♪ >> trade tensions, verbal blows showing neither country appears to be giving ground. no brexit breakup. theresa may says there is no alternative with a report that seven conservatives are challenging her leadership. president trump says the u.s. will issue a report on the killing of jamal khashoggi by tuesday. and, benjamin netanyahu fights to save his tottering government . crucialw why on a

meeting today with the coalition ally. ♪ yousef: 8:00 a.m. across the emirates. is bloomberg "daybreak: middle east." a lot of hope being penned on potential progress in u.s.-china trade relations. this is how markets looked. the hedge funds are betting that opec will struggle to reverse the recent plunge and prices. we will get more later in the program. the s&p 500, a little upside. debate emerging whether it is a blip or sustained recalibration

peered bloomberg dollar index the other major highlight. example of how sentiment shifted and there was more openness and investment into riskier assets. some notes from fed officials. dollar-rand strengthening from the rand. we have a decision later in the week. let's check in on first word headlines. sevenstart off with conservatives including boris johnson, david davis are actively preparing campaigns to challenge theresa may's premiership. that is according to the sunday times. it last weeko lower as uncertainty about britain's political future gripped markets. president trump says the u.s. on thesue a full report

killing of jamal khashoggi by tuesday, following media accounts the cia concluded the saudi crown prince ordered the assassination. trump night the agency made a judgment, saying it has not assessed anything yet. president trump has visited california, where he has seen the ravages of the deadly andfire that has killed 71 potentially 1000 missing. the president is stressing common ground on how to approach the problem, marking a change to his tone previously. >> you see what has happened here. nobody would have ever thought this could happen. the federal government is behind you. we are all behind each other. we can truly say that. we have been speaking. we have now gotten to know each other. we will all work together and do a real job.

this is very sad to see. yousef: sources say telecom name a formert to merrill lynch banker as its new ceo after the previous ceo was ousted by allies of an activist shareholder. the 10 directors who are backed by elliott management agreed on the new ceo during a conference call yesterday. returned after a trumpl judge ordered the administration to immediately return his press credentials. the white house said it would do r --timbe temporarily" well a lawsuit continues. >> journalist need to know that in this country that their first amendment rights of freedom of the press are sacred and protected in our constitution. throughout all of this, i was

confident and felt this would be the result at the end of the day , that our rights would be protected to continue to cover our government and hold our leaders accountable. yousef: let's talk about u.s. vice president mike pence, trading sharper barbs with xi summit, showing neither country appears to be giving ground in the trade war. the chinese leader says the world is facing a choice between cooperative nation -- cooperation or confrontation. >> mankind has reached a crossroads. which direction should we choose? confrontation? openness or closing one store? the interest of all countries and the future of mankind hinges on the choices we make. mike penceents later

took the stage and said the u.s. would not change course until china changes its ways. >> the united states offers a better option. we don't drown our partners in debt, course or compromise your independence. the u.s. deals openly, fairly. when you partner with us, we partner with you. we all prosper. yousef: joining us now on the line is the head of fixed income -- there is a lot o at stake for all investors. if you notice the swings around the sentiment, depending on trade tensions, the latest back-and-forth between the u.s. and china, where does that place you in terms of potential progress at the summit coming up. >> good morning.

that is an interesting question. had conflicting messages from the u.s. administration on the trade dispute with china last week. is, the tradehis tensions are far from being sold. this is a medium-term story with much wider implications than the commercial and balances between the two economies. are theamental reasons growth of china, not only as an economic power, but a political and military power. for example, if you look at the purchasing power of the chinese economy. it has grown from being a third in 1997 to in size

become larger than the u.s. is unlikelyhe u.s. to accept this change, not only on the economic front, but also the political front. i think that going forward we will see these tensions remain in the market. the marketect sentiment, investor sentiment. yousef: absolutely. >> we have to discuss about this for a long time still. yousef: china's holdings of u.s. treasuries fell to a one-year low as it takes steps to stabilize the yuan. i know you have a conviction call around adding duration exposure. run us through your thinking here in light of global markets. >> that was a call we made when

pricing already three rate hikes from the fed in 2019 on top of the hike we expect in december. wasntially the market already pricing in a worst case in a real -- worst-case scenario. chairman,ts from the who last week was much more , has forced the market to reach price expectations to two next year, and probably the fed will stop in the second quarter of next year and become more data dependent. pricing moret is in line with our expectations.

our long-duration call remains. now treasuries are becoming interesting in terms of edging -- hedging rather than interest rate expectations. with increased volatility in the equity market, treasuries once again become the best and all the way to hedge other risks in the portfolio, from the equity to the credit side. so we remained positive on the treasury. barbelling the portfolio using treasuries and tort dated u.s. yield outperform the market going forward. yousef: hold that thought. we still have a lot to talk about. let's see a snapshot of what is coming up. the latest impacts of the jamal khashoggi case on stocks as trump denies any conclusion

about the crown prince's role. what does it mean for the pound and for global markets with the current situation in the u.k.? this is bloomberg. ♪

yousef: let's get to our other top story, the u.k.. challengersvative to theresa may's premiership, according to the sunday times. the prime minister has sent there is no alternative on the table to her brexit deal. lowerund ended the week as uncertainty groups markets. the ceo of the imperative always in. -- bnp paribas weighs in. >> i think we don't know. nobody knows. the british don't know.

the only solution is to work on options. be ready to serve the kleins whatever happens and to be strong and resilient. -- the clients whatever happens and to be strong and resilient. yousef: a lot of investors are looking with some hope that there would be certainty, but instead the market got additional uncertainty. are they going to find a way through parliament? announcement last week of between the u.k. and the eu was taken as good domestiche market, but opposition is mounting. , in our view, the

deal is the best possible u.k. couldthe expect. it is hard to imagine they could improve the current deal. but itar from perfect, is probably the closest economic relationship the u.k. can achieve. that are 90% probability the parliament will reject the deal, at least initially. dealntinue to think a no will be avoided at the last minute by either a standing article 50 or the deal passing a second parliamentary vote, but pressure on u.k.

assets between now and then. is an analysis suggesting a no-deal breaks could cost gdp in 5% to 8% of u.k. the long-term, so there is a strong incentive for the government and parliament to reach some kind of agreement. we still believe the base case scenario will see a deal at the end. yousef: let me just jump in here. i want to flush that point you made out a little bit more in terms of the cable tray. at clients can pull this up gyv . .- gtv the pound could plunge to 1.20.

where do you stand? where do you see that trade going in your base case? pound is notw, the pricing in brexit. saw after level we the referendum in 2016. brexit, the hard market will test again that level. it is not our best case scenario. we think some sort of agreement will be found and we will see a recovery in u.k. assets. level in caserket of a hard brexit, which is probably 30% probability at the moment. yousef: the scenario there is in the event no agreement is reached. thank you for your time. let's get you a preview.

chip makers take a huge hit. is the downside trend going to continue for the rest of the year? this is bloomberg. ♪ ♪

yousef: let's get to the story around uber. they issued a report on sexual assault, an issue that has been for theing problem company and a concern for investors. helping toaim of record reports of sexual misconduct. the company's chief legal officer spoke to bloomberg in san francisco and explain why a move will boost uber's business. >> it is very good for uber's business. it is the right thing to do. it is good for all of us.

if you enhance the safety of the platform for women, you will make it safer for everyone. does is take us closer to that goal of a safer platform. i understand why some people might be reluctant. look at, the chief legal officer is the guy in the room saying take less risks, not more. the reason this makes sense for us is we have a paramount duty to our shareholders, no question , but to our stakeholders, the millions of partners who use the platform every day. we have to do right for them. this is a step towards making the platform sustainable and safer long-term. >> uber has done force arbitration. it foris eliminating discrimination cases. microsoft allows class-action

around sexual harassment. why not go that far if there is an argument to be made they getting these out in the open that you address systemic problems. to applaud airbnb, facebook, and google for following suit. the fact to the bar is being raised for everybody is a good thing. it is a great thing when you have companies competing with each other to raise the bar on an issue like this. when we announced the end of mandatory arbitration, we did so with safety in mind. that is what troth that decision. -- drove that decision. these are active conversations we continue to have. >> you are considering the discrimination provision? >> definitely, one of many things we are considering. there is nothing wrong with arbitration.

arbitration is an appropriate tool used every day by businesses in an appropriate way. what we determined that when it came to sexual assault and harassment that it was inappropriate, because it stripped control from the survivor, continuing to do with the original act can do in terms of stripping away control of a is not an appropriate tool. you want to give the survivor a choice. as we look at whether it is appropriate for other claims and that is the frame we will approach it with. tech,: a tough week for strong selling for the chipmakers. weak forecasts from nvidia and applied materials wiped significant value from the sector. we ask if the trend would continue until the end of the year. frankly, theike, chipmakers have been on a

downward trajectory. that thealways a sense long-term is good and there is opportunity, but for now, nvidia reported. they have a lot of exposure to cryptocurrency mining. they use chips from nvidia. that hit their earnings. the outlook for the coming quarter was significantly below analyst expectations. also applied materials, which makes the machinery that manufactures chips also reporting disappointing numbers. >> it's not just iphones and apple, but the crypto world? >> absolutely. apple has said sales of iphone units will not improve massively. the revenue from iphones is likely to improve, but that does not help the chipmakers.

apple is trying to make up what it can't do in volume through margin. xiaomiave earnings from and jd.com. what are you looking for? >> how about margin is developing. both have an investing heavily. withi is more to do selling the phones, the hardware , and not a huge margin, in the hope they regain that on the service revenue for years to come. it is unclear whether that has proven successful. they are below the ipo price. asks an american, i have to , we have black friday next week. does this matter for amazon and the big online retailers? >> it is a good story to tell investors, that lack friday

sales grow every year. if they didn't grow every year, that would be catastrophic. each year black friday sales will grow. what can you infer from that for amazon sales more broadly? not a huge amount. they are talking about the gross revenue they are selling and passing on to the retailers themselves. it makes it hard to infer anything substantial about what is happening with amazon itself. black friday in the u.k. is not a big deal, but in the u.s., it is massive. heralding theving start of christmas season. >> thank you for joining us. >> thank you for having me. zuckerberg'st fortune has tumbled $17 billion this year.

that as facebook faces fresh criticism and continues to grapple with the fallout in response to the russian election meddling. fell 3% friday to the lowest level since april 2017. was recently the world's third richest person has fallen on the bloomberg the universe index, $55.3 billion, tumbling $31 billion from the peak on july 25. that is the key function on your bloomberg to get perspective on where some of the wealthiest people in the world are currently at. jeff bezos leads the pack with $132.4 billion. i think what is really interesting is that analysts are still quite bullish on facebook. seven holds, three

sells. 22%, but and lost lessee a return, so it would not be a stretch to estimate there could be some additional progress for mr. zuckerberg in the months to come.

yousef: it is 8:30 a.m. in dubai . a live shot of the financial center. some markets in the middle east closed for a public holiday. it will be interesting to see and light of the lower amounts of liquidity. there is important news flow around the killing of jamal khashoggi. let's check in on the headlines. u.s. vice president mike pence has traded sharp barbs with xi jinping in speeches at the apec in pop in new guinea. the chinese leaders of the world is facing a choice between cooperation