, trump is not so happy. in 2019sees more hikes and tries to engineer a soft landing. president trump he is not happy. solomonfin and david warn of the cycle turn in 24 months as j.p. morgan says outperformance is over. italy meltdown, a budget deadline by midnight. the five-star and leaders may push for a 4.2% deficit. welcome to "bloomberg daybreak." i'm alone again in new york. david is in the windy city and chicago. david: i'm moving farther and farther away from you. i am excited to be here. we will have an event tonight from the chicago council tilray of foreign affairs. council of foreign affairs. i will also talk about the state of the world. we will talk to people from

chicago. one is the ceo of the largest utility deliver for chicago about utilities and power in the midwest. alix: i am looking forward to that. you are getting a nice view from .he sea suite -- c-suite what was that press conference? david: it was long. fed: in the markets, the yesterday, markets digesting that today. euro dollar down. a choppy fx story after the fed meeting. is stronger dollar today about italy and worries about their deficit. spread, morgan stanley says they were short the long the short in. crude up by 1%. that is a thank you very much,

rick perry. they said they will not release extra oil from the spr/ david it i interesting they will not do that despite the midterms.. this morning, a lot of economic data, including third quarter reading for u.s. gdp, durable events, weekly jobless claims. then, the big hearing for judge brett kavanaugh. that is expected to go on into the evening. selling.s., treasury $31 billion of seven-year notes. alix: we have that hearing at 10:00 a.m. and will be taking that life. stay with us for that coverage. time now for bloomberg first take. the top stories is the fed. is a basic look.

we saw that longer median run nowhere in goes 2020, and higher than the market was expecting. what did you make of yesterday? >> the market is nervous for a lot of reasons. over the last month, we started to price in a slightly less hawkish fed into 2019-2020. we saw value rotation, , healthls get a bid care sector looking better where the yield curve might become upward sloping, so there was a little disappointment. we did not have that signal from the fed. it was a moderate reaction. a lot of what the market expected came to fruition. we got the hike, but we didn't get the long-range outlook easier policy the market might have been pricing. david: might have been a more

the presidentut didn't like it. here is what he had to say. just raiseately day interest rates a little bit because we are doing so well. i am not happy about that. i would rather pay down debt or do other things, create more worried about the fact they seem to like raising interest rates. we can do other things with the money. ok, that is the president not being very happy with his appointment, mr. powell. elizabeth, we have the president saying he would rather have low interest rates. mr. powell does not agree. what is the reaction? >> this is not the first time president trump has publicly criticized the fed. he is breaking with tradition of respecting the central bank. six rate hikes since he has been president.

i was sitting with carol brown yesterday after the decision. she said what gina said to it was not a surprise. bond deals several before the end of this year and this will not have a significant impact. alix: is president trump creating a scapegoat. all of a sudden you are up for reelection. i told you. >> to be frank, they have this dual mandate of keeping unemployment low and managing the inflation outlook. we have had faster than expected growth this year, so the fed is doing what they need to do to satisfy the dual mandate. i don't know if president would like them to drop the insertio n component or not. frankly, the market was expecting an interest rate hike. i would not suggest what the fed

is doing will have a material consequence on the equity market or the economy, but you are right. may be going for it he is looking for a few excuses. next we want to get to our to story, market risk and how you handle it and when the cycle will turn. jpmorgan saying the tables are turning, stronger dollar, higher yields, and trade tariffs impacting profit growth and suffering. windup's offerin do you agree? one is the dollar rallied. as long as the dollar rallies, stocks were likely outperform. is morear rally troublesome for the rest of markets than u.s. markets. the second thing is earnings. u.s. earnings have been theerforming and justifies

performance. the expectation is for earnings to outperform over the next 24 months. you would have to have a deterioration in earnings results or an improvement elsewhere to really change the relationship. thehose two factors come dollar is more likely to potential he start to derail u.s. performance relative to the rest of the world because the dollar has broken down somewhat recently. that may create a relief allow late -- relief rally. that may continue in the longer term. that may derail performance. unless you get a deterioration in that earnings outlook relative to em, it is highly unlikely to see a massive reversal. david: the third story is italy. rome as theya in fight over that budget, 2% or 2.4% deficit level. it has had remarkable effects in the market. the yields have shot up.

at the same time, they had an auction that went just fine, thank you. the euro is not reacting that much. we are not in rome. we are in chicago. you have your own budget problems. how do markets react to this budget crisis in italy? had thelinois, we worst crisis that ended in july 2015. illinois is the worst rated u.s. state. we were at the brink of a junk rating a year ago. luckily the ratings agencies have stabilized outlook. we have $8 billion of unpaid bills. that really has an impact. we pay some of the highest penalties to borrow because there is a lot of risk if you can't have a guarantee we will have a state budget. the problems in italy, we know them far too well in chicago. alix: how to price that risk.

und sprint. b is that appropriately reflecting the risk? inwe have a long way pricing. in may, we saw spreads widen, stocks continue to melt down. are at auities tremendous discount relative to europe. our european strategy team has done some great work. at two pe, it is trading standard deviations below its average discount to the stoxx 600. you're looking at market participants pricing in a tremendous amount of risk. you would have to have a big budget meltdown, say more than 3% of gdp, to surprise forecasters at this point. considering how much risk we are

pricing in, it is hard to imagine. alix: fair point. thank you very much. good to see you. you can find all the charts on gtv on your terminal. go straight to gtv . coming up, more on the fed howsion with our guests and to price a fed rate hike going forward. this is bloomberg. ♪

>> this is "bloomberg daybreak: americas." sprint is arguing there is good reason to allow its purchase by t-mobile. it tells regulators customers

are fleeing and is on able to recover from losses. a said it would set up stronger competitor to at&t and verizon. the ceo of total sees oil hitting $100 a barrel. he tells bloomberg when the price of oil goes too high, the door is open to competitors and demand falls. operating profit fell for the 10th time in 12 quarters for h&m. investors focused on the margins that beat estimates. said it would not require more markdowns in the fourth quarter. that is the bloomberg business flash. the federal reserve made its third rate yesterday of the year as chairman powell takes an optimistic view on the u.s. economy. here is what he had to say. >> our economy is strong.

growth is running at a healthy clip. unemployment is low. these are good signs. readers of the fomc statements likely noted it dropped the sentence that the policy remains accommodative. it means policy is proceeding in line with our expectations. david: welcome now the head of g10 rate strategy at bnp paribas , and the chief investment strategist for charles schwab. was there anything that surprised you in this? >> not really. inrybody expected the drop the accommodative language. it was ironic that chairman powell opted to use that word in the beginning of the press conference as he was talking broadly about financial conditions, but also addressed the rationale for dropping that. it is the normal thing you do this point in the cycle, especially with the real funds

rate finally back in positive territory. all in all, it was the right message in terms of what they did, but also from powell during the press conference. morgan stanley was talking about the curve and what is priced in. near-term the market is below the dots. long-term, markets still optimistic. how do you view that? >> look, the reaction was interesting. you saw a pronounced flattening of the treasury curve despite upward drift in the next couple of years from the fed, with the market clearly reacting to the accommodation coming out. markettion, i think the is position for higher term yields. people were short during the summer with tens quickly moving down. the reaction is telling. the trend for us remains a

continued flattening of the yield curve. this may become more painful for the federal reserve with the dovish elements, things like risk of recession or inversion. david: i wonder whether regardless of what the fed does, are we going to have an advanced telegraphing of what we do? powell said we don't have the same understanding than in the past. we will not give you as much information. not because it has changed, but we don't know. been calling them the federal open mouth committee. speakers will continue to be out there. certainly the press and other pundits will pick at every word they say and in for something from that. gap're still is a yawning between the fed path, the dots

plot, and the market. ofthe first couple of years the tightening cycle, the market was right. i think the opposite is the case. maybe there has to be a convergence in both directions, but the market near-term has start moving up relative to the path the fed laid out. the path is closer to write looking into 2019 and what the market expects right now. david: there is always another part to the currency cross. talk about the euro versus the dollar. do expect strength in the euro for weakening? >> we think the euro strengthens from a low starting point. the ecb is unwinding or tapering qe. that should support the euro longer-term. mario draghi has been extremely

hawkish in recent days about the prospect of core inflation in the eurozone heading to 1.5% by the end of the year. i think the ecb and the market is coming along to that, suggesting upside for the euro. i don't think it is the beginning of a dollar weakness trend. the fed is still hiking, even if it takes out accommodative, we think it will be flexible and nimble going ford. the dollar on the expensive side, the euro on the cheap side, reflecting policy differentials as the european region catches up. as usual, you would expect the euro to strengthen overtime. on that, in if you want up looking at their forecast for 2021, super scattered for sure. >> as it should be. nobody knows what will happen. alix: a few wanted to cut rates. the ecb might be ramping up fall

steam normalizing policy and the fed might be cutting. >> a view by some that you might cutting and 2021 reflects a decent likelihood we have a recession. stopped its have hiking cycle and have moved into a cutting cycle. asthat view was expressed early as next year, i would say there is something odd with where these dots are falling. 2021 is 2.5 years from now, and to not expect a recession between now and then come even though the runway is still reasonably long, i think that far down the road is a stretch. alix: which leads us into the end of the cycle, which we will be discussing next. bnp paribas and charles watson's with us. many players like david solomon see -- we will break that down next. this is bloomberg. ♪ ♪

alix: the biggest voices in business warning of a turn in the market cycle. here is what they had to say at the global business forum yesterday in new york. >> we probably have another 18-24 months minimum in this cycle on the back of the adrenaline rush from trump's policies. chances of something happening in the next 12 months, low.nths, not zero, but 15%, 20%. as you get out to 24 months, the chances go up materially. >> the market is pricing in a little more risk. our our guest. is when do you see it and how do you rotate? >> i don't know. there are a lot of markers. some markers tell you the end of the cycle could be closer.

of thosey, one indicators is the surge in consumer confidence, which had extremes which one could argue are there. maybe we go to further extremes. it tends to happen in the immediate before hand of a recession. leading indicators a year and a half ago took out there prior high, the longest stretch with a leading indicators did not get back to the prior high. in the past, you were between two and eight years away from the next recession. i think eight is a stretch, but we studio have runway. i would focus on those. david solomon made the point about animal spirits and the surgeon optimism we saw. that will be the test in the near term, particularly as it relates to tariffs and trade. implications that has further strengthen the

economy? when i think about the risks to shortening this, that would be paramount among men. are looking clues for a turnaround, will fx markets give us those clues? we should probably be looking at rates. the dollar in particular can benefit when the u.s. is doing well and the global economy is turning. it can be a mixed signal. and equitytes markets have been remarkably optimistic through summer. the fed's mention of risks in the july-august minutes sent assets, fueled a rally, accommodationh taken out that the fed is probably more interested in growth than it is worried about inflation. that means the cycle probably continues longer as real rates have turned positive, but probably remain low.

the key thing is risks. the core scenario for most people, including the fed, is the u.s. and the global economy is ok and continues to do so, but should we have these risks, emerging markets, etc., or trade war intensifies, that could become systemic. then perhaps this fulfilling process he of a recession can happen. alix: how do you position? >> we did go more defensive within the sector allocation. we are still overweight u.s. large-cap equities relative to the rest of the world, but within that we came close to neutralizing our second recommendations. reits toutilities and neutral. that reflected a shift within an otherwise positive view on large-cap u.s. equities relative to the rest of the world here it

we have been reinforcing the benefit of rebalancing. of them as u.s. outties, not selling ai right, go back to tried-and-true disciplines and now is an important time to adapt them in the way you approach your portfolio. alix: thank you very much. making the nation's infrastructure reliable, resilient, and secure. we will talk energy security with one of the largest electric utilities in this country next. this after david solomon as cyber as to what keeps him up at night. this is bloomberg. ♪ this is bloomberg. ♪ this isn't just any moving day.

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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. toid: welcome back "bloomberg daybreak." westin and chicago. alix steel is in new york. i am out here because we have an event tonight with the council

on global affairs. and i will get some private time with hank paulson while here. meantime, we're ahead of one of the largest utility companies in the ceo toomed, with talk about his business. alix: deep dish pizza, you owe me. david: maybe i will take some to hank paulson. you go.ere s&p futures pretty much going nowhere after choppy trade yesterday after the fed's announcement here at european stocks a little bit weaker. but it is all about italian banks, off almost by 3%. italian bonds getting hit. by five basis points but off the highs of the session. questions about the italian budget and if it will meet the deadline by midnight tonight. euro-dollar reflecting some of that pessimism even though there

was a surprise pop in saxony. the curve here, 22 basis points. crude up almost a full one percentage point. it is said that $100 actually might happen. now let's get an update for what is making headlines outside the business world. emma: the showdown on capitol hill with a lifetime appointment to the supreme court at stake. a woman accusing brett kavanaugh of sexually assaulting her decades ago will be testifying. ashamed say she was too and afraid to come forward for palm now. kavanaugh -- before now. testify -- brett kavanaugh will also testify. and budget allegations for last-minute demand for extra spending from a popular coalition deputy prime minister who wants a budget deficit that is higher than the one backed by

their finance minister. they say there is no point being a government if you cannot deliver on promises. in france, emmanuel macron is tying agreements with the peace treaty -- climate treaty. he spoke in new york. america leaving the paris agreement, i could not accept. >> you would not do a trade deal with america because they have's not signed? >> a broad trade deal. emma: a spokeswoman for canada's prime minister, justin trudeau, denies he requested a meeting with president trump on the trade dispute. the president says he has rejected a one-on-one meeting. 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 am emma chandra. alix: thank you.

world leaders pulled no punches this week, pushing back on president trump on trade. says, why can't we all get along? the wto lowered its trade world forecast, now at the point i percent, for this year. -- now at 3.9%. critical for the countries to work through their differences and find restraint. joining me now is liz ann sonders of charles schwab. how worried are you and your clients? i thinkf the things many investors do not understand is although there is a long game here, the end game is fairer trade and lower tariffs across the board without damage to global trade, but putting america in a better position. i am surprised that a lot of people do not realize that when you talk about tariffs on chinese goods -- i thought this was simple and put it on twitter a week ago -- keep

in mind, american companies importing goods from china are the ones paying the tariffs. do not pay attention to the headlines a saying china is paying is more and tariffs now than ever before. the companies pay the tariffs. this week, walmart said they would have to raise prices. cpiso what happened with after the washing machine tariffs. so it does have implications for prices in the short term. it is a tax on corporations in the short-term. maybe a year or two from now we and say it is all worth it that the economy could stomach a short-term problem. my concern is it goes beyond companies mentioning it as a cause of concern but it starts to hold capital spending, dampen confidence, and that starts to bring soft data back down to the weaker hard data. and you have an inflation problem that forces the fed to have to become a little bit tighter than they know they would, and that represents a shorter-term risk that i do not

think is being fully digested. alix: i like that you bring that up because i feel there is not a true and clear answer. the tariffs are inflationary and deflationary. 101, yes, tariffs are deflationary. that there is an indication that will not be the case. >> i do not see how are they have historically been inflationary. aluminum, x u.s., for example. you look at the past, certainly if you go into a full on trade war, tariffs have generally caused an increase in prices and decrease in economic growth. you will always find pockets where there are some beneficiaries that offset some of those on the losing end of the spectrum. in an general, especially economy like ours that is a must

70% german by consumer spending and the fact that we spend more on imported goods than we do on domestically produced goods, so that is the other dichotomy that i do not think is getting a lot of attention. all for tax cuts and stimulus, but the fact it came later in the cycle is an issue. it has stimulated consumers mending, part of the rizzoli have seen this consumer spending, which is part of the reason we are seeing this trade deficit right now. when we do spend more on consumer goods, you are not going to turn that on a dime. my concern is you have this fiscal stimulus improving consumer spending, which is leading to a wider trade deficit, but the trade deficit is being used as a yardstick to measure the success of tariffs or whether we should do more of them. fishes thing with the circular nature, and that is another thing we do not hear people talking about, squaring those things together. alix: liz ann sonders and

charles schwab, thank you. it reminds me of eating your cake and getting it, too. david? besides trade, there is another risk weighing on the mind of ceo's, and that is cybersecurity. this is what we heard yesterday from david solomon, goldman sachs ceo. >> i have spent a lot of time thinking about the exec could really go wrong. the number one thing that i think could go wrong and cause problems is cyber. david: we welcome joe dominguez, ceo of a company known as comed, the largest electric utility in illinois, powering more than 4 million residential and business customers right here in chicago. good to have you here. i want to talk about your business come but start with cyber. there is a real risk with cyber when it comes to the power grid. that justot a risk

began yesterday. it has evolved over the years. we have invested millions of dollars in systems and people to retail these risks -- to repel these risks. we work with other industry players and law enforcement to get ahead of these things, but bad actors continue to evolve their capabilities. david: we have not had a serious attack that has succeeded against a power grid. we have heard remarkable numbers about the attempts. is it something we do not need to worry about? >> it is never going to be something we do not have to worry about. it will be top of mind of every ceo. but i do think we have alarms around it presently. it really comes into play repellingetailing -- pr the attacks and then being able to recover. your: as he sit-down at

desks every day and look at your risks, where does cyber rank? what else are you concerned about? >> ciber is at the top of the list the cousin of the applications of a successful attack. the other thing we worry about of the same things that are opportunities for our business, gride develop a two-way that accommodates more renewables as we deal with climate change. ast will be an evolution, well. david: where are we on that two-way grid? solarcannot store and use and wind, it will not be very good. >> we are improving every day on that. we want to depend less on fossil fuels and use renewables more. storage will be introduced into the system. we need to improve the smartness of the system to handle the two-way power flows. we have a good eye on the technology that will allow us to

do that. david: 4 million customers roughly here in chicago? andmany of those are coming saying, ok, i have this great solar or wind thing and i want that source of energy put back into the grid? how many people could do that? could do it.ybody we really have a relatively small number of customers that could do it now. it will open the door for more solar adopters, the jobs. thed: take us through revenues and costs and what it means to your bottom line as you go into that two-way grid. bottom line, a lot of folks think we make more money by selling more electricity, and therefore more solar comes on the system, the less revenues we make. in revenue, we get paid for the wires in the business regardless of the volume. david: is it a cost-plus basis with regulation? >> yes.

david: so it is really neutral to you? >> yes, we need to prove to regulators that we need to make the system investments, and went approved, we get a return on them. david: what is the emphasis to move? do the regulators say you need to? >> the impetus comes from our customers. where the largest energy company across the board. climate changeve is a real issue for america and for their communities. they want to be a leading player in adopting the sting ologies. david: what about the overall growth rate here in chicago? how is the economy growing? >> what we're seeing is a slow growth, but we have very effective energy efficiency programs that allow us to give our customers the tools to reduce energy consumption. we are seeing something that is flat to 1% in terms of consumption. you are right, the economy is doing very well.

david: when do we get to a world where we live on a two-way grid? >> i think in about a decade. i think we will be able to take the steps necessary in the next handful of years to accommodate a lot more solar on the system, talking about 10% of the power in a relatively short amount of time. looking out over the verizon, trying to get to 2050 with 100% clean energy. there will be challenges and things we need to start doing right away. david: that is joe dominguez, comed ceo. alix: great interview. do not forget to watch agitprop" later on -- do not forget to watch "commodities edge" later today. bigill be talking about a oil company and how they be climate change. coming up, it is not about history or domestic interest, the french president says he would welcome back the u.k. to

the eu if voters change their minds on brexit. more on that next. this is bloomberg. ♪

emma: this is "bloomberg daybreak." next hour, thee former minneapolis fed president, gary stern. this is bloomberg. now to your bloomberg business flash. almost every analyst who covers amazon has it as a buy, but no one is more bullish than stifle. it has raised the target price $2525, the highest on wall street, a 28% increase from where amazon shares trade now.

amazon is higher in premarket trading. eddie lampert's hedge fund has a new plan for cutting sears debt. ceo and has swapped debt for notes they convert equity. the hedge fund could recoup more than $1 billion under the plan. cadillac has had enough of the big city. the general motors luxury brand is returning to michigan four years after moving to new york to become a cosmopolitan. the new headquarters will be in a detroit suburb across the street from the gm technical center. beillac says staff needs to close into engineers because the brand plans to launch a new vehicle every six months. that is your bloomberg business flash. alix: thank you. michigan, i knew it. now to wall street beat. tpg plays it safe. the co-founder says they are still in the market but turning cautious.

then, the french president says the u.k. is welcome to stay in the eu if voters change their minds. and the kavanaugh hearing, all eyes on washington today as the supreme court nominee and his sexual assault accuser testify in a senate hearing. joining us is jason kelly, bloomberg's new york bureau chief. did not know about that cadillac story to her jason, you got an exclusive interview with the cofounder of tpg. what did you learn? jason: it was interesting to see him on the sidelines of this particular event. one of the things we talk about, like, why a guy like you? you have this great life at why do you come to new york during the worst week to be in new york? he talks about meeting with world leaders, but i had to ask how he is feeling about the markets. >> i have learned with investors, watch what they do, not what they say. we are about one dollar into the markets for every one dollar

we're taking up, essentially growing a little bit but much less than the public equity markets. a bit on the caution side, not buying beta, but we are finding unique opportunities for alpha. alix: what did he mean by that? jason: he made that comment about beta versus alpha. basically, they are not going to make any money just by buying the market at this point. look, that is not with the get paid to do anyway. they get paid to find interesting deals that are off the beaten path. this is a firm that was forged in the bankruptcy of hot mental -- thes back in the 1990 bankruptcy of continental airlines back in the 1990's they like mrs. situations. cautious at the moment but looking for opportunities maybe of the world gets trickier. firmood news for a form --

like tpg is they can sort of hold their fire, but it is interesting. alix: emmanuel macron was k., welly like, sure, u., would welcome you back. >> i did regret it for the rest of europe and for our special relationship for france and the u.k. so for sure. -- justgenocide quiet that attitude there, kind of funny. jason: almost comically french. like, we were talking about history. this is not about economics because there was a good point made that paris could be a especially as bankers say they would rather live in paris than frank for. so that would be cool if i have to leave london.

but they really would like the u.k. back in europe. david: seriously. this is about history, not just about commerce. that is what he said. there is a report today that europe is starting to get serious about if there is not a deal and there is the ultimate hard brexit and how to handle it. jason: right, and one of the interesting moments yesterday betweennversation theresa may and someone else, and at the end, someone in the audience said, what if there is no deal? i just made a big investment over in london, so how worried should i be? he did not get a very clear answer from theresa may on that, but it was an interesting indication as to where the minds of the dealmakers are. david: the third story is a tough one for us here. it is the kavanaugh hearings. at's be honest, typically

confirmation hearing is not that important for wall street. but everyone on wall street will be spending all day watching these hearings. jason: it is going to grind to a perspective of, as you say, the things we look at, the people we talked to everyday, we look at what people are reading on the bloomberg terminal, and this is almost all they are reading about. i think volume is going to be dramatically down based solely on the fact that this will get everybody's attention. alix: and we will be carrying it live. apparently, a tavern will have $15 bottomless mimosa in d.c. there is that, too. on businessch jason week and on bloomberg radio. weid: coming up, something almost missed, the drama that is argentina. we will be talking about that next and what i am watching. ♪

david: welcome back to "bloomberg daybreak." i am david west in -- i am david westin out in chicago. i'm watching argentina. the imf has increased its credit lines over three years in what is being called a record bailout. the's the currency since august 30 two romantic -- dramatic rate rise. the peso has not been trading it, so we do not know what this will do. but they have lost the central banker over this. alix: they basically through the central bank under the bus and ran it over four times. they said your money grow space has to be zero until june 2019.

there is limited ability for them to have any fx intervention. maybe if there is an extreme movement and peso, perhaps. they have taken away a lot of the toolbox. what about growth? $57 billion, thanks very much, but you have got to growth. david: they're shifting the way they will control the central bank. it will just focus on money supply. so zero growth. and driving over with the bus, it was personal, too. there was criticism over the outgoing central banker who left. so it got kind of personal. can insulate here with emerging markets, but it is having an effect on u.s. companies. phillip morris cut its full-year because of the currency prices in argentina and turkey. dichotomy ofe argentina and turkey.

argentina says we will not have any growth at all and will be tough. turkey is saying we're doing just fine and will keep growing. it is not clear yet that argentina is getting a break from it. alix: we will be watching this story. coming up, key takeaways from meeting withtember gary stern. in the markets, a little bit of movement in the equity markets, now unchanged on the dow. bank all about the italian being off by our 2.5% as the markets they just budget deficit that might not make its midnight deadline. this is bloomberg. ♪

alix: the fed hikes, and president trump is not happy. they tried to engineer a soft landing. president trump says he is not happy about that. and italy's budget meltdown, the clock ticking. by midnight tonight, leaders may push for a 2.4% deficit. wtf cuts its trade growth forecast and says it is critical for governments to work through their differences and show restraint. welcome to "bloomberg daybreak." 27.sday, september i'm alix steel in new york. david westin is on assignment in chicago. david: i wonder who they were talking to. trump was not playing nice? i'm not sure. i am in chicago for the council on global affairs. i will have an interview with hank paulson to talk about what

is happening and also about china and climate. meantime, christie hefner ran playboy enterprises for some time, and we will talk about what is going on an entertainment and the media industry. alix: we're looking forward to that. media is the topic to talk about. a look at the markets. the dow pretty much flat. s&p futures up by two. euro-dollar down .2%. in had stronger inflation saxony, but the italian budget crisis is being felt. in the u.s., not a lot of music -- movement. 1%.e up by the secretary of energy saying they will not release extra oil from the fpr despite higher oil prices. 5,on't know, come november will that be a different conversation? potentially. david: exactly, midterms are

looming. time for the morning brief. data thist economic morning, including a third reading of u.s. gdp, durable goods, weekly jobless claims, and wholesale inventories. judgepreme court nominee kavanaugh and dr. christine blasey ford will testify. it is expected to go well into the evening. at one :00, the u.s. treasury will sell off $31 billion of seven-year notes. alix: thank you. talking about kavanaugh. at 10:00 a.m., we will show the hearing live. meantime, federal reserve hiking rates for third time this year. ir having an optimistic view. economy is strong. growth is running at a healthy clip. unemployment is low. all of these are good signs. leaders from the fomc statement likely noted that this stance of monetary policy remains

accommodative. alix: joining us now are gary stern, former minneapolis fed president, and michelle meyer, bank of america merrill lynch head of u.s. economics. gary, where would your dot be? >> it depends on which variable you want to get to, but i look at the committee's dots, and there was nothing surprising. secondly, i do not disagree with the general path of they have laid out. i might be a little more optimistic about growth going based on judgment about productivity doing a little bit better. -- knows themwn it can reason to depart from the outlook they presented. it looks like a relatively high probability of achieving that. , seems like you agree. but the question is longer-term, the 1.8% growth rate in 2021.

what does that tell you? >> i thought that was at risk of the digitally edging higher, considering the long run dot did move up. a little more encouragement by prospects for hiring and higher growth. i think there is a prospect that it will slowly move up, but it is a slow-moving target. you do not adjust your forecast to the long-term quickly. it happens over time. since the crisis, the forecast for long-term growth has been edging down slowly. it could reverse modestly, but it will take some time. it will not be a dramatic change in view. david: it is interesting, the discussion about accommodative, and then saying we are not the precise about it. it fits what was said at jackson hole, the stars are not where they are. are they getting more ambiguous or is this a different approach

from chairman powell, who does not like to be precise? has worked hard over decades out to become more transparent, and i do not think that has changed. i do think it is fair that if uncertainty about the potential of the economy has diminished and you are more uncertain, you should reflect that. i think that is what is going on. tohink it is a fair summary say that the fed is still working hard to explain both current policy and the outlook. but to the extent that they are more uncertain about potential, about how rapidly the rent -- labor force might be able to grow, how rapidly productivity may or may not grow, i think they have to reflect that in their commentary. david: michelle, if that is right, where is the source of uncertainty? is it because wages are not going up as high, because allen's sheets are coming off -- balance sheets are coming off?

>> i think they do not necessarily know where the end goal is or the end rate is. being able to model towards an equilibrium break, it is a nice chair powell is saying we do not really know what the targets are, so why will be keller rate policy specifically to that? we do not want to make that there in the markets and say once we get to neutral, we have to stop. they are saying that we're going to evolve as financial conditions move, and we're going to calibrate as we see what those targets might be. alix: it also felt like it was the perfect scenario soft landing. is that a realistic thing? training liquidity, a nice soft landing, and liquidity run 2%. 2021, you say0,

that we will not know what is happening. the economy could look very different. basically, they say that we think we will return to something study, some sort of equilibrium, and that is still right around 2% or little bit above and the unemployment rate coming down. to me, their same growth is strong right now and there's momentum into next year. that is reflected in the numbers. as for 2020, we do not really know. david: so president trump clearly wants a soft landing, softer than what we are seeing now. here is what he said yesterday about the powell rate hike. president trump: unfortunately, they raised rates a little bit because we are doing so well. i am not happy about that because i know it will be a question. i would rather pay down debt or do other things, create more jobs. so i am worried about the fact that they seem to like raising

interest rates. we can do other things with the money. david: when we hear something like that, it is critical for the fed to be independent, but is it totally irrelevant to the fed with the political branches think? you cannot tell the fed what to do, but should they be listening to him a little bit and considering what he has to say? >> two things about that. do not think fed officials would be surprised by that kind of reaction from this president are probably any president. they are free to comment on policy, and the fed is there in part to take those kinds of barbs in any event. the fed has to do what it believes is the best interest of economic performance over time. that you are right that the fed cannot and does not make policy in isolation. there has to be public support for the policies that the fed implements.

frankly, quarter-point increases in interest rates over time, the gradual way the fed has been doing it, i do not think there has been much public concern about those interest-rate increases. i doubt there will be very much concern going forward, assuming that the economy performs reasonably well over time. economic performance deteriorates or inflation accelerates materially or something like that develops, than the economic performance deteriorates or public's concers going to increase and pressure on the fed may increase appropriately. but right now, things are moving nicely. the fed expects some criticism when rates go up. of course, the fed got criticism when rates were very low from retirees and those complaining that rates were too low, making it difficult for them to flourish on a month by month basis. this is all par for the course,

in my judgment. alix: the fed punching bag, basically. gary stern, former minneapolis fled -- fed president, michelle meyer, merrill lynch. both are staying with us. italy up, uncertainty in to meet their midnight budget deadline. this is bloomberg. ♪

emma: this is "bloomberg daybreak." i am emma chandra with your bloomberg business flash. almost every analyst who covers amazon has it as a buy.

stifle has made the target price the highest on wall street, a 20 pro -- 20% increase to where amazon sure string now. amazon is higher in premarket trading. cvs,.5 billion merger with selling its medicare prescription drug business to welker health plans. their investment may help resolve objections to the aetna- cvs deal with regulators. goodgument that there is a reason to allow a purchase by t-mobile. regulators customers are fleeing and it is unable to cover from crippling losses. sprint said along the takeover would set a strong competitor to at&t and verizon. david: the clock is ticking for italy, which has until midnight tonight to reach a budget plan for 2019. this is the deputy prime

minister, who just said the government and is and should remain united on budget decisions. the uncertainty is weighing on the italian 10-year. gary stern, for minneapolis fed president, and melt -- michelle meyer of bank of america merrill lynch, are with us. talk about the drama being played out here. the political sides as we have to spend more money. the ecb says you cannot have deficits that big. how bad would it be if they went to 2.4% as a deficit? >> i say 2.4% is manageable in an economic sense. in a political sense, that is the issue. the problem transcends italy. if you think about the fiscal inicies in which countries europe, particularly southern europe, have engaged in in recent years, they have been in conflict with those of the

northern countries and the objectors of the central bank. while that is manageable on a short-term basis, it is not herbal on a long-term basis. there have -- it is not manageable on a long-term basis. europe will struggle with that for quite some time. alix: how does the risk get priced in? come inside the bloomberg terminal. this spreads as 239 basis points, but going back five years, it is pretty close. 2012 though, not at those kind of levels. when you are mario draghi and looking at something like this, a world of potential central-bank convergence, how do you make that argument? >> i think you look at the risk factors, and there is a sign of concern in italy. that has made people more cautious in terms of the ecb being able to deliver rate hikes by the end of next year. they have to look at the bigger picture and think about overall, the euro area, how close they

are to meeting the targets, where there is room for inflation and growth, and where they are in the business cycle. the fed is much further along in their hiking cycle. presumably, the ecb should be following suit, but there is risk of further delay. this, in the midst of all the italian government when out today with a new auction of bonds and had no trouble at all -- they were way oversubscribed -- what is that telling us? investors still want to buy these bonds, apparently. in the crisis and post crisis, signs of distress in an economy and you think no one will want to touch the assets, and then there is demand for it. we have seen this play out in the past. we have seen debt crises get resolved. there is different opportunity for yield. it is not surprising given that

it is many years of debt crises, particularly in the euro area, and they seem to come into crisis and then get resolved with opportunities. alix: people like 3% on the 10-year. why not? when you look at financials in banks, how stable are the banks in italy and in europe as compared to the u.s.? what is an underlying conversation? >> the first point to make is that the u.s. banks overall are in reasonably good shape bring now, certainly considerably better shape than they were prior to the 2007, 2000 and crisis. i think europe has made progress, but there, the progress has been achieved more slowly. andink their exposures still more dangerous. and i think there is reason to because is about a number of the european banks. the performance of some of them have not been very good.

world, toa risk free state the obvious. it is a burden to bear that in mind, and it is important for creditors and investors to pay are makinghen they bets. alix: great to get your perspective. gary start -- gary stern, to what. michelle meyer will be sticking with us. david: coming up, one of the reasons i am in chicago is i get to sit down with christie hefner. there are changes in the board and the culture, and she's involved in many of those with women coming in. we are talking about business and the board room, next. this is bloomberg. ♪

david: welcome back to "bloomberg daybreak."

i am david westin out in chicago today. christie hefner is here are chu used to run playboy enterprises as chairman and ceo -- christie hefner is here. she used to run playboy enterprises as chairman and ceo. good to have you back. start with a business you know very well, media. you were running "playboy" and helped take it to a media business it we are seeing so much change in the media world right now. >> your point about transformation is exactly right. we think, what business are we end, and say we do not want to be in the railroad business, we want to be in the transportation business. we want to create a style of content across platforms. i remember back over a decade magazine conference and using it as a theme, magazine's:

brands and taking it be on the pages. what is happening is a shift from an ad focus model to a consumer focused model. i bothf people you and know, particularly in the newspaper and magazine business, it was all about how to create business advertising, and we and are charged for the product. that became a problem, even before the disruption of the internet, and now it is something those organizations are trying to dig themselves out of. david: what does that transformation mean for scope and scale? click a disney did you cannot get big enough. comcast trying to get bigger. is there room for more niche players? >> i think there is room for local players. take the news business, a business you know far better than i, but what i see working with media companies is there is no less interesting, arguably, demand for quality local journalism.

the times we live in are promoting a higher level of engagement around public matters and what our government is doing. so the question is, what is the business model and a declining trend world for delivering that? every pup you are all in -- david: you have been active in the role of women in the workplace in the board room. today, we had the judge kavanaugh hearings. i do not know if they're connected or not, whether #metoo is connected. what do you make of that? >> i think we are very connected. sexual harassment and the into representation of women in the position of power are puzzling. one of the most effective things we can do, whether it is in a political arena or a board room, is to get to equal representation. we know that that is linked to both better performance and also better governance. i am encourage the people from blackrock to iss i say that

diversity and representation of women is something we're concerned about in terms of evaluating investments. david: you have been talking about this for a long time. are you seeing actual concrete progress in the number of women on boards? >> we did see, for the first time, a significant increase in the percentage of women who filled open board seats last year. i am becoming an advocate for average board tenure. sinnott limited by individuals. -- so not limited by individuals. wheree seen situations they do want and us companies do not want to lose people in five years or 10 years. average tenure, and it is to get fresh thinking. go back to what we're talking about, transforming businesses

here that comes from fresh and divers thinking. david: when you hook up the world of women and the need for just for to be good because you do to do well. >> it is absolutely both spirit survey after survey have shown strong correlation between representation of women and companies. of public it is also surprising, all the research shows that if you have people who are all like-minded in the room, you will not get the most creative thinking. forget just media companies, all companies are being disrupted. all companies have a thing like technology companies. if you do not have a dynamic in which you are getting diversity of thinking in the sea suite and the board room, you are more than likely not to actually be able to convene. david: is there any company doing particularly well in this area? >> i have worked with women corporate directors, and we do

visionary work every year. i think there are a number of companies doing well. there are ones you would expect then thereeauty, but are industries he would not expect like boeing or alaska air. david: really good to see you. christie hefner, former playboy enterprises chairman and ceo. alix: we talk about term limits for congress, but board limits? brilliant. coming up, a trade war against u.s. agriculture. sonny perdue will be joining us next. given by farmers by the government, are they enough to offset less chinese buying? this is bloomberg. ♪ xfinity mobile is a new wireless network

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included with your internet. plus, get $300 back when you buy a new smartphone. xfinity mobile. it's simple. easy. awesome. click, call or visit a store today. alix: you talk, david, go. welcome to "bloomberg daybreak." problems withthe

being in chicago, you do not get the cues. i am in chicago. alix steel is in new york running the show. i will be talking to hank paulson later. alix: we will all week of before that. we have breaking data coming out. durable goods, a preliminary read for august, coming in at 4.5%, way above expectations and light years away from the read we saw in july. if you take out things like transportation, the rice is a little bit softer, just up by about .1%. shocker, jobless claims still around that 49-year low. wholesale inventories and retail inventories building a little bit. that is probably a trade distortion because you want to be building before tariffs going to affect. a final refer gdp for the second quarter, third read, coming in line with what we thought, 4.2%.

those durable goods numbers blowing it out of the park. david: that is what i was going to say, 4.5%, and the survey was 2%. what does that tell us about investment? that is fascinating, a shocker. alix: but business agreement orders ashley show the first to klein in five months, -- first decline in five months, so it feels like a lot of the jump was due to transportation. onset is michelle meyer of bank of america merrill lynch. why do you think of that number? a transportation story. if you look at the guts of the onlyt, -.5%, shipments .1%. it was actually soft when you look of the underlying details and what it means for business investment and equipment. take out that noise in the headline number and transportation. largely airlines. the guts are there.

one .5%.h, on a month-to-month basis, you get these moves. generally speaking, the trend for business investment has been pretty robust. i think we are still fine here. when you look at the gdp number for q2, 4.2%, business investment strong. too worried.et it is important to remember that the headline number is a little bit of a misleading indicator. david: either explain or goodsate on the durable order, and usage has protection -- is that likely a timing issue? >> for transportation, the headline number is a must always noise because part of it has to do with boeing orders, a very big component. that is why we look past the headline and focus on the core capital goods order, the proxy for business investment. even in that you get a lot of noise. .5% tos something like

.7% month on month gains. alix: we saw inventories for wholesale and retail rise more than expected and sequentially. is that the trade conversation? for inventories, i think that will be a fascinating story. q2 inventories were very lean. that sets the stage for restocking into q3 and q4. a lot of companies will want to get their inventories in and imports before you have further increases on tariffs. i think you could see a big rig up and inventories before the end of the year as a result of companies trying to time when they get their goods in for puppies tariffs. -- before these tariffs. alix: michelle meyer, thank you. wholesale inventories month on month up .8%. retail inventories up .7%. durable orders backing out transportation, just up

modestly. dollar index around the highs of the session. staying focused on trade, one area in the crosshairs is agriculture. news conference yesterday, president trump said farmers will continue to thrive despite the tariffs. president trump: the farmers will do great. they had farmers, and these guys are amazing. i love them. and they voted for me, and they left me. ceo says her gilt is worried about the long-term impact of tariffs -- the cargill ceo. >> maybe if it were fixed quickly, it might go back to the way it was. long-term, i am concerned it will have a detrimental effect on the u.s. ag economy. alix: sonny perdue is the man caught in the middle, the u.s. secretary of agriculture. thank you for being here. >> glad to join you. ceo washat the cargill

saying is this will have long-term effects for china changing its supply change in him will not be a quick fix it would do you say? >> all of us hope it is not mantra because the detrimental effects will accumulate over time. but hopefully not. i think our producers are so productive. they are lower-cost producers are that will carry the weight in the long end. china may replace some of that. brazil will increase acres. it is like a drought it when will it rain? we wanted to be over as soon as possible and restore our markets. david: mr. secretary, i want to make sure i understand. you're not suggesting we could have this trade dispute with china go on for years and years without hurting farmers because of low costs? right, forexactly years and years, that is why we have to define what long-term is. obviously, we want all the markets we can, but it is up to china to trade fair. that is the problem and what

president trump has been getting at in the beginning to farmers. they understand that unfair trade practices have gone up. david: we hear that from farmers and manufacturers, they want fair trade, but at some point when months turn into years, it has a longer-term effect. you said it is up to china, but what if they just tough it out? ande will go other places feet other hungry people around the world. we're trying to get markets everywhere, the and a pacific region, as well as other things. discussions are starting with japan again, eu. hopefully we can get our nafta deal restored. they're looking for markets elsewhere. we probably made a mistake in becoming too dependent on china for our markets there, and we need to spread those out. alix: pharmasset spec now to use 44 cents a bushel on this year's crop -- farmers expect now to

lose 44 cents a bushel on this years crop. >> there will be another tranche. the money president trump committed, it will be less than $5 billion in the initial tranche. i would that will resolve some of the trade disputes and encourage our customers to come to the table and negotiate. there will be another tranche. alix: with the $20 billion? >> $12 billion. alix: in addition to the $12 billion or after the $5 billion? >> after the 5 billion dollars, there will be another tranche, the potential of $12 billion. this is a 2018 deal, not committing anything in 2019. it is to help farmers the of the farm again. david: we heard from the president about south korea, a deal benefiting farmers. can you quantify that? >> yes, from a stability

standpoint and anxiety standpoint. it has been a great market for american agriculture for years. it was disrupted to some degree. we are happy to have it back. but we are a great beef market and live stop -- livestock market. canada and mexico are substantial export markets, actually but china for most farmers. where are we on nafta. it appears we are getting close and then it seems to go away again. is ins discussion canada's hands. canada, mexico, and china are the top three. it varies from year to year based on the rise of soybeans whether china is number one or canada and mexico. challenging.en they have had free range in our

markets but have not receiver it it with our producers going into their markets. david: as i listen to you with the spec to china and canada, you say it is in their hands, suggesting it is not in our hands. last anot want this to long time. it is not good for the farmers are that how long are you prepared to let it last? is it something you should prepare for the possibility of it going on for years? >> i would not think soap global trade is important to all of us, very important to canada and our u.s. producers, as well as china. china has a growing economy. they are trying to move people out of the poverty into the middle class in china. doing a good job there. we produce what they like and what they want. they love you as products, and i do not think they could stay out of the u.s. market for years. they replace the soybeans from brazil, but they have too many

things of the world wants from here. we will find other markets, but i think china will be back. i do not have any idea if it will be years. again,ouching on nafta what is the disadvantage of a mexico-only deal for the ag community? >> it is called nafta because it is a north american free trade agreement. we should be trading with our neighbors to the north and to the south. it has worked well for agriculture. u.s. send jobs out of the going into mexico for many fracturing, and the president had to take that into consideration. but we would love to have a north american restorative we have a great boundary, a safe boundary. canada has been an ally. we are friends, neighbors, and relatives, so we want to trade with them. logistically, it makes sense. we can deliver product or more cheaper than to the far east. alix: i have a question from a viewer.

farmers are complaining that immigration policies are blocking work to harvest, so they're having a hard time finding workers. what are you saying? a hugelutely labor is issue, one of the top three issues we hear about. trade, labor, and regulation. the president wants a legal, stable workforce we have a bill and the house it has not been voted on. i think it is a fair agriculture labor bill. the president wants a legal, stable agriculture workforce. he knows that the producers need the labor to harvest crops. alix: sonny perdue, thank you very much. do not forget to watch "commodities edge" at one :00 p.m. eastern time. we will talk more about crops and soybeans caught in the cross hairs between china and the u.s. david: looking forward to that. now an update on what is making headlines outside the business world.

emma: a showdown on capitol hill with the lifetime appointment to the supreme court at stake. a woman accusing brett kavanaugh of sexually assaulting her decades ago will testify before the senate judiciary committee. christine blasey ford will say she was too ashamed benefit of the forward before now. kavanaugh will deny any wrongdoing. two new accusers have come forward this week. china has a message for president trump, stop the slander. theing is not happy after president accuses the for trying to interfere in the november elections. he said chinese are meddling because of the trade policies. memberse government calls it slander. and a last-minute demand for extra spending from a coalition to be prime minister. they want a budget deficit that is higher than the one backed by finance minister g8 not -- the finance minister.

they say the government should remain united on the budget. it will not compromise on providing a guaranteed income. 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 am emma chandra. this is bloomberg. alix: coming up, the next installment of our climate series and we will look at how the u.s. backs up with europe on dealing with the climate risks and we will talk to the european commission's energy chief. and disappointing durable goods. retail inventories higher. a little higher here, except for italian banks, continuing to get hit. yields and the dollar around the highs of the session. this is bloomberg. ♪

emma: this is "bloomberg daybreak." coming up later today, full coverage of the kavanaugh hearings in washington starting at 10:00 a.m. eastern time. this week's climate week in new york. alix: we are taking a closer look at climate change. today we will be looking at policy initiatives spear tomorrow, the effects of climate issues on investing. climate policy in the u.s. and europe is quite different. joining us is colleen regan, a bloomberg senior analyst. outline the u.s. versus europe, what is similar and what is different. >> from a basic level, we can think about the u.s. as primarily state-level action on climate change versus in the eu where we see member state action and eu-wide action promoting investment in renewable energy

technologies on a member state level, as well. u.s., action coming out of california. have carbontates pricing in place. this has nothing to do with federal policy. hastrump administration rolled back a lot of the obama administration action on climate. that which one will work, is the question. david: a long way to go. we're joined now by the person who oversees energy policy in the european union. maros sefcovic, european commission vice president overseeing energy and cochair of the global, net and mayors for hasate and energy, which something to do with our own michael bloomberg. maros, thank you for joining us. the secretary-general said we are way in on long-term plans under paris to get to join the 50. i think 19 countries have come up with a plan that -- i am

sorry, nine countries out of 190. where are we? we're glad about the progress in europe. it was described will that in europe, we're trying to do a collective effort. we're the first major economy which already has the paris commitment in laws. we expect that all our member states will reach the target by 2020. expect to reduce the greenhouse gas emissions by more than 40%, more than we committed to. than 30%ll have more of energy in our system from renewables. european-wide european-wide

basis, but we also motivated our member states to have their own strategies on how to get there. and the situation, it is not enough to do with the public sector only. we have to make much progress, having more electric cars on the roads. we have to make sure that agriculture is done in a more sustainable way. we are investing a lot and smart building because we know what kind of potential that can bring to the energy savings and greenhouse gas emissions. david: take us through the economics. a consulting group can up with a study that said a country like dormany can pay for and better than pay for some of the to cutnge attempts emissions, but there is a substantial upfront investment. is that what you see, and who will make that upfront investment? >> we paid quite a lot for being a pioneer, especially in germany. it has to do major upfront

investment. we're number one in wind power production. we're investing an enormous amount of money in smart grids. if you have renewable energy, it is great but intermittent, so we have to learn about how to channel it in all directions and how to store it. we have emphasis on developing new ways. for cars, for our industry, and for our homes. improving infrastructure, too, so we have special plan for that in europe. for the next european budget, we allocated more than 300 billion money for climate regulated projects. we're clear that we want to continue to be number one donor and partner for africa and neighboring countries. we know that if you want to make

sure that you change the reality on the ground, you have to help them get a sick electricity prewitt we often forget that 1.4 billion people do not have access to electricity. they cannot do it in our form, so we have to help them with smarter grids and renewables. 44 billion euros into african neighborhoods in the next few years. u.s. we talk about the versus europe, but there is also the company initiative. and centeris front on the oil and glass climate initiative where chevron and others just joined. we put our shoulders together in started working together, recording it, and developing technologies. we know it is important. natural gas has a really important role in climate change and transitioning, combining it with renewables and other things. satellites, drums, technology, infrared, all coming together.

and now three big u.s. companies have joined. alix: sounds great. methane -- tackling it. is that enough to move the needle as far as you're concerned? >> we need all levels.we appreciated the summit because it shows we need global action. here, we need all the efforts together, state level, level of the cities, and the mayors all over the world are our best allies because they are the first to tackle air pollution, the mobility issue, housing problems. , of course we need the corporate leaders who are so forward-looking and know they need to contribute to climate change. europe, you have a group of business leaders, mayors, politicians, and

activists, and it is quite unique. it shows we all have to do it together and go on the right direction. alix: but is it enough? when you look at the omissions coming out of china, is what you do in the eu and the u.s. going to be enough as linus china is in there and unable to switch to any kind of alternative energy? >> we are currently finalizing all preparations for the globalnce to assess efforts since signing the paris agreement. i am sure the conclusion will be we need to do more. plessy different, comparing the situation between now and in the the decision of the white house to leave the paris agreement, we have mobilizations on all levels and have started the process. i am a strong believer in private sector activities.in

europe, we have proven you can cut emissions by 24%. you can grow i almost 60%. at the same time, we created millions of jobs in renewables. i think we can prove there is a business sense and this decision and that it will be the combination of responsible for the planet am a initiative, and doing the right thing. david: maros sefcovic, european commission vice president. thank you. alix, what are you watching? alix: i'm watching the kavanaugh hearings. they kick off at 10:00 a.m. it is fascinating and will be but, a political issue, markets literally probably will not trade as everyone will be watching it. it is also the end of the quarter tomorrow, so there is not a lot of movement. david: it is interesting that they brought in a woman prosecutor to do a lot of the wastioning, which i thought

very smart, particularly on the republican senators' part. she has a lot of experience in sex crimes investigations. alix: and the showdowns are starting. there are apparently protests already outside of the supreme court. you can see it picking up steam. the hearing starts in about one hour. you can hear them chanting. edgier point of view, but i think the one institution that loses is the supreme court or they do not come out of this well. alix: the politicization of it. no matter what, you are some sort of judge, so how do you move on? it will not be an easy confirmation, even if kavanaugh gets sidelined. david: as they are having these hearings today, women keep thumbing forward -- do not know if it is true or not, but there are more and more claims that are disturbing.

alix: we will be taking that hearing at 10:00 a.m. coming up, the open with jon ferro. investment a you can office will be joining him. david, i missed you, but you will be in chicago and get tomorrow. you will be speaking with hank paulson later. durable goods orders backing out transportation missed estimates. a build in other inventories. as a pc futures up. asset classes, doll and yields around the highs of the session. this is bloomberg. ♪

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>> coming up, president trump not happy with fed chair jay powell's latest interest-rate hike. and it's diane budget negotiations running into a last-minute hurdle. the markets about 30 minutes away from the opening bell in new york city, futures are ok here with up five at s&p 500, euro-dollar down to 1.1674. after yesterday's rally, we give up salman treasuries. some onve up treasuries. the federal reserve hiking rates for another time and wall street is weighing in. >> things are great, right now, they are booming. >>