejra: consumer confidence we had on the data yesterday, that came in strong. the see through from trade, could we see a tightening in financial conditions, perhaps through a stronger dollar that could have an effect on the fed? >> yes. there are a lot of ways. most payone that attention to the coup -- the consumer price element. it is not the case that trade policy is a one and done game. it could last in different ways. not just on the supply side, but also on the demand side.

nejra: what does this mean for u.s. equities? >> u.s. corporate's are in good shape. profits are nicely. they are buying back equity. forecast ined our u.s. earnings growth next year to above 20%. the u.s. economy and u.s. corporate's are in very good shape and spirits are high. that's all very positive. you have to counter that with the fact that u.s. equities have outperformed other equity markets this year. valuations are beginning to look quite rich. many of the sectors have led the market higher, in particular the technology sector. i think the u.s. will struggle to outperform on the world equity markets. nejra: ok. stay with us. willp.m. u.k. time, we bring you the fed rate decision with market rate reaction and a

lack -- and analysis. trying to figure out how much damage geopolitics can do to the port olio. but -- the portfolio. >> [indiscernible] we haven't really found pricing these days that attractive yet we have not invested that much for the last couple of years. >> prices getting too high and you reacting to that rather than a shift against the big cities. >> it is. we have a long-term strategy. we continue to build up our real

estate for follow. -- real estate portfolio. one particular city jumps out, london. most people will take a rough average, most people looking at the around about brexit, there is a 20% chance of a hard brexit or an uncomfortable brexit. what difference will that make for your view of london? >> our confidence is long in london. it is strong. not as a financial center, but a world capital. there is a lot of activity they goes there that is can crucial for the world economy. so we are long-term investors in the u.k. >> over the last couple of years, brexit has been an issue. if you -- have you pulled back from deals in london at all? >> still looking at attractive properties where we can find them. haven't really changed our view on investing in london. >> do you see london as a rival

to new york as being one of the great cosmopolitan punch manures or has that peaked? >> all other regions [indiscernible] to have a strong financial center. in the u.s., it is new york. europe.s it for a long-term position. >> shanghai is the commercial capital of asia in long-term? >> it could be if you look at if they want to go that way. there is strong composition in kong.with hong we have not seen the strong growth in shanghai as expected. meanwhile, the u.k. prime

minister will pledge to use low tax to make post brexit britain a powerhouse and ending the of -- and an entity of your. she will say that britain -- and an entity of europe. she will say that britain will be one of the most business friendly economies in the world. she gives that speech at 1:30 p.m. london time. stephanie, how is theresa may going to get out of this dilemma with finding a solution to the irish border? >> that is the question she might be asking herself right now. it feels as though, if anything, in may or june, we were saying there was not the messiah left. now we are here in september, beginning of october. still, we have the same issue.

the challenge she is facing, nicest from the opposition party, but the labour party saying they will not support her deal because it does not meet their second test, the idea that whatever billion get has to be as good as being an eu member. that is difficult economically to achieve. but a more interesting headline yesterday was from the european research group, a harder brexit wing from her own parliamentary party. they said that they will vote against -- if she goes ahead with it. it is not enough to satisfy european goals with this. what we are getting is this challenge whereby not only does she have opposition against her, but there european research group, 80 members of the party within parliament, saying they will vote against checkers. that is really challenging. nejra: it does feel at times that she is in attack from all sides.

what is your position on u.k. equities? or do you stay with continental europe and have a neutral stance? >> rather perversely -- and i am pessimistic about what rise it will bring to the u.k. economy the worse it gets, the weaker sterling guests -- gets. a difficult position on brexit. they are pretty unloved at the moment. equities are at record lows. valuations don't look stretched against other equity markets. the domestic sectors are pretty beaten up and find a likelihood. nejra: would the allocation increase to the u.k. from your? >> interestingly, it depends on where you have your currency exposure.

freight u.k. investor, following sterling is something you hedge against because you have the u.k. equity market. for the international investor, you have to take into consideration what will happen to the pound. given brexit, a number of our clients are looking at the u.k. equity market as a separate asset class rather than from a pan-european perspective. we can see fresh allocations. nejra: thank you so much for joining us. up next, we speak to a former ecb president jean-claude trichet. who might be next in line for his old job. this is bloomberg. ♪

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hisdent trump lauded accomplishments. the audience laughed at him. the defeat ofom, angela merkel's caucus leader was a surprise and blow to her authority. it took the depth of longing for change after almost 13 years of crisis management. our most read stories, and third-place, dunkin' donuts is operating -- opting for a shorter name. goldman partner is set to depart after 20 years. donald trump used his united to the

nations general assembly yesterday to tout his america first campaign. he offered a blunt rejection of un's approach. years, my than two administration has accomplished more than almost any administration in the history of our country. so true. didn't expect that reaction, but that is ok. the kid prime minister today -- u.k. prime minister she will say that britain will have the lowest rated corporate tax in the g20, making it one of the most business from the economies in the world.

the comments will also be aimed at eurosceptics in her own party. theresa may gives that speech today. bank --and's largest 's -- said heorway' is worried about the trade war between the u.s. and china. >> our investment is based on globalization. of course there are disturbing signs of development.

in the first contested vote -- global news, 24

hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm taylor riggs, this is bloomberg. spoke: ceo exclusively to bloomberg about where oil prices are heading. >> what is going to happen with nctions. oil prices feel high to me. overall, stock levels are low. so until the is the word now. >> what happened last time? the doyle come off of the market or not? morethink there are

pressures on iran sanctions this time. the sanctions are such now they're going to have a hard time leasing the ships in the insurance to actually move the oil. everyone is being cautious. what are the longer-term implications of this for you and the market? >> we're going to continue to plan our company. the oil prices have come back up. >> i think we have three companies -- countries out there.

the u.s., russia and saudi arabia all at about 11 million barrels a day. saudi can probably flex more than the other countries. it is truly the market working right now. >> talking about america and the opportunities right now, you guys are putting a lot of effort into projects. it seems like you are really shifting your focus to north america. what is the opportunity? >> bp was built at a some of the big mergers in the u.s. companies. finally having the confidence to make and finally having the congress to make a significant investment, we produce about 700,000 barrels a day. refining, marketing, it is an important place for us. >> could you link it? i feel it costs are coming down for deepwater.

where would you rank it? >> existing production in the gulf of mexico, those are the highest in the world for us. shell we are just getting started. we have a big shell gas business. we can take the talents and put it on liquids in the u.s.. i think that will be more and more important. that was bbc speaking exclusively to bloomberg in new york. ares cross to zurich, where very own matt miller. great to see you, matt. >> thanks very much. pleasure to be here with jean-claude, former president. we are at the ubs family office day. i thought no be interesting to start with a question on global growth, the baseline investors are thinking about.

right now, the main concern has to be trump's regime or. -- trade war. what you think about the real effects of the trade war? it is likely to continue to be significant this year and next year. it seems to me. there are many risks. having a problem in the financial sector because we have bubbles in the financial sector. the leverage and many parts of the world is also a matter to worry. of course we have the trade wars. wars that trade started with the u.s. administration. we do not know. uncertainty is terrible.

investors, entrepreneurs need to have certainty. artificial uncertainty is a bad for growth, investment. downll see slowing rapidly. i hope not, but it is clear that we are playing with the new u.s. administration a game which is dangerous. >> there is not much you can do about the u.s. president, about the path he has chosen on trade. there is something that policymakers here in europe can do if they see bubbles and financial markets. those bubbles,e and do you think that policymakers should get involved to control them? by definition, the ecb and all central banks have to take into account all that could have been.

the over leverage is obvious. we are now, in terms of public and private debt at the global level, at the level which is to what we hadr at the eve of the last crisis. indicator, and i trusted is, an indicator of issues, we have a lot of that have to be tackled by the banks. they were the only game in town. i would say governments, parliaments, the private sector, have to be fully aware of the fact that it is abnormal that we continue -- financial leverage at the global level. >> is it abnormal to see that amount of debt everywhere with

such low rates accompanying them? our financial markets complacent? know, financial markets have a tendency to act and behave on the short-term basis. it is difficult to incorporate the financial risk today with what would happen in the medium and long-term. we know that. that all ofrtant is the other partners -- thanks avoided the great depression, which could have been even worse. they did a formidable job. the problem is that the other partners have a tendency to consider that whatever they do, the central banks will take the burden of making things right, which is impossible.

i think that the central banks did all they could. they are stopping in the u.s. as now in europe. toope to more in japan withdraw. including in the nonconventional area. do not doer partners their job, we will have a lot of problems. success is starting to see vigorous inflation and a lot of investors believe that could bring forward normalization of a policy to the end of next year. do you think that is the right time table, and do you see that inflation as well? >> i would say that all decisions of the central bank on projections,

expectations. it is clear we are in a different situation than where we were before the action of the central bank. as an important signal that inflation expectations are more or less in line with stability. in the u.s., japan, the u.k.. we have the same definition of price stability. that is very good news. it confirms to me what had been already announced to the market. they will and in terms of -- securities at the end of the year. they will also start increasing rates a long time afterwards. i do not think there is any other signaling of the central bank.

it seems to me it is probably reasonable to speak to this. if it appears that they are expectationslation on the upside, it seems to me that accelerating the interest rate would be probably decided by the governing council. >> what we could see at the end , through theear summer of 2019, let me ask you about profits. you watched at the ecd twice. you became the successor to the dutch president and your successor is the italian president. his term is coming to an end. do you think we may see a german president? days -- it is a decision of the head of state and government. a very good candidate. what counts, experience.

capacity to be a leader of the .ew president we will see what happens. a number ofe are french that are able to be the next president. >> the french people? >> all nationalities. nationality should not count. the new president should be entirely devoted to the interest of 19 countries that have decided to share their income as i mentioned. >> thank you for your time. trichet.de thank you so much.

matt miller with jean-claude trichet in europe. next, we talked the future of investment banking. this is bloomberg.

nejra: economics, finance, politics. this is "bloomberg surveillance." changes at the top for some of europe's biggest banks. has replaced the ceo. the spanish lender's new boss made his reputation as a dealer

who made empires during the precrash era. noisef speculation and about what might happen from here in terms of deals, succession, etc. what changes could be realistically see? jonathan: we were thinking the next three-year plan. is,erms of where santander they are a bit light on capital, but adequate. thinking about returning to cash dividends. a lot of the retail business is flatlining because growth is the biggest problem european banks have. when be surprised if we do see turning up the gas of it for the investment bank, and also maybe some small asset management deals. nejra: so some small asset management deals. what else will investors be focused on? the shares haven't really performed well this year.

jonathan: rather than getting too carried away about the fact that he had the deal, we have to recognize where santander is in the cycle. cyclically, they are low and are only going to take up from here. for banks, it is all about cost. we know he did a good job at ubs. one thing we would expect to see is a more aggressive cost income ratio target. ubs, what mentioned position does this leave ubs in? jonathan: i don't think it really changes that much. we have seen a good recovery. if you think about the key drivers for ubs, the gross margin is very important. those are the biggest drivers of the stock market. he is holding his own, but the environment is not great.

4q not that exciting. nejra: let's hope investors agree as well. thank you so much for joining us. up next, switching gears. this is bloomberg. ♪

nejra: economics, finance, politics. this is "bloomberg surveillance." it is the end of an era for daimler. the ceo will step down next year. shares currently trading low. why are the shares lower? ikt: that is actually a big surprise. this isn't really a big sip -- this is a really big surprise appointment. they give him a bigger job in

2016, and effectively anointed him for the top job. they are trying to make this is orderly transition as they can. he takes over next year. they are not going to make him chairman straightaway. he will come back, essentially after two years and 2021 and become chairman. there are trying to make this as clean and well planned a transition as they possibly can. there is a new powerful shareholder, he will have to manage and spin all of these different plates. the key one really being, can they move from the car as we know it today into the future of

electric cars and autonomous driving. that is where he really has to make his mark. -- he will be 50 when he takes over next year. plenty of rim to run for him. nejra: thank you so much. up next, francine lacqua and tom keene continue surveillance from new york. we have a huge lineup of heads of state and government. theresa may giving a keynote at the bloomberg global business forum. this is bloomberg. ♪

francine: trump against the world. the u.s. president pushes his america's first agenda at the

u.n. santander shakeup. we speak with the swiss group's chairman. a done deal at the fed? will economy investors see a high today? good morning, everyone. tom and francine in new york this week for the global business forum. we have many heads of state who will be speaking to bloomberg. i'm looking forward to what theresa may has to say. a lot of u.k. press is saying she may say that it is all about taxes. whatever happens with exit, -- brexit, -- tom: and just as interested in what the french president will say.

it is not just a theresa may story. francine: you are right. emmanuel macron with his popularity dwindling. we will talk about a bit about tech and trade and multilateralism. tom: they call it the busiest wednesday of the year. after that, we have the fed day. michael mckee be in washington with a lot of esteemed guests. it is important to look forward to the next two meetings of the year and into 2019. francine: let's get straight to the bloomberg first word news. taylor: president trump is back at the united nations today where he will chair a security council meeting on nuclear proliferation. that is likely to give him

another opportunity to blast iran, which he did in the general assembly. the battle over syria's future has shifted to the yuan. -- un. foreign ministers from around the world meet today. funds to rebuild syria. mentioning, theresa may has a plan to make the a.k.a. post-brexit economic powerhouse. , shein new york today wants to make the u.k. one of the most business from the economies in the world. she will make those remarks this morning at the bloomberg global business forum. you can watch that here on bloomberg tv. comedian bill cosby spent his first night behind bars at a state prison near philadelphia. a judge sentenced him to 3-10

years of prison for drugging and sexually assaulting a woman in 2004. he also refused to grant crosby they'll, meaning he will -- spend timeng he will behind bars while awaiting an appeal. global news, 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. tom: thanks so much. not all that much going on. up we go, futures up six. a little bit of curve steepening over the last 72 trading hours. oil has elevated in the last three days. next screen with the vix. we look at the yield, two year yield is what matters coming off of the fed meeting and what chairman powell will write.

brent crude with an 82 print. francine: overall stocks are little bit mixed. and a lot of folks are dealing with the fed. the dollar nudging lower. treasuries gaining. a lot will play out on how the u.k. and theresa may positions herself at the global business forum today. it, thehink about concern is that she is not going to keep the promises she did 18 months ago about helping the families that don't have much in the u.k. i'm also looking at the u.s. two-year yield. wide-out a move to mr. trump the festivities of yesterday. hiscine: he reasserted .merica first years, my than two administration has accomplished more than almost any administration in the history of our country.

true.a is -- so didn't expect that reaction, but that is ok. we are now joined by the executive editor of international government for bloomberg news and the head of the u.s. and america program for chatham house. thank you both for coming on. what will this mean for the president's resolved to actually show everyone that they are wrong? >> on globalism. he handled that laughter tremendously well for donald trump who does not normally respond well to that kind of feedback. he has got his agenda. quite a dampened down speech in many ways last night. he reasserted many of the things he has been saying for a few years now. he is on a roll.

he has no intention of walking back from his various trade policies, especially with respect to china. he took on some of america's most important partners. he traveled all the way to new york city to be the anti-globalist, the u.s. president quite remarkable. we are not seeing any reversals right now. francine: do you see any other key messages apart from the protectionist america, anti-globalization? is there anything you took away from that? rosalind: very much what you are saying. just because you have been a friend of the u.s. for many decades, you cannot presume that continue.ip will he is a transactional president and he is saying we will look at every relationship on a case-by-case basis. it is interesting how trade has come up generally at this meeting. it is unusual to have it be such

a topic at the u.n. general assembly. we are seeing leaders from south africa to turkey, not just macron advocating for the global order and warning about the dangers we are seeing with the anti-globalization message coming from the u.s. the other thing that was striking was that he is very much talking to a domestic audience. he was talking about making america great again, standing up for america, americans, he was talking about the strength of the u.s. economy and the stock market. that is what elicited some of the laughter, but that was very much directed at a domestic audience ahead of the midterms. he was speaking to a local audience in new york in front of global leaders. tom: so important here. among the gathered, and particularly the body language i noticed at the u.n. lunch afterward, is mr. trump considered a one-off? do they look at this as just a trump moment and the skies here?

-- disguised here? leakedhe assembled a look at some sort of permanent here to u.s. policy? there is very much a high level of concern you are seeing that this is truly a structural change. it is not a cyclical change that we are seeing. we are seeing something much more fundamental going on. that is why you're seeing such a stronger bottle of what trump is articulating among leaders. they are concerned that what you are seeing coupled with what you would say is the rise of nationalism and parts of europe, not just in the u.s., that you are seeing political change everywhere that many parties and governments are going to have to deal with. tom: this is the heart of the matter, this phrase, globalism. give us an update on globalism.

you are the one with all the fancy parchments. what is globalism? leslie: globalism is an outlook. the president said he was against global governments and globalism, basically the basic premise that there are problems that must be solved collectively because they cross borders. that is what the united nations is about. this president does not accept that basic premise. if you look at the chicago council data that came out recently on public attitudes, americans attitude toward regional free trade agreements, toward america's internationalist position, its leadership, there has actually been a surge. the percentage of americans that want to support free trade and be engaged international, the number of americans that want to -- have all increased under this presidency. the american public is not necessarily following in-line.

it is not clear where we are headed. rosalind and leslie, thank you so much. an important guest on a sea change for europe. francine: changes at the top for some of europe's biggest banks. santander's new boss made his reputation as a dealmaker who helped build empires in the precrash era. who isurn to matt miller with the ubs chairman. matt: i want to start -- because we are here at the ubs family , i want to talk to determine about what your families and net worth individuals, your big millionaire and billionaire investors are doing.

a lot of them are shunning hedge funds and getting more into private equity because hedge funds were not returning enough and charging too much. you have to see that the have beeniness investing for some time in private equity. they are actually driving that up. rates are mobilizing for fixed income. there is a lot of money on the sidelines at the moment because of the trade dispute. card isepreneurial where many of these families are investing. there is a high proportion of alternatives in those portfolios, but hedge funds are performance related and are really trending down. they do what they know best, and that is invest in companies, either their own or others with a help the companies flourish. matt: the biggest portion of

these wealthy investors have their fortunes from manufacturing or operating businesses. you say that they are concerned about the trade wars. are they really holding money on the sidelines as a result? >> there is money on the sidelines across our whole investment space. we expect the impact of trade in the u.s. to kick in in the fourth quarter and to lead to some soft spot in the fourth quarter into the first half of next year. we don't see it in the data yet, but clearly with all of the tariffs in the pipeline, that is going to impact at least a one-off on the level of performance. there is some caution around the way forward. we are clearly seeing the biggest impact on the investment side of things, rather than really on the trade side. that money on the sideline will return as soon as there is a clear way ahead.

it is a temporary dip and we think it will last two or three quarters, not much longer. we have seen europe get hit harder on the equity side. u.s. my view is that the -- at the moment everyone is bullish about the u.s. outlook, even if there is a short-term performance issue. medium to long-term, the u.s. economy is very strong. it is growing at least in 2019 into 2020 with strong rates. the u.s. at the moment is still the most consensus rate. i think there is estimation on how dynamic asia-pacific will be. i was just in the region for two weeks and i think global markets underestimate the anti-cyclical stimulus that the chinese have put in place to really

strengthen their economy. the market is very focused on the impact of the trade dispute, but i think the chinese have reacted fast and quite decidedly with countercyclical measures. that will help the economy go along and will have a big impact on the region. i look at asia-pacific as the other growth area where the market has maybe been to pessimistic. that will come back as the u.s. gross. , what we are seeing there is a readmission of growth. matt: will china come to the table? does donald trump have the upper hand? think china has been very clear that they will not retaliate, but they will put measures in place that if the trade dispute keeps escalating, they will not just limited to the trade in goods. so far, we are talking about the trade balance. we haven't really talked about financial services or about technology. i think the chinese will want to

broaden the negotiations out from two of the goods trade into technology transfers, and also within groups, you see a lot of product and production change diversified along multinational companies, including a certain element of china in their production capacity. that will be part of the negotiations with the chinese have said this is not exports of chinese goods, these are production goods that go into the final assembly in the u.s. shouldn't really count in the same way. they will broaden into financial and other services saying we should really talk about the current account rather than just the trade balance, which i think is an argument that has merit. it means broadening the negotiations. matt: from your view as the chairman of ubs, how open a market is china? there is so much talk about free trade and multilateralism from the president and vice president

there, but it doesn't seem they are really acting on that when it comes to european and u.s. businesses going in and making money. axel: that is true. i think the international community taking a joint and coordinated approach to make it clear to china that we accept this be that which you opened up over the last 15 years when you are only 4% of the global economy. now that you are almost 20%, you're much bigger. that speed has to reflect the new emerged china in the global economy and your global role. i think the economy has been stronger. the issue is about speed because there is so much pressure, not just from the u.s. to really honor these international trade negotiations, to open up in a two-sided manner. we are seeing it in the financial service industry. visits have indicated

an opening up in china, and we were told they will be more liberal and more dynamic on quotas. ubs has 24% of the northbound trade on the hong kong shanghai equity connect market. on the southbound, it is only 2%. that means we need more quota to increase our stake. china is already open to foreign investors. work.k that is a major they need to open up for their own citizens and financial institutions to invest in the rest of the world. investment banks can be helping to make that in a stable and predictable manner. matt: you have done a great job in all of asia. in europe, you are a heavy weight as well. in the u.s., you can grow more on that side. how do you expect to do that and entice more high networth clients? family eventbal

here is already one event. that shows the target range of clients we have here, which is royalty individuals which have professional advice on their side. families have multigenerational problems. innovationm with products. many of them have millennials. they have much different forstment motives, instance, on sustainability. you have to be very innovative enough space. we work with the world bank to help private clients invest in world bank activities, which has a sustainability element but also a return element because guaranteeddebt is by all governments of the world. to start up

ventures, we need to bring them those solutions. we will give you more details on october 25 when our ceo talks about how you want to achieve our ambitious target, but it is very could that we have a strategy centered on wealth. we are number one globally and we want to push the business to be more client centric and to really deliver dynamics. matt: you are in charge of strategy as chairman and succession as well. -- asf the departure of we have been reporting on, are you concerned about secession -- succession? axel: no. andrea did a good job when he was with us. you saw that in the numbers for the first half of the year. he was a very good executive. while we do regret seeing him

based on is basically the fact that we have a very strong talent bench. we are very proud that our executives are picked to lead other banks. to evolve our talent binge. we have added two very good individuals to our client binge. they have many years in the bank. very experienced senior executives. i think they will help us to implement our business model. we have a business strategy and it works. we might have to change some people in the front line of doing the business, but they are all senior executives. very experienced. i've no doubt we can continue successfully to implement our strategy. matt: thanks so much for joining us. real pleasure to talk to you. thank you so much.

let's go now for an update on our business news. here is taylor riggs. taylor: it is the end of an era of mercedes-benz parent. replaced next year by the first non-german ever to lead daimler. he previously ran development for the company. the billionaire cofounder of salesforce.com says he could not be more excited about his latest purchase, time magazine. magazine frome meredith. >> it's amazing what time magazine represents. the opportunity to acquire the company and help be the stewards for the future, was something we could not pass up.

i help it will continue to be a positive global impact opportunity the way that it has been for the last century. taylor: that is your bloomberg business flash. tom: thank you so much. news flow today is absolutely extraordinary. it is very important to stay focused on the federal reserve. michael is with us. we will get to him later in the hour on the state of wall street, bonuses and the ability to catch up. julia, nelson schwartz goes to the heart of the matter, forget about this day, forget about the next three rate increases, there is a thing called the national debt. counting thean beans in washington, and we are

up to $900 billion in interest payments a decade from now. does chairman powell need to focus as much on where we are a decade from now as he does on this meeting? julia: chairman powell is well aware of the fiscal sustainability issues. he is a fiscal guy at heart and is been talking about this for a long time. you put your finger on it, or i guess nelson schwartz did. the debt service burden on this debt is going to rise even as interest rates stay low. we are taking on so much new debt that the cost of servicing, just paying the interest is going to go from about 1.5 of gdp to more than 3% of gdp very quickly. having these debates about whether deficits don't matter, they are going to matter even if interest rates stay low. tom: if they stay low, what does the real rate do? right now, we have rates and inflation coming up.

is a good question because high government that can and in several ways -- end in several ways, higher inflation, investors losing their faith. or you can go the japanese route where you ultimately force, you lose potential growth. you end up with lower real rates because your potential growth is declining. which way the u.s. goes -- the overarching theme of the fed is that they want to get to neutral rates as quickly as possible. is it as simple as that? julia: i wouldn't say as quickly as possible. but we are going to hear from they knowll is that there is a very temporary element from the fiscal stimulus. you weigh that against the current state of affairs, i knew just kind of move gradually toward that mutual stance. francine: what do you think michael?

look at the term premium for the tenure treasury, that spiked higher from december into february with the tax deal and spending deal. then it collapsed back down. it is very interesting to see the stability and treasury curve. obviously, what happened after last winter was that we had $30 billion-30 $5 billion of supply coming out. francine: what does dollar do from here? we have had this story the last couple of years that has been that the global economy has been outperforming the u.s. so the fed could raise interest rates without seeing the dollar strength. we still have a good amount of fiscal stimulus in the tank. i still think the dollar has room to go, especially as the

fed is very committed to raising interest rates. tom: i want to come back with michael with a terrific note on some of the realities of catch ups in the market. coming up, particularly after the presidents reception at the yuan general assembly, a good time to speak with the president of the council on foreign relations. please stay with us, worldwide. this is bloomberg. ♪

tom: good morning, everyone. "bloomberg surveillance" from our studios in new york. prime minister may faces battles in her disunited kingdom.

your first word news with taylor riggs. taylor: senate republicans are pushing ahead with a plan to confirm supreme court nominee bret kavanaugh soon after that hearing with the sexual assault accuser tomorrow. a mutual likely been weekend session and a senate vote on the nomination early next week. republicans have asked a female prosecutor from arizona to question both kavanaugh and his accuser. president trump's handshake with justin trudeau at the united nations suggests the canadian leader is still in the u.s. doghouse. trudeau approached the president at the yuan luncheon, tapped him on the shoulder, and the two shook hands. the president did not stand off. the countries are divided on a number of issues although they are closing in on a new trade deal. at thena is pushing back trump administration days after the u.s. imposed sanctions on the chinese military. beijing has refused a request for the uss wasp to make a port

call in hong kong. bwest penalize china for buying russian weapons. -- the u.s. penalize china for buying russian weapons. a manager of one of the biggest sovereign hedge funds is determining how much it would signals from the u.s. and china mower the most. >> there would be a rupture in trade potentially under the terms of the global supply chains being reconfigured. taylor: global news 24 hours a twitteron tictoc on 2700 journalists and over 120 countries. this is bloomberg. tom: what i know is the research note of the week last week for

global wall street was from wieden and company. michael purvis as usual absolutely nailing it on your need to catch up. this is the wall street interview of the day. there was one bullish factor as we turn the corner to autumn. the fourth quarter seasonal strength, the market is up huge. short andys is long many long only an global macro hedge funds are so behind that they cannot before before the third home in the hamptons. just the really a couple of paragraphs. the sweat out there is tangible and nobody owns enough apple. ownsl: no one enough apple. it's against the backdrop of low nominal gdp.

it submit a lot of pe expansion. a lot of fundamental driven people tend to not feel comfortable buying into that. here we are you today where we are up 8-9% and a lot of people are trailing the benchmarks. you look at the data going back to 1960 and a punch is well above its weight in terms of what it needs to the overall contribution. tom: how does this actually happened? on october 11, some but he goes and we are 400 basis points behind. do they pick up the phone and say by one million shares of apple? million! 2 million, 3 [laughter] investors holdof their nose. they say you know what? i've got to buy into this and i've got to stick with my favorite position, and

often its taxable performance at year-end. francine: some give away our data and some don't. is that a crucial difference? michael: that's the big theme du jour of where this whole tech story goes. you look at facebook and how it's trading. it begs a lot of questions. a lot of the tech questions that surfaced after the cambridge -- scandalre still are still pretty abstract. francine: chipmakers may have a leg up because of artificial intelligence that the components will be used no matter what the internet of things becomes. michael: sure. i stick a little more top-level and i wouldhe mdx continue to argue that the tech sector, including chip makers, that sector is going to be the

backbone of the rally for the last nine years and continue to be the backbone against the backdrop of earnings growth and economic sensitivity. it will support high valuations. tom: the world is coming to an end. we are only up 17%. %.ur the fed needs a good stock market to keep things going. julia: i think the fed would not mind a correction. they are tightening monetary policy and financial conditions are not tightening. they are much more attuned with issues of financial stability than they were in the past. it's not their job to police every asset bubble, but when they see valuations getting further and further into new territory, then they start to harder theyeart of th

come, the harder they fall. tom: is this and never market? yesterday ands on the ye new that that was wrong. this in breadth to the market. is there a real lift in this market where everyone has to catch-up? michael: the correlation of stock sectors and stocks has been very low. to your fellow guest point, no. you look it stocks making fresh highs consistently and that is trending in the right direction. not dramatically, but it's heading north. if you look at the 200 day moving average, that number is pretty healthy as well and also heading to the upper right. i think the story is reasonably good right now. francine: are we in a tech race with china? apple is dominating and so is

facebook. there are also pretty good companies in china that could dominate or will they? michael: i'm not going to get into the micros of some of the specific companies. i would say this though. alibabahina tech story, and tencent and baidu, those companies have had some fundamental weakness coming out of q2. you have seen revenues decline and the gross margins decline. it's in concert with the em weakness that we have been bat sector has been a core part of that recent em rally. to be seen how much u.s. tech companies can really participate in china and conversely how much china can participate in the u.s. or elsewhere. at the end of the day, there are two places you can find faang

tech stocks and that's the u.s. and china. francine: how does that change the way we look at the economy? we are looking at huge transformational changes, which we may not understand 100% in the way that we measure it. is it going to get worse? julia: we don't know. trade wars are the hardest thing to model as there have been so few we have been through in the past. the market is focusing much more on the tangible impacts of the tax cut in the lift that that brings rather than the more intangibles of the trade war. now that the rubber is hitting the road and there are actual terrorist taking effect, global supply chains are being a bit disrupted, i think as the next few quarter earnings reports unfolds, we are going to see how companies translate that to the bottom line. are they able to pass the tariffs along? are they able to absorb it in the margins? the company's earnings reports

are going to be where we calibrate the impact of the trade war. i don't think it's in the market at all right now. it's too esoteric and too often the future. the future is becoming today right now. francine: thank you so much. michael and julia, both stay with us. government and business leaders gather today for the bloomberg global business forum in new york. christine lagarde will participate at 9:30 a.m. in new york and 2:30 p.m. in london. you won't want to miss that. this is bloomberg. ♪

francine: this is "bloomberg surveillance." from new york, a packed week for tom and francine and the rest of our team. the head of a sovereign

wealth fund is afraid of a trade rupture. he spoke exclusively with our editor-in-chief, john micklethwait. >> we are invested in more than 74 countries now. we don't invest in norway at all. our investment is based on globalization. of course, there are some disturbing signs about the development of the big trend that has been happening for 30 years now. the interesting thing is to see whether there is a rupture or it is a small drop you >. >> have you trade your asset mix because of the trade war? >> not necessarily. >> there is in a move to rethink china with them that? >> everyone has to continuously think about china because it is the most important aspect of

globalization, the miracle of the growth of china. it's probably the most important thing of our generation. goingappens to china forward is certainly very important for the whole world economy. >> you are well known for taking a strong interest in china, going there every year. have you noticed a change recently? has this trade war affected what's going on there, particularly in the economy? >> i try to go one week every year. so far it seems like it's business as usual and we will see how it develops. >> looking around the rest of the world, do you think that the main impact of the trade war is going to be on the emerging world? where do you see things? >> it's quite possible. there will be a rupture in trade potentially. the global supply train will get reconfigured and whether that will be more like two regional

ones with one centered in the u.s. and another centered on china. as an investor, how could you seek to profit from that? give advice to people watching . >> we think that investing is all about the future. it's hard to make the future -- weedict the future so suggest an equal slice over the world. francine: we will be back with michael and julia for their perspectives. coming up on "bloomberg daybreak," the interview coming up at 7:30 a.m. in new york and 12:30 p.m. in london. this is bloomberg. ♪

taylor: this is "bloomberg surveillance." i'm taylor riggs. let's get your bloomberg business flash. online polling company surveymonkey raised aliens of dollars and an ipo. -- millions of dollars in an ipo. surveymonkey is losing money and has begun partnering with companies like salesforce, microsoft, and google. surveymonkey begins trading today on the nasdaq.

blackstone and carlyle are among those interested in buying nielsen, best known for tv ratings. the two private equity firms may submit bids for the company. nielsen has come under private pressure from elliott management. they acquired a stake in the company and is encouraging a sale. j.crew will unveil a new brand this year as part of its recovery strategy. the ceo spoke to bloomberg's emma chandra. chandra. >> we will be announcing one new brand this year. >> can you tell us anymore about the new brand? is it aimed at women are men or children? what can you tell us about this? >> it is aimed at women and its younger than any of our existing brands. taylor: j.crew is trying to bounce back after years of lackluster sales. that's your bloomberg business flash. tom: thank you so much. this is really, really cool. i know we are doing emerging

markets, but this j.crew story. when you follow fashion in england, it's a uniquely american recovery project. what's amazing is the last three years, i think they expanded internationally with four or five shops in london. i guess we will have to wait and see on how they recover. tom: maybe versaillece will buy them. francine: don't believe us, but we are following fashion quite closely. you have high-end luxury on the back of that versace sale. a volatile month for emerging markets and still with us is michael purvis and julia coronado. thank you both for joining us. when you look at the fed, should they be looking at the contagion of the emerging markets as something that could derail their hike? julia: they definitely should be keeping and i on emerging markets. so far, there is nothing that handset that broader contagion, but yes, we have seen that

contagion before and they certainly have to be aware of it. i think chair powell has explicitly stated that. yes, of course we are watching it. back to the u.s. and it happened most recently in 2016. it can be significant for the u.s. economy. so far, i don't think we are in that territory so on they go with the ray kyte -- rate hike. there is interaction between the two. francine: how do you differentiate the emerging markets? there are a lot of idiosyncratic stories. if the oil exporters and the oil importers. it structural reforms and non-structural reforms. what's the number one metric to make them different? michael: in the old day, we had the bricks. you have china and companies directly exposed to china and asia almost sort of being different than your classic yield em countries, what you can see a lot of in latin america

right now. china -- the economy is too big. , itall of its warts underscores the global growth narrative. there are many things starting to show where it's almost graduating a little bit to em status. you look at the currency weakness you have seen recently. it has not been associated with a big spike in 2015. tom: he nailed a dxy and the weakness of pacific rim currencies two years ago. when you are with bnp paribas, you are way out in front in the american slowdown and the word right now is dollarization. julia: the ones we are seeing dollar stress is the ones exposed to dollar liquidity. i think there is a direct linkage to fed tightening and fed liquidity. it was one of the catalyst back

in 2015 when the fed started rate hikes for the first time. that was one thing adding to the stress of a lot of other things. i think right now the fact that ae fed is proceeding at fairly steady clip with rate hikes is tightening up dollar liquidity globally. that tied going out reveals the weakest players. they are wrestling between these things and it will continue to be. we may be stabilizing right now, but ultimately these conditions will not get easier from here. they will continue to tighten. tom: within that is the dollar call and whatever you believe about developed countries. then there's the em country where there is assumed dollar strength. you stay with that? michael: on the dollar right now, you have to also look at the relationship between the euro, for example, and the em currencies. there's a lot of linkages. you are starting to see more economic linkages between the eurozone and china.

if i can focus on the euro for a second, you have seen some of the recent strength and the suggestion of a regime change off the nominal or real rate differentials that matter. it did not play out after macro in 2016 or a reduction of political risk in the eurozone. when you look at the italian sovereign bond spreads relative to the bund, that's been contracting. the italian issue is fading and as that has happened, you are seeing a bid for the euro. that is really playing into the euro strength and that helps the emerging markets. francine: there was a bit of confusion on the markets about inflation and a chief economist had to dial it back. -- is inflation in europe going to be a problem? michael: that seems like a long way off until is problematic.

if anything, it seems like mario draghi has forced some of that into fighting off structural disinflation factors. the whole pivot point on the ecb balance sheet and the hiking trajectory is still a little bit more abstract and tangible right now. you are starting to see the commodity rally over the last few weeks whether it's copper and oil or other metals. it may besuggest that temporary, but there is some growth pickup coming out of china and some of that could spill into the inflation narrative and the eurozone and also the u.s. tom: can we back up to first principles? let's pretend you are on the 2:00 show this afternoon. we have great guess with jeff rosenberg joining us and other worthy ones as well. let's start the 2:00 p.m. show right now. this is easy today and then it gets a lot harder for a data dependent set. what exactly does that mean?

what does data dependent mean? i have no idea. julia: what chair powell started to lay out at jackson hole is a very pragmatic approach. i think the next two to three rate hikes are pretty easy. it does not seem like there is anything to derail the recovery. we get closer to a neutral and then he is not what it to r-star. tom: it's about blood instruments like gdp or core cpi, right? julia: are we seeing job of moderate or wage growth pickup? are we seeing core inflation move above 2%? all these things are going to matter as well as financial conditions. is the market tightening up? are you starting to see more rationality come to asset prices? francine: r-star. [laughter] it's also create about the boe, but we have a much longer term . tom: thank you for joining us

this hour. we did it with michael purvis and julia coronado. us fromor joining zurich and matt miller as well. our interview of the day with ambassador haas.he will come on and sit with us and laughter will ensue. richard haass with us after important speech by the president and its reception at the united nations as well. please stay with us across all of bloomberg today. our global is this forum with important guests and francine's important financial panel. from new york, this is bloomberg. ♪

tom: this morning, interest rates higher.

,his afternoon, chairman powell ever more data dependent towards 2019. prime minister may in new york. orl she speak to the elite leave or remain britain? will oil hit $100 a barrel this hour? good afternoon. this is "bloomberg surveillance." i am tom keene. am focused ona, i your financial panel. francine: incoming chief sachs,ve of goldman creditxecutive of suisse as well. maybe blockchain? the international aspect.

what one guest has to say is timely. francine: reforms, europe, probably striking an optimistic tone. i am looking for to hearing from theresa may. she has become more defiant. the question is do you really want to cut taxes for corporations? tom: fête day, 2:00 p.m. this is a live meeting. some important perspective. a news update, taylor riggs. president trump at the 90 nations today, where he will chair a meeting on nuclear

proliferation, giving him another opportunity to blast i ran, as he did in a speech to the general assembly. the battle over syria's future has shifted to the united nations. the u.s. and russia are both seeking u.n. approval. foreign ministers meet today. russia wants to help rebuild syria. the u.s. insists there should be a political transition away from president bashar al-assad. has a plan to make the u.k. a post-brexit economic powerhouse. corporate taxes to the lowest rate in the g20 after leaving the eu, making the u.k. "one of the most business friendly economies in the world." she will make comments this morning at 8:38 a.m. here on bloomberg tv. nightosby spent his first

behind bars in a prison near philadelphia. a judge sentenced him to three prison for in drugging and sexually assaulting a woman in 2004. he will stay locked up while pursuing an appeal. 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 am taylor riggs. tom: thanks so much. equities bonds, currencies, commodities. up, curve steepening, oil elevated. .ext to screen with the vix 11.95. we will watch the two year yield at 2:00 p.m., 2.8 percent come yen elevated. francine: european stocks drifting. asian shares higher. futures in the u.s. a little higher.

markets it largely in some kind of holding pattern before the rate decision. dollars steady, treasuries weaker, but the pound after theresa may -- and on her brexit stands. , even asonds advancing the five-star movement said they may veto the budget. tom: it will be interesting. fiscal policy beginning to drift in here. the president of the u.s. spoke to the assembled at the u.n. here is the president early in his speech. less than two years, my administration has accomplished more than a must in the administration in the history of our country. america is best [laughter] so true. [laughter]

didn't expect that reaction, but that is ok. [laughter] [applause] coverage inn our washington. kevin cirilli. there are so many other secretary of but state pompeo, did he approve of that speech, right that speech, or agree with the bombast we heard early? was an unscripted moment. tom: that was unscripted? yes.: republicans saying he was just making a joke. the is a speech which president continued to criticize the nuclear arms deal. , saying they will become energy independent --

dependent on russia unless something significantly change. he did make it a point to single chancellor merkel. the reaction to the president's speech? francine: is this a play for the midterms, about tariffs and trade, or the president means it. belief that the president means it, but is targeting it for the midterms. are they wrong when they say that? the sense that long-standing u.s. policy has been opposition towards the expansion of german energy interests with regards to russia , so this is not necessarily a change in terms of u.s. policy. we saw this in the obama administration. the president, when he takes an

aggressive tone on the world stage, it has the midterms in .ind in wisconsin, michigan, ohio, and pennsylvania, that plays well. tom: greatly appreciate that domestic take on this effort. we have a guest for you this morning. the council on foreign relations , an institution that back to the adore roosevelt -- to theodore roosevelt. richard haass is the president of the council on foreign relations and has served both parties and joins us this morning. that was a speech in disarray, this is a full throated articulation of america first. leaders you should abstain first, mexico first. this is his view of the world.

tom: compare and contrast to wayne jennings bryant. hisou perceive foreign-policy is part of the republican party, part of america, or a one-off with this president? aberration or will this be the new normal? my hunt it -- hunch is it is an extreme version. it is not what is necessarily coming, but trump is tapping into something as much as he is creating something, so there is resentment come a protectionism, but he is putting it on steroids. francine: does it bring home the fact the world is flat on how to deal with iran? >> absolutely. maybe with saudi arabia and israel on one side, the europeans and others on the other. wasone area where iran meeting its international obligations was the nuclear agreement.

that was the one area where iran was complying. what they are doing around the region ought to be unacceptable. they are an imperial power. it is inconsistent with united nations resolutions. can the world be global without the u.s.? it is interesting. canada, some europeans, and others are saying while the united states is sitting it out, maybe we can become more multilateral to keep that approach alive on climate change , wto reform, the international migration compact, but they know multilateralism and global order with united states is a sad second place. need the united states

to play the role it has played for the last seven years. tom: is where we are the product of our success, that we have fed peace for so many years in america that we have forgotten what war is, what loss is? >> there is some of that. civics, teach history, or social studies very well in our schools. we are not transmitting certain aspects of art democracy. -- of our democracy. i have made aas party is teaching our schools to be globally literate. tom: when we grew up in america, we were talking about the hon gary and revolution. it was immediate post-world war ii. systeme: the education is a little american-centric. it is the same thing in europe. look at what is happening with brexit. community, that is

one the great pieces of historical statecraft, nato and the eu. people are throwing it away and taking it for granted. francine: the concern is you teach it at school and learn it at school, but don't have an emotional reaction. tom: the president of the u.s. got laughed at yesterday in front of the world community. that was outrageous. it was unscripted. thean't blame archconservative for the secretary of state, can we? >> the was a boasting moment. it's not the kind of things most leaders do when they come to the u.n., but there is a message there, the world turning us out after these statements. this is not the knighted states they thought they knew. francine: we need to come back. we will determine whether

laughter will make the president have even more resolve. coming up, goldman sachs head of research. we will ask him about opec. this is bloomberg. ♪

>> this is "bloomberg surveillance." i am taylor riggs. it is the end of an era. the mercedes-benz ceo is stepping down early. he will be replaced next year by the first non-german ever. .e is a 49 europe from sweden

-- 49-year-old from sweden. shares of nike lower in premarket trading. the company reported gross margins that missed estimates. nike posted of the numbers that beat expectations, including overall revenue and north american sales. the quarter closed before the ads featuring:. -- colin kaepernick. benioff bought time magazine and spoke to bloombergtv. >> it is amazing what time magazine represents, and the opportunity to be the stewards for the future was something we could not pass up. i hope it will continue to have positive, global impact the way andas for the last century

usher in the next century as well. >> that is your bloomberg business flash. tom: thank you. too many themes to speak of with richard haass. yesterday under the uproar over president trump's appearance at the united nations, an appearance by president had one of turkey. ambassador, there are so many elements to turkey, but the arch element is the border with syria and the scale of their migration -immigration challenge. americans forget the zeros after the number of humans involved there. >> it is one of the reasons turkey has some leverage, in particular for the european union. they don't want turkey to become a vehicle by which terrorists did in and out of the middle east. that the is the update council on foreign relations sees with winter coming on? ib thats one area of

is the focus of most of the fighters there. you have a russian-turkey deal, but it does not solve it. crackdown, a joint that will create enormous pressures. that is still more likely than not. francine: what will be the most significant shift in the next 18 months? we talk about the economy, and it is difficult to understand these take shifts, not multilateralism, but who will be the ultimate force of power and influence. is it china? has a challenge with its own economic situation. it is becoming more assertive in the region. the u.s.-led world is in nobody-led world. it is a messier world.

the fabric of international relations is fraying. are pushingwe against the trade order, the wto , what were not doing on climate and migration issues. there is no one willing and able to step in. francine: what does that mean for fractured country policies? more wild wild west? rules, no no enforcement, no sheriff, and a lot of people with guns. that is the messiest part of the world. you will have efforts to stabilize north korea. the president is overstating what has been accomplished. the biggest area of uncertainty people will and how deal with a presence throughout the region, and in syria. there is not one big thing. we will probably look back on the rise of china as the big

geopolitical challenge, but there are any number of things that can go wrong. tom: a focus on the united nations, the bloomberg global what have you learned this week and what we learn in the coming days on international relations? >> leaders are beginning to assume the u.s. will be what you and i have been talking about and they have to fill the cap, even though they can't. the chance of a nafta deal looks poor. i think optimism on nafta has taken a turn for the worse. tom: interesting. canadianss no way the can live with the mexican deal as a model. tom: ambassador, thank you so much. you will continue with us here. between me andop the plaza hotel is a good and beautiful thing. francine: is it? >> canadians eat more donuts per

capita than any other country in the world. francine: news you can use, only on bloomberg surveillance. magisterial defense -- francine: i'm going to translate for tom. he's going to do radio for the global business form. we will interview theresa may, emmanuel macron, and the president of south africa. tom: an exceptionally important conversation. roger ferguson is the operating officer of tiaa, but so much more than that. recenterguson with us in hours. this is bloomberg. ♪ this is bloomberg. ♪

francine: good morning. this is "bloomberg surveillance." i am francine lacqua in new york. tom keene kicking off our day of coverage, three heads of state in the next hours. i want to ask about the u.k. we are expecting theresa may to talk about tax cuts to make the u.k. more competitive after brexit. ,ow can she keep everyone happy corporations, labor, brexiteer s? >> she can.

she has essentially failed. she will have to decide who will get three quarters of a loaf and who is not. one of the things, the eu, particularly the french, or more worried about her setting a present -- president that others might want to emulate. she hasn't found the formula yet. francine: i know were trying to figure out whether they crash out, but does it matter for foreign relations worldwide, or is frexit a tiny thing? >> it matters the most for the future of britain. it is our closest ally and an important part of europe. it would not be the biggest thing if britain stays or leaves? no. what kind of role does the country play going forward. francine: is it a precedent for

the rest of the eurozone? a bigger danger because it goes to the heart of the eurozone construct. it is not an organized sort of thing. alongss europe continues with or without britain. radio,e: coming up on 7:00 a.m. in new york and 12:00 p.m. in london. also trade and our global business form kicking off with that keynote from theresa may. we hear from south africa and the imf. this is bloomberg. ♪ oomberg. ♪

francine: this is "bloomberg surveillance." i am francine lacqua in new york. open our coverage

from the global business form. we will talk to finance leaders and heads of state. let's check in on what is trending across the bloomberg universe. on tictoc, president trump lauded his accomplishments, saying it had achieved more than any government in history, but the audience laughed at him. , the defeat ofm chancellor merkel's candidate was a surprise. it shows the depth of longing for change after 13 years of crisis management. on the bloomberg terminal, dunkin' donuts opting for a shorter name. sheds its top investment bank job. a top goldman partner set to depart after 24 years.

you can find out more by logging on to the bloomberg terminal. here is taylor riggs. taylor: republicans pushing ahead for a plan to confirm brett kavanaugh soon after that hearing tomorrow. there is likely to be an unusual weekend session and the full senate would vote on the nomination early next week. in alicans will bring republican -- justin trudeau approached the president of united nations luncheon, tapped him on the shoulder, then the two shook hands. the president did not stand up. the countries are divided on the number of issues, although closing in on a new trade deal. days afterng back the u.s. imposed sanctions on the chinese military. beijing has refused a request for a u.s. ship to make a port

call in hong kong. last week, the u.s. penalize pressure for buying russian weapons. the biggest sovereign wealth fund is trying to figure what done todamage will be his portfolio. he is analyzing the signals from u.s. and china closer. >> of course there will be a rupture and trade potentially. longer-term, the global supply chain will get reconfigured. taylor: 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 am taylor riggs. this is bloomberg. francine: thank you. we must talk about oil. brent at $80 a barrel. opec toiling to cajole pump more, the president of the

his nation'sp strategic petroleum reserve. to talk oil pack, oil prices, richard haass, council on is with usations picked -- with us. iran will be the end-all for the moment on oil prices. what can you tell us about exports? will they be hit more than we think? >> we have the offset, the spr, but the sharp decline does far, india wants to have a good showing in terms of cutting the overall exports. the question is do they get waivers. know,ing people we now the form of sanctions this government uses on individuals,

not corporations. you can't restructure or get out of them. the only ones who can cheat on this would be teapot refineries in china that don't need access to global payment systems. going forward, you would have to be an ally like india to get a waiver. yes, you will see that sharp decline. 1.4 million barrels a day. the reason why we came out yesterday much more modest in their expectations on oil prices , what did we learn from soybeans this year? we were on soybeans in the middle of july and the administration poured water on that outlook. you have to be cautious in terms about the spr if things get tighter. francine: did the president speech make a different to opec? >> it is the rhetoric in foreign

policy that is doing what it is doing to the prices by pressuring iran and the continuing situation in venezuela. crisis, i don't think we would have oil above $80 a barrel. to pick on opec is a bit of a throwback given have the u.s. has emerged. francine: why is the market questioning the fact opec may not be able to put out extra barrels to make up for the iranian exports. >> the highest we have ever seen saudi arabia reach is 10.6 million barrels a day in 2016. it is producing 10.4. that is simple math. the neutral zone has 300,000 barrels per day of capacity, russia has 200,000 barrels a day of capacity. rig counts in saudi arabia are up 20% in the last four months.

again, i will go back to i don't care if they can or can't hear and canve the spr deliver barrel at 4.4 million barrels a day. francine: again, what does that mean for the price of brent? is it too high? >> we think it will go back into that $70 to $80 a barrel trading range. oilnt to emphasize this, still has a 10% carry on it. the s&p has had a great year. being long oil and given the carrier is a 10% return. bullish on i am not prices, i am still bullish on returns. francine: if oil were to go to that, whatu look at does it mean for the energy market? off?uch gdp doesn't shave >> if it goes to $100, it is

temporary. it affects everybody unevenly. puts importers under pressure. for exporters, happy times are here again. for emerging-market countries feeling a lot of pressure, it is one more rock on the scale, but temporary. francine: will it tops $100. how under invested are we in oil? >> there is an under investment theme playing out. by the way, it is a broader theme not isolated to oil here it copper, gold, all the commodities. cycle, weood is long have seen substantial underinvestment. we were telling the story and 1995. it did not play out until 2004. it will play out. the question is when. it's going to happen, but we are not there yet. francine: the saudis say we

could put extra barrels out there if there was demand. demand?t see the are we underestimating the china slowdown will put pressure on oil demand? >> look at their exports. the summer, they put out a lot of oil on the market. the front end of the brent collapsed and they backed off. we had too much oil in this market in august. it came back off. we have seen china re-into the market. what is the impact of the trade war? they are de-stocking copper and oil, and eventually you can do it to a physical limit. the chinese are back. that is the main reason we are it $80 a barrel. francine: on the trade war, the worst-case scenario is it

escalates. how much does it shave off gdp? how much oil demand is lost? upover three years, we come with 500,000 barrels per day, which is significant. francine: is it three years, 20 years? >> on the trade war? down ifside will break you talk u.s. and china. this president is committed to pushing this for trade reasons. the new talking about sanctions the u.s. is instituting against china, i think we are getting close to a u.s.-china cold war, and trade is a reflection of it. it is wrong to think this will be a passing phase. francine: you were saying in the three years, how much are you losing? >> 500,000 barrels a day. that is full escalation. is at least over

the near-term, we don't see a substantial impact on demand. demand growth in august is 1.8 million barrels a day. global demand is humming along. copper is the other big story. it rally tremendously on friday. it is an indication the global economy is in good health. francine: we are talking copper next. both of you stay with us. leaders gathered for the one planet summit in new york. emmanuel macron joins us for the event and will give us an exclusive interview at 4:00 p.m. in new york coming 9:00 p.m. in london. this is bloomberg. ♪

>> this is "bloomberg surveillance." i am taylor riggs. surveymonkey raised $180 million in an ipo. surveymonkey is still losing money. it has begun partnering with companies such as salesforce, microsoft, and google. it begins trading today on the nasdaq.

equity firms made it did for nielsen. j.crew will unveil a new brand as part of its recovery strategy. >> we will be announcing one new brand this year. >> can you tell us more about that brand? is it aimed at men, women, children? >> it is aimed at women. it is younger than our existing brands. to bounceis trying back after years of lackluster sales. that is your bloomberg business flash. francine: let's talk wider commodities, a decline in the price of copper. some concerns about raw materials demand. from one, we heard company that there are signs demand is rising. we will talk copper in the second. china will cut import terrace on some goods from november 1. that has an impact on everything from copper to other

commodities. we are back with richard haass, president of the council of foreign relations, and goldman sachs. how do i read copper? >> it is well off lows. friday says this market has likely turned a corner. what caused it to turn the corner? due to rising funding costs, the tariffs, the trade war, china de-stocked everything. they wanted to avoid a weaker currency and tariffs, so they drew down the inventories on raw materials to critical levels. now they are forced to reenter markets and that has created rallies. francine: what happens to china? i've heard the regulators are in charge, it's fine, to the fact that will have to focus

domestically to stimulate the economy. >> china has not come up with the magic formula. they wanted to make the big transition to domestic-led stimulus consumption away from an export economy. easier said than done. there plans to fade out state owned enterprises turned out to be plans, not reality. the biggest reason for the political crackdown is because they have not come up with an economic formula that will work. surprised by the degree of pressure the u.s. has put on them on trade. i don't think anyone can confidently say how the chinese will respond to a situation they did not predict they would be in. francine: trader copper prices, it is a dollar story. where do you see dollar going from here? >> it will not get much stronger from here. the bearish view at the beginning of the year and the end of the year is difficult to

argue right now. thingback to china, one that we did learn in terms of the weakening of the sea in why marketis the property started to weaken in china. they wanted to pop the bubble there. they responded that with easing policies. problem is the inability to move capital in and out of china , that easing created a property what they did last week's step outside of that luke and start stimulating through infrastructure spending, which is bullish on commodities and part of the reason why we are up. francine: thank you very much. coming up, plenty with the global business form.

we have heads of state talking to us. we would hear from theresa may. the fed is wise to tread into

neutral territory. in acould overdo it needless and long expansion. francine: thank you very much. you will be with us throughout the day to cover the fed. changes at the top for europe's biggest banks. has appointed a new head of investment banking. earlier matt miller spoke to the .bs chairman that was really

very dynamic. it contributed sisley to the performance of the industry. do regret seeing him fact, it is basically the we have a strong talent bench. francine: that was the ubs chairman with matt miller earlier. joining us on the phone is the founder and chief executive of a big investor in a lot of banking stocks in europe and the u.s.. thank you for joining us. attraction of an investment banker as head of a retail bank? he is a superl, ceo. he basically transformed the

business. he started at ubs when it was a troubled bank. he managed to shrink the balance sheet in half and make it sustainable. it is one of the most challenging environments. i think from the santander , you add him to the management team, it is reinforcing it. this is very important. santander is the largest bank in europe. operate across multiple locations. it is the only bank in the world that has its market share in brazil. the complexity requires more people. they had plenty of superb retail

bankers. hence, you bring someone else you'd -- else. francine: are you invested in santander? does disappointment mean they will go back to the dealmaking days? in santanderested in equity and credit. we on several hundred million dollars. is one of theder cheapest banking stocks in the world. the lowestantly, volatility in 20 years. i think what he will do is , possibly business management,sset

wealth management, and improve corporate banking. that is what he did at ubs. he didn't do any deals. he just shrank the balance sheet. like is that he steps up and it is a reinforcement of the team. personalitysee any or culture clashes? >> no. , it demonstrates in , and by the way, the started as a banker and a research analyst. saidhe ran, people

--santander, people said what are they going to do. he turned around and santander became the only bank were taxpayers made their money back. investors want to pigeonhole people, and they don't understand the best people can play important roles. much for thank you so that analogy. he is the founder and chief executive. ourty of coverage from bloomberg global business forum in new york, coming up. this is bloomberg. ♪ . this is bloomberg. ♪ this isn't just any moving day.

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priced into the market. investors wait for the 2021 projections, the word accommodative day and its debate over the neutral rate. president trump and president rouhani throw accusations against each other. president trump asked allies to isolate iran. auto angst, the latest in a string of profit warnings from top automakers. we will speak to jim hackett of ford. happy wednesday. welcome to "bloomberg daybreak." david is down the street at the plaza hotel, killer lineup out of the bloomberg global forum. >> it is a killer lineup. good to see you. we are here for the second annual bloomberg business global forum. , titansremarkable time of industry, investment, and heads of state. jim hackett is the ceo of ford in the middle of