francine: how messy was the latest stage exit talks ahead of the summit this weekend? a power grab. will call us with carlos goshn comeau is next. goldman's former chief executive fed with the man at the center of the 1mdb scandal. francine: good morning, everyone. good afternoon if you are watching from asia.

this is ""bloomberg surveillance." i am francine lacqua in london. this story on the markets is about oil. you are concerns about supplies, inventory, and if you look at signs of are dropping oversupply. from the euro area, we are getting the november manufacturing pmi, 51.5. the forecast was 53.5. tv,ng up later on bloomberg we talk about black friday sales with the chief executive of macy's. that conversation is that 2:30 p.m. u.k. time. we will see how the market is looking over all with of the pmi, but first camera as get to the bloomberg mus first word news. >> spain's prime minister says he will vote against the brexit deal is no issues are made over

the issue of gibraltar. leaders from the eu's remaining 27 countries will meet to give their view on the brexit deal. renault and nissan have reiterated their support for s ghosn -- they have a reiterated their support for their alliance with the departure of the embattled former chief executive. they voted unanimously to dismiss him. randall has appointed an interim leader and asked its partner to do the same. >> we had a long exchange with the economy minister about renault-nissan is an enterprise. it is very important for both of us the preservation of the alliance. the group is going through turbulence and it should not be allowed to weaken our alliance

as threatening hundreds of thousands of jobs. >> and says of them ceo lloyd blankfein come held a meeting in 2012 with a malaysian financier alleged to be at the center of the 1mdb scandal. that follows a report or the "new york times," regarding the investigation. lloyd blankfein has not been accused of wrongdoing. he says he raised money for 1mdb without knowing he would be diverted. seventheaded for its week straight of losses. stoked overns were potential supply glut. that number is said to be topping in axis of 7 million barrels a day as u.s. crude rose ofwell in the longest streak gains since march 2013.

the eu central bank says uncertainty over italy's budget threatens to damage the international economy. written and bonds have risen this week but 10 year yields -- italian bonds have risen this week. should they decide to accept the commission's recommendations, we will support a prolonged implementation time. we will allow the economic when over to produce its effects on growth and thanks to this, to reduce the public debt. >> the cryptocurrency crash of 2018 is heading for its worst week yet, bitcoin sinking to $4000. cryptocurrencies weekly decline is now in its worst five-day stretch.

year,an epic really last cryptocurrencies have become mired in a nearly $700 million signs -- shows few $700 billion route that shows in th no sense of dissipating. global news, 24 hours a day, on air and at tic-toc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. francine: the country criticized changes to the accords on the issue of gibraltar and described the move as treacherous. theresa may returns tomorrow for the eu leaders. let us start with spain. there are not happy because they changed the wording on gibraltar in the brexit deal. maria: the that's right. they say that there is no word on gibraltar. eyes,prise, in their

gibraltar is not part of the u.k., it is a colony and they want that made clear in the text. they say that their future relationship when it comes to gibraltar has to be u.k.-the spain bilateral, not just spain and the u.k.. they feel they have been betrayed but the negotiation and yesterday night they spoke out against the deal. i don't think we have ever seen this from the member state. the said that if they do not get this clear language in the text, they will vote against it. francine: what happens if they do vote against it, is that a veto? maria: they think it is a veto when it comes to brexit as a whole. a member state cannot really blockade, but, on sunday, the eu has always planned to put out a joint statement on the decision and the deal that should be

signed. if spain does not approve it and vote against it, the eu cannot duck cookie put out a joint statement. politically it is very difficult sees it asthe eu success if you have a member state very publicly opposing the text you put out. spain and notes to ethnically that the eu cannot really say that or put a statement that a member state does not agree with the spain a nose also. -- spain also knows that the eu cannot really put out a statement that the member states does not agree with. they do not want to open up more negotiations because they think just like we are seeing now with spain, that other countries want more concessions. everyone is confused as to what exactly theresa may will do on saturday.

the big takeaway we get from a member states is that they want to seal the deal on sunday, they don't want it to be a big negotiation or reopen talks, they just want the optics of a deal. francine: thank you so much, in brussels. joining us now is the scum of heritage maharaj from j.p.a morgan asset management, and teneten nickel, from intelligence. owhen you look at where theresa now, as she puts this offer to lawmakers in december and a gets rejected, what happens next? just the first round. i am not convinced that the first round of voting has been decided at the moment.

until 29th of march. we still have some time time, and i think this will take some time. francine: there are very similar off schoutens -- options. they would go back to the eu for another deal. or, theresa may could quit. with you, right now, she is on one who could push this through. but the answer from brussels will be very clear, take it or leave it. the only way to see this is through another vote by parliament. the idea of going back for another referendum would be a coming causing mold. there is no a that a pragmatic centric solution will get support in another public vote. ?rancine: how do you see this >> i think continued volatility is a central case. on the neutral views u.k. assets because it is just

too binary and outcome going into the parliamentary vote. hearing fromwe are the bank of england have to be noted. once you have a resolution on brexit, we move quickly to a late cycle economy that requires higher rates. it is hard to position for that today because of the volatility over the next few months, but that will quickly become the .arket narrative francine: it could be a scenario where the u.k. economy crashes. aushka: it could be possibility, but a hard brexit scenario changes a lot of things. thinkne: one day parliament will vote on the still the second time around if it is not a different deal? see dish at the end we're carsten: once we

are getting closer to the decision over when you want to jump to the clear path or not, you might get problems from the government. francine: is it a binary call for pound? is that why you think it would not jump a second time? thushka: yes comprising the israeli are seeing risk reversals in sterling. the uncertainty surrounding brexit, the market is pretty sanguine that we will eventually see said he prevail. best sanity prevail. but the risk of a no deal brexit is higher than what we are facing. francine: is that a 25% jump? yes, in the 20's. the possibility that a second round of votes does not pass. obviously, market stress and will holdata weakness politicians minds on what is the right scenario for the u.k..

francine: ok, thank you both. both of you will be staying with us. stay with surveillance, there is plenty coming up including furor over fuel. will the protests going on in france's way emmanuel macron? him on they sway macron? we bring you the story next. this is bloomberg. ♪

♪ francine: economics, finance, politics. this is bloomberg surveillance, an francine glencore in

london. >> this committee is said to be pushing authorities to continue selling irish shares in the u.k. if britain crashes out of the eu without a deal. ireland is the only eu country without its own central securities pleasantry and requires on its u.k. based operations to settle it trades. once in europe loses financial passporting writes, the euroclear service would be unable to operate. government is said to be contacting key allies to ask their telecommunications companies in their countries to support the deal. huawei is a world's second-largest maker of smartphones and has long been theled a security risk by u.s..

this company is said to be among companies competing for estate valued at $8 billion in a refinery unit owned by adnoc. according to sources, the abu dhabi company is reviewing offers, though a deal may not be announced until next year. businesshe bloomberg flash. francine: thank you so much, markus. the finance minister in europe told lawmakers that the government may send another reply to brussels after its rejection, with the main aim of illustrating programs taken over by the government. protests are said to resume tomorrow. we have sporadic blockades france, with 300,000 people demonstrating in the country on saturday. with more on what these protests in thushkais bring

maharaj, j.p. morgan asset management multi-asset strategist, and carsten nickel from 10-year intelligence. to any teneo intelligence. carsten: let us put into perspective, we have the european parliament elections coming up next year which will be a test. overall still early in the presidency which is a big that in the long run. francine: where does that mean for european assets? you have the fight between brussels and rome over the budget. do do with investments overall in europe? thatka: i would say european equities are preferred, but political headwinds as you

mentioned are a source of concern. the other is as with the german pmi this morning, we have not seen stabilization on the growth racist. up to now, without the weakness was partly auto-led, but the continuation is adding concern. also, the ecb is ending qe at the end of this year, this comes alongside a surprisingly weak growth backdrop. there reducing support from center -- we expect reducing support from the ecb to be expected. but it is a high bar for the ecb to derail the kiwi this year. on tradehey will focus policy. if the growth outlook in europe that you are rates because of a town in risk and spreads, it will affect the ecb's past policy -- the ecb's policy rates past profile including qe.

>> do and up with angela merkel still? i think in the end if you take a step back here, all of these changes in the end, there are not really playing out in the european council. in a, president macron is facing a lot of issues. i think angela merkel is still a strong leader for now. francine: if you look at the , the mostbloc important vote right now is the cdu leadership. depending on who becomes a leader of germany, they could change the way europe goes. main difference between germany> and france is that the euro question in germany is not> half as politically salient as it is in france. the concern overall for april european outlook is very strong across the political border in germany. francine: ok, thank you both for

joining us. now, up next, lloyd blankfein's 1mdb headache continues. goldman sachs confirms that the former chief executive had a meeting with a malaysian finance year alleged to be at the center of the scandal. let's next. ? thushka-- we discuss that next,s bloomberg. ♪

is franci this bloomberg surveillance. i am francine lacqua here in london. lloydn sachs says blankfein accompanied one of the evil at the center of the 1mdb scandal to a private meeting in london -- one of the men at the center of the 1mdb scandal in a private meeting in london. he has not been accused of any wrongdoing. joining us from singapore is bloomberg's asian news editor. thank you for joining us. first of all, why is it significant that lloyd blankfein man ineeting with the question? >> yes, there are conflicting reports as to who else was at the meeting. the meeting comes after goldman raised $3.5 billion for 1mdb earlier that year, and months before, another $3 billion sale.

so, what was discussed at the meeting, and what was the man's role at that meeting, those are the issues that prosecutors are probably looking to uncover. francine: we also heard from the former malaysian premier who also had meetings with lloyd blankfein. what does he have to say about this? >> his meetings with blankfein aroundewhere 2009, 2012 and 2013 as well. e said that 1mdb's lawyers told goldman sachs that they should either once seeking that they should be seeking more information regarding the funds. francine: thank you so much. if you look at the timeline thislooks like scandal timeline could run and run.

we are live in paris next with more on the nissan-renault's tuition. asre is not as much volume there were at this week in the market. u.s. futures are pointing to a pretty weak open while asian benchmarks decline. oil is also dropping on signs of oversupply. oil, -- this is what we will be talking about, wti falling for a 5th street week. = -- fiftheet straight? thushka: week.

francine: "bloomberg surveillance welcome to. -- welcome to "bloomberg surveillance." u.s. equities pointing to a

weaker open. nissan is said to be seeking and the review of its shareholding structure with its alliance with renault. this comes at the company released its chairman. hours after the unanimous vote, the french finance minister and japanese economy minister pledged their strong support for the alliance, calling it a winning cooperation. it looks like the new leadership of nissan is already making moves to shake things up. we will have plenty more throughout the day. sometimes this happens when your cross atlantic. you lose a little bit of technology.we will get back to that nissan story . let's get straight to the bloomberg first word news. : spain's prime minister

says he will vote against the brexit deal if no changes are made over the issue of gibraltar. remaining 27the countries will meet on sunday to give their blessing on a deal agreed in principle yesterday. prime minister theresa may a key political win -- it hands prime minister theresa may a key political win. on saturday, i will return to brussels where we will discuss how to bring this to a conclusion in the interest of all of our people. the british people want this to be settled. they want a good deal that sets us on course for a brighter future. markus: renault and nissan have reiterated their support for their alliance despite the firing of their chairman.

also telling press of stabilizing the current structure is the best way forward. the nissan board voted to .ismiss the chairman had a long exchange with the economy minister about renault nissan as an enterprise. what is very important for both of us is the preservation of the alliance. the group is going through turbulence and that should not be allowed to weaken the alliance and threaten hundreds of thousands of jobs. markus: goldman sachs is the former ceo held a meeting and 2012 with the malaysian financier allege it to be at the center of the scandal. that follows a new york times report that federal prosecutors are looking into the meeting as part of a criminal investigation.

forman says it raised money one mdb without knowing it would be diverted. oil is heading down for a seventh week in a row after saudi arabia says it's output may have reached a record. saudi's energy minister says the kingdom is pumping in excess of 10.7 million barrels a day. that is as u.s. crude inventories raised for ninth week. the european central bank says uncertainty over italy's role busting budget threatens to damage the national economy. italy's current financial commissions are far too tight for a country with weak growth and low inflation. nds have risen this week but 10 year yields remain below 3%, far lower than the start of the year. 2018ryptocurrency crash of

is heading for its worst week yet. that is the worst five-day stretch since kleptomania in early january -- cryptomania peaked in early january. 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 markus karlsson. this is bloomberg. francine: let's get back to the nissan renault story. it looks like the new leadership at nissan is really trying to make moves, already to shake things up. >> that is right. it has been a real roller coaster since the start of the week when it broke that the chairman was arrested.

as we head into the weekend, what is becoming increasingly clear is that the status quo that is this intricate uncomplicated partnership alliance between the french and japanese carmakers is not going to remain the way it is now. pushing, said to be will be pushing for it to be opened up. it has long been viewed as lopsided in favor of the french. it has long worried the japanese company because renault, which , while stake in nissan its biggest and most influential shareholder is the french state. one can say that from a global point of view, france has never been seen as a complacent

shareholder that is interventionist and will be ready to fight for its own on the ground. francine: what does this all mean for the two carmakers on the ground? does it change any of the supply chain? tara: the two carmakers, if the alliance were to break up, it would be extremely messy. they share engineering, research and development, even a lot of manufacturing sites. there is a site not far from paris that churns nissan brand cars. it was unveiled last year that they are planning on making even more. as we saw earlier in the program, the french and japanese ministers were speaking side-by-side yesterday in paris, meeting to try and we are sure that the future of the alliance, both of them want to keep it together. in which shape, that remains to

be seen. francine: thank you so much. european stocks gaining today. u.s. futures adding to a weaker opening. folly energy prices are just one of several indicators that concern investors about the strength of global economic growth. meanwhile, political turmoil in europe, lingering uncertainty and a trade war that has engulfed two of the world's biggest economies. what worries you the most? there are a number of risks bubbling over the surface, but is there one big one? i think the big focus is the spread widening in u.s. credit. we have seen vulnerabilities in ig throughout this year. i think that is more a reflection of what has happened. focus. increasingly in

i think this is something we are watching more closely. is that a better sign of the second derivative of growth momentum slowing. francine: in honor of black friday and all of the sale shopping going on, this is our markets live blog the question. where should traders go bargain-hunting? is there something that looks cheap? shka: there are parts of em where valuations are cheap. the issue i have is the catalyst for upside is missing. u.s. cash is now in assets.

an asset class makes everything else look slightly less attractive. even the valuations may look cheap, the fact that the trade-off is there, that didn't exist for a long time just means the bargain-hunting type of argument is less compelling. francine: we were talking about the price of oil, how can you be concernthis is supply and not something more sinister about demand? hka: for now, we see this as a supply overhang point. the fact that you have oil futures curve in contango now is the market isi expecting an overhang. we are looking at demand coming out of asia or em countries, relatively robust. even if the global picture is

moderating, the demand for oil outside of the developed markets is pretty robust. that is another area we're looking at closely. the final point i would make is that because we think this is a supply driven move, the stimulus it provides is quite helpful given all the headwinds we just talked about. right. your point is ascertaining whether this is a supply driven move is a strong focus. francine: thank you so much for joining us today. coming up later, this black friday we also speak with the chief executive of macy's. that conversation is 2:30 u.k. time. coming up, a warning from the u.s. is reportedly urging its allies to avoid using equipment from china's skyway technologies. that conversation is up next. this is bloomberg. ♪

francine: this is "bloomberg surveillance." government is reportedly contacting key allies to persuade telecom companies in their own countries to avoid using equipment from skyway. they have long been labeled a security risk by u.s. lawmakers. reportedly has rejected allegations that it spies for the chinese government. how practical is this a legend request from the u.s.? >> it is a tricky one for

european telecom companies. deals withstruck key companies. it is not simply a matter of saying no more. francine: why has this come up now? theas: it is today with next generation of telecoms technologies, especially five g networks. key orders are going in now. billions of dollars worth two big suppliers like nokia and ericsson. it is key to get these policies in place before those orders get placed by the carriers. francine: thank you so much. let's stick with the relationship between the u.s. and china. havedents trump and xi both indicated their ready for the highly anticipated summit in argentina next week.

joining us now is the cohead of s affect thatet goldman sachs. as long as these reports on cybersecurity stay, does it make it more difficult? i think the relationship between china and the u.s. is a multifaceted one. there are tensions and a number of different places. i would say i think one should be reasonably cautious about the chances for any big breakthrough at the g20 summit. when you look across asset markets, a lot of china related assets are pretty downbeat. the relationship with the u.s. is one important asset, but china's growth is another important feature we are very focused on.

china's growth is probably getting to levels that are pretty low or intolerably low for the regime. the kind of support they're going to provide going forward is going to be a key asset -- aspect when thinking about china. someine: do worry about point investors run out? kahamaskhya: i worry about that less in the short to medium term. i think they still have the ability to expand credit and cut rates lower than what they have and probably encourage a bit of a boost on the fiscal side as well. i think there are still tools to support growth here. it makes some of those longer-term debt related problems worse.

i think that is something they are even concerned about an focused on. francine: what is the next step? yzerman be the right thing to look out when you look at trade tensions escalating? if so, is are going to be a repercussion from the u.s. side? kahamaskhya: i think their enemy is a key asset -- the renminbi is a key asset to look at. likely path ist that it goes through seven. i think the move is likely to be gradual and managed to because i think even the chinese authorities are key that any such move does not affect domestic confidence too much and doesn't tighten the global finance is too much. if you saw a huge repercussion and the rest of the world, i tend to think this is now being flagged enough by markets of their better prepared for this move than say the moves you had

in 2015 or 2016. the moves you see this year are similar. we haven't quite seen the same degree of reaction and global markets. impacte: do we make the the fact that china has stimulated domestically and will take away support that china gives to its neighboring countries? kamaskhya: i think it is a fair point, you to look at this both ways. one of the striking ways is that while focus has been on trade tensions and trade around china, what is striking is the trade data in and around china has not been so bad. the glass half-empty view of fact is that if you get an escalation of great dispute, that could be one of the shoes to drop. a lot of the slowing you have seen so far has been in domestic driven sectors.

if we extend that and reverse some of that, it is probably going to be helpful for china and also its neighboring countries. francine: thank you so much. this is bloomberg. ♪

francine: this is "bloomberg surveillance." 2018 has been a tumultuous year for the markets. what can we expect for 2019? let's look at the top 10 themes. you have a great macro outlook for 2019. i havef your themes, looked at. one that catches my attention is commodities in emerging markets. are they linked? kamaskhya: they are linked. i think one of the interesting things is obviously the surge in oil prices and a surge in commodities you saw until a month ago was probably a pretty important headwind to emerging

markets growth for most of this year. i think some of the disappointment you saw was related to the move in oil prices. while there is the following oil prices, it feels to us to be still something where markets are probably getting too nervous about the commodity supply and demand picture, it is helpful and has a silver lining. the silver lining is that it is going to provide the boost to a lot of emerging markets that are oil importers and probably keep inflation low across a wide range of countries that takes perhaps some of the edge off upside risk inflation people have been worried about. francine: what do you think markets get wrong? think we are trying to price the end of the cycle a bit too soon. review that runs through our top teams is that we are late cycle, not end cycle.

it is a bit too early to go into the bunker. i think you probably still want to take some risk and stay invested, but you want to have hedges on. you want to move up in quality in places. it is too early to completely move into the bunker, thinking this is the end of the cycle here and now. francine: what would be the first sign? kamaskhya: i think once you start to expect growth, recession looks pretty likely over the horizon. i think that is going to give you some signal of that. that is notast, something we expect to happen in 2019. a low too probably modest probability of happening in 2020. rare to see sustained negative returns for risk assets when global growth is slightly when still at 3% or 3.5%

none of the major economies are forecasted to go into recession. there is only one thing you need to get right. is it your dollar call? kamaskhya: i think it is crucial. when you look back over the past six months, it has been a very good cocktail of circumstances for the dollar. you have u.s. growth being extremely strong and robust, growth slow and the rest of the world, and a fed that is tightening at a steady pace even as policies are pretty easy across the rest of the world. that may still be the case for the next few months. it is not a huge sign that momentum is picking up over the rest of the world.

the fed is probably going to deliver another hike in december. if you look across 2019, we tend to think that all of those three forces are likely to occur. the rest of the world to look a little about better, i do also see tightening and some of the smaller g10 economies of the world. francine: thank you so much for joining us today. "bloomberg surveillance continues in the next half hour. this is bloomberg. ♪

comcast business built the nation's largest gig-speed network. then went beyond. beyond chasing down network problems. to knowing when and where there's an issue. beyond network complexity. to a zero-touch, one-box world. optimizing performance and budget. beyond having questions. to getting answers. "activecore, how's my network?"

"all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast.

♪ francine: spain accuses the eu treasury over gibraltar note how will the last stage of talks continue? summit, theig g20 united states repeatedly asks allies to stop using equipment from china's huawei. and, fresh questions over 1mdb former chiefachs executive, lloyd blankfein. this isveryone, bloomberg surveillance. i am francine lacqua in london, tom keene is in a new york. just back from thanksgiving, of course, we have a very thin volumes across the board. it a supply concern? tom: francine kimye and so busy. it is the new york times holiday gift guide, we are getting ready

for black friday and we survived thanksgiving. was a failure, francine, he just did not work out this year. andhe g20, it is amazing the whatcom at it's seven days away? it is a big deal. francine: you wonder if there is a rapprochement with china and the u.s., or there is concern over cyber technology? first, we get to the first word news. taylor: francine, theresa may is seeking support for her brexit deal by going over the heads of politicians, appealing to voters directly with radio and tv q&a sessions. members of her own conservative party are opposed to the plan that was agreed on by her government and the eu. low makers will probably vote on it next week. jinping has signaled that they are ready for their talks at the g20 next

week. president trump says china wants to make a deal badly, and "we are very happy about that." president trump says he signed an order to close the border with mexico. troops too authorize use lethal force against migrants trying to enter the u.s. illegally, telling reporters in florida that there are at least 500 criminals within the migrants waiting to enter. although he did not offer proof. thing, tom, black friday. officially starting the holiday season retailers are looking for it to be a blowout. the industry is said to be enjoyed and the strongest environment ever. walmart and nordstrom has said that online sales are already searching. global news, 24 hours a day, on air and at tic-toc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am taylor riggs. this is bloomberg.

♪ tom: tom, thank you so much. got grumpy's yesterday, they brought it over for thanksgiving. futures are at negative five right now, and the euro flattening. is also a big deal. no question about that. the nymex crude is that 53.16. and crude oil, flat out, i am not saying will get 3.99, but we are getting there rapidly. francine: yes, we seem to be. u.s. futures are dropping and markets seem to be questioning whether the oil drop is due to supply or demand. european stocks are climbing.

i am looking at pound and theresa may has a pretty big weekend ahead of her. pound is datin losing the gains it saw yesterday. european stocks are holding steady, and we are looking at u.s. futures. oil heading for its seventh loss. falling energy prices are really just one of several indicators concerning investors about the strength of global economic growth. s gets to our guests for the hour, christian keller, barclays head of economic research, and the gerry fowler, aberdeen 'tandard investments strategist. gentlemen, it seems like we could be in for a trade war for the next 20 years and brexit could be still discussed for another year. >> i think of a trade war, the trade tensions between the u.s. and china particularly, basically frame our outlook for 2019. if you look at what has been

quite persistent over the year, it was the weakness in trade and volatility that came with it. are beingthe u.s. distracted from it. the continue to do quite well. u.s. equities also did quite well animated look ok, but the rest of the world was already stuttering. the question is, how can the u.s. keep up with the rest. francine: do you expect any resolution at the g20? gerry: it is very hard to tell what is an trump's mind. i think he will take that meeting and come out on one side of the other quite strongly either way. the market is leading towards expecting a good result, so perhaps there is room for a surprise. francine: but if we do get a good result, is not already priced in or does that mean that stock markets go up? gerry: i do think stock markets would go up, if there is a particularly good result. what we mean by a good result, i

think a good result of the market likes would be some sort existingnement of the decision on imposing higher tariffs on chinese imports. anything short of that, we are so to have a higher tariff against chinese imports on the generally first, which could be disruptive. the market is also pessimistic. looking at the short cycle activity in the hong kong market, but is 15%. everyday there is 15% of shortselling as a share of market turnover, higher than in 2015 during the china crash them a so there is a lot of pessimism in the chinese assets, in the global assets to some extent as well. but i think that a meaningful result would need to be something that is persistent and handled, as opposed to just "we agreed to give talking." tom: what about the correction? could we look for a rebound or ?ould you move to more cash

a gerry: i think it is a correction justified by rising risk rates. we have rising libor yields, all in conjunction with strong oil, interesting mix for emerging markets. the correction is also starting to worry, the negative impact of the synchronized slowdown. the data on housing and credit markets are also some to look for. if we have back a skating, you have a justified strong dollar. it is u 5% overvalued at the moment. that is that is an entirely justifiable overvaluation. what we are looking for is for european and chinese growth bottoming, then heading up? tom: folks, one of our themes on the friday after thanksgiving is diving into the 2019 outlook.

christian keller, in your outlook, is it about chinese and european slowdown? christian: i think very much so. it is hard to see what more the u.s. can do. since the midterms, we know we will not get additional fiscal stimulus, maybe additional fiscal spending. there is room for public investment. we believe that fed is quite hike.ined to continue to what it boils down to her then, is really how much the rest of the world can turn around and support u.s. growth. that is of course in particular, china and europe. as i said earlier on the radio show, europe has been the real disappointment this year. the question is whether we see some turnaround in the fourth quarter this year and in 2019.ular in francine: good morning for anyone listening to us on the radio as well. if you look at some of the concerns overall that the market has, are they a little bit too pessimistic? are they pricing in a recession

in 2019, which is very unlikely? christian: we think the market may be turning a little bit pessimistic. we still have a growing disposable income in households that we see every month. jobsded another 200,000 last month. the fundamentals of the u.s. economy still look quite ok. now the markets, obviously when you look at credit spreads and other phenomena like the potential flattening of the yield curve, if you follow the story, it suggests that we are getting close to a potential recession. we see a slowdown in the second half of 2019, then possibly a low potential growth in 2020. but i think 2019, to see it recession, you would need a trigger. oil right now not going to $100 a barrel could be a trigger. francine: what do you see as a trigger for a possible significant slowdown? gerry: i think it is already

underway. the more significant slowdown to a recession is a long way off though, there is still an active stimulus in the u.s.. 2019 is on a lot of the stimulus starts to roll off on the economy will need to stand on its own two feet unless there is stimulus. so you will take a while for something negative to occur in the u.s. unless it happens to be a financially driven shock like further widening in credit ,preads, a much lower oil price things like that. economically, i agree, this is a midcycle slowdown. it is substantial. sales growth in u.s. companies has been about 12% in the last 12 months, and given leading indicators on the strength of the dollar, it is likely to slow down to 5% to my which is what the market experts, and maybe even further. we are starting to get weaker industrial production, weaker housing data. the problem is we have a ready

started this midcycle slowdown in the u.s., it has been underway for ten-month outside the u.s. there are no obvious circuit breakers to that slowdown in the so. few months or thank you so much both t joining us. from the climate finance today in paris, an exclusive interview with the chief executive of societe generale at 9 a.m. in london, 4:00 a.m. in new york. this is bloomberg. ♪

>> this is "bloomberg surveillance." i am taylor riggs with your bloomberg business flash. the departure of carlos ghosn is likely to lead to changes in the nissan-reynold alliance. bloomberg learned that mason

will try to create a more equitable partnership with a renault. the french automaker has more influence in any sense than nissan does in a renault. oil is heading for its seventh weekly loss to react futures were down in the new york. saudi arabia signaling that it's output may have reached a record. that is your bloomberg business flash. tom, francine. much,ne: thank you so taylor. spain is threatening to vote against a brexit deal. the nation has criticized during just to the accord on the issue of gibraltar, describing the move as treacherous. the british prime minister returns to brussels tomorrow for with thete talks wit the european commission president. we continue with our guests, gerry fowler and christian keller.

with the fight going on in brussels, even if theresa may gets the deal through, she still needs to sell it to her own lawmakers. what are the chances of her getting this through parliament? gerry: i believe it is unlikely she gets it through parliament. we probably put a higher probability on a second referendum or a no-brexit deal at this stage. we look at these different scenarios through the lengs of the sterling rate. in theitive resolution next six months or in untenable resolution in the next six months should see the sterling undervaluation. you are sounding like a political analyst. these are very serious repercussions. if theresa may loses the vote in parliament, the vote either has to go back to parliament for a second vote or go to the eu, or

there is a second referendum. for does this mean economics? question: first of all, we do believe that the dynamic in parliament, and -- we believe it passes parliament to react however, in recent days, the chance of a second referendum has gone higher. for the way, -- frankly either answering to will remain relatively high. you have the risk of a no deal and i crash, i would call it, which would mean a lot of economic hardship in terms of trade deception and etc.. now we go into an extended of agreement, we don't know where it is expected to be in the next two years. therefore, we think you will see .ome upside in the pound but over all, it does not resolve issues even if you pass it through parliament? tom: there is brexit exhaustion,

christian. back and forth and back and forth. would you explain again they incentive the eu has to move forward on this? don't they just wait out the bazaar affairs of the united affairs-- the bizarre of the united kingdom? christian: to some extent they have, right? the eu leaders have been saying, we wait. we talked economics earlier, i do think from an economic point of view that we must not forget that the u.k. is the second largest economy in the eu. germany is the second-largest trading partner after the u.s. if you look outside the eurozone. therefore, it is still an thing for europe to get a deal done with the u.k. as well. i would not undermine that. you would see chancellor merkel coming in trying to forge a deal whenever it looks like it could

go astray. tom: what are the most emotional moments for me was to seep theresa may yelling, outright yelling. scotland is part of the united kingdom -- in her comments for or five days ago in that emotional element speech. speech.onal parliament what has been the effects on the debate of brexit in edinburgh? gerry: i think across the country but also in edinburgh, there is certainly a lot of lethargy around but discussion. most people would prefer a resolution than an ongoing discussion for years to come. i think a big difference is that while edinburgh does have quite a few asset management firms, some of them large, london has the financial services industry more broadly, including banking and investment banking. francine: where does that mean for pound? does it either go to a 1.10 or

one .50? or there is a middle ground? gerry: we recently have been running some scenarios on that our monthly valuation model does show sterling at roughly the right level now. it has been calibrating the economic data since the referendum to spot moves on the sterling. we know there is a big risk premium, so we actually looked at what our evaluation would say now if we only trained it up to the referendum, then used the data, only the economic data since. if there were no referendum, where would sterling the? the answer is that sterling. would be 10% higher so we think the risk premium on brexit is 10% as a discount on the pound. when we start doing scenario modeling, this is a cyclical currency. to the extent the world is doing well i at this moment, if

there were no sentiment in the u.k. and slow activity in the u.k., sterling would be even higher. so it is reasonable to say that if there were a definitive and relatively positive brexit outcome and agreement with the eu, the sterling could be a lot higher. but equally, there are some negative scenarios to make that political discount entirely justified. their of gerry fowler aberdeen standard investments, and christian keller of barclays, they both stay with us. interview we have an on sales. we will also talk about the u.s. retail space and consumers with our next guest. this is bloomberg. ♪

♪ tom: good morning, everyone. ""bloomberg surveillance." francine lacqua, i know they don't do black friday in the united kingdom. francine: we do! do did not know that. [laughter] we continue to discuss the continuing chaos with bitcoin. dead?e bitcoin miners >> it looks like it, tom. they are in a lot of trouble. people have been expecting prices to stay high, they have high electricity costs and i think we will see some of them shutting down operations. know if that is

enough -- if there was a fiction and some people think it was, what is that mean for the big banks went into blockchain and tendon chile into bitcoin. -- tangentially into liquid. you see them stepping away from bitcoin next year? >> the banks did not go all in. they made some investments, and the underlying technology still has something to offer. i think the banks will still find something to support them. i just don't think hedge funds will go big into bitcoin, is what we will see but next year. 30, is this the end of cyber currencies or is up to gloomy? edit: to currencies, i don't know. it is really hard to make the --e that this was a currency that this kills the currencies.

there are other things that this technology can be used for, but not for currencies, no. tom: eddie vendor world on the walt on vendocvan der the bitcoin watch, thank you for joining us. tom is singing. lyft does not get any better than this. doom doo-my do ♪ our next guest, we talk about the ceo of the national retail federation in the next hour. also, emma chandra. we will get to you. ♪

♪ ,"m: "bloomberg surveillance good morning. it is a gloomy "doomy" london on black friday.

trend noonish till 1:00 p.m. here is taylor riggs in new york. taylor: spain is threatening to blow up brexit talks before the signing off summit this weekend. the u.k. and eu have agreed on a deal, but the prime minister of spain accuses the eu of treachery over gibraltar, which disputed territory. the deal announced yesterday is not finalized until all 27 member states agreed. bipartisans investigation into russian meddling could stretch into next year according to send i -- senate intelligence committee's richard burr. he is pushing back against democrats want public hearings. the former fbi director james

comey says he is eager to answer questions from house republicans, but not behind closed doors. he has been subpoenaed to testify next month and wants an open hearing because "he has seen enough of their selective leaking and distortion." the u.s. reportedly is urging allies not to use telecom equipment made by china's while w -- wawe. italy, and germany are among those the u.s. have talked to. the company has rejected the idea that it spied for china. global news 24 hours a day, on-air and tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm taylor riggs. this is bloomberg. francine: thank you, taylor. staying with "the wall street journal," joining us is bloomberg's opinion tech analysts. if the u.s. were to turn around

and ask allies to stop using the -- this technology, how easy would that be to stop it and where do they buy? >> frankly, it is difficult. is already int critical parts of the communications infrastructure throughout europe and when it their technology is further ahead of the competitors. the two competitors are both nordic carried they are false smaller companies and now, wawe has overtaken them in market share, so it is a big challenge. francine: does it mean some of the european components could benefit -- components makers could benefit? alex: yes. that is the hope. at the moment, they have already cut out of the north american market, which is the biggest one

and the others are companies billionve about 25 euros in revenue. huawei has close to 80. these orders will manifest themselves in the next decade, perhaps incremental benefit, but not something which will really be a vast boost to their top line. francine: if this were to be -- speculation, but how would the chinese take it? badly, and one could imagine they would in response make it more difficult for western companies doing business. we have seen from apple that they totally careful line the way they do business in china. they can't sell books, can't sell movies through itunes. they situate their servers in china. the pressure those companies are only likely to

be ramped up if there is pressure on chinese companies. , thank you.bb our next guest needs to adjust to new technology in the global space. one of the great themes of this year on trade and tariffs has been the overlay of technology. china dealingf with technology. the u.s. dealing with technology foreign and domestic. in the next year, this has got to be a greater velocity of technology on our economy, right? heardean, what we just was another example that this is much more than a bilateral trade deficit with china and the u.s. president trump started off as. "war" or bigger conflict about china trying to get ahead on technologies.

2025 strategy says they want to be dominant in some of them, particularly artificial intelligence, etc. this is what makes it difficult to reach a compromise. if it was just about trade tariffs, we would be optimistic on the g20 coming up with a deal, but there are a lot of communities in washington, d.c., the security community who say this is our moment. this is where we can contain china, where we can push them in a direction and make them do what we want. tom: no, but this is important. your observation "push them." where is any observation that we -- push anyone on sauber ciber, on a transnational basis? it isian: i'm not saying necessarily going to be a successful strategy because china is not going to be pushed around, but it would make it more difficult for china to continue with its ambitious

growth plans. they are already seeing that at the moment for the first time in a long time. the u.s. economy has looked stronger than the chinese, not in a growth sense, but momentum. that puts pressure on chinese policymakers and i can only think their calculation is in washington at that, in a way, could force them into some kind of adjustment. tom: what is the barclays call on the u.s. economy? but what kind of 2% economy does barclays see? christian: we see around 3% growth this year and we think next year, growth is going to be similar. we see a slowdown in the second half, but we are not as pessimistic as markets seem to be in that we still see the underlying engine of the u.s. economy and that is a consumer with highly disposable income, real income growth.

jobs are being added to the economy every month. lump sum payroll comic over 200,000 or so a month. i think that is the backbone that leads us to think of 2.5%, 3% being possible next year. tom: since i can't convey enough how the barclays call has become the outlier call. in thethe popular call early fall, now it is optimistic. francine: it is, and you wonder why the markets are more pessimistic about the future and what that means for your dollar? and you look at dollar, what -- if you were to take something that is a best benchmark to see war, is itng trade renminbi or is it dollar? christian: we think the dollar will win that war, in the sense that the u.s. is still a safe haven asset and you look at 10

year treasuries. that istever you see, the place where money flows when things become uncertain. i think that status is good there. the american economy continues to outgrow the rest. it may not as much as we thought earlier, but europe is growing 1.6%. it continues to have the growth differential and a significant differential in interest rates. again, china, not. chinese in some way have lost some of their interest rate margin, as well. we see the renminbi going through seven next year. francine: what would that do psychologically? will it collide if renminbi touches seven? christian: in principle, seven is just a number. the question is what it will do psychologically in china? there are forces in china that want it below. that is why we haven't seen it there yet. we have a current account

deficit, the chinese want to keep it there but if we don't get a big resolution of some sort at the g20 and the economy continues to slow, i don't think the chinese -- the pboc would stand in the way of letting it go. they would do it in a gradual manner and try to work on the psyche of chinese investors trying not to run out of the renminbi but in the scheme of things, this is the direction it is going. to francine: what makes you worry about the chinese economy? do policymakers have the tools to deal with the downturn, even if it is more violent than markets are pricing in? christian: they have less and less tools. the leverage of the economy on the corporate side now , the federal -- the state -- central state balance sheet is quite robust so what they can still do is more central government spending by

cutting taxes or spending, themselves. that is still the ultimate thing they can do. they can do relatively little on the monetary side. the renminbi could go weaker than they want to. tom: a lot of the ebbs and flows as we be in on this friday -- begin on this friday to look toward 2019. christian keller with barclays. , withfriday, joe feldman the pulse of retail in america. we will do that in the 6:00 hour. building,ectacular the bloomberg offices of london. this is bloomberg. ♪

francine: this is "bloomberg surveillance." italy's prime minister says he would ask the eu to delay any procedure on the country's budget. he told lawmakers the government may send an exhaustive reply to brussels with the aim of illustrating programs and decisions taken by the government. let's get back to christian keller of barclays. we talked about brexit and the u.s.-china trade war. where would you put italy in this? how big a risk is it to the cohesion of the european union? christian: i would definitely put the italian issue, a bigger threat to europe than brexit is. it is the second largest economy in europe, but easily with its debt and being a euro area

country is the biggest issue. by the indications italians as well as brussels, that they want to postpone this conflict a little bit and after the european election in may 2019, that is when we will see either some resolution or the true clash. francine: will there be a true clash? will we get to the point where the eu is talking about real sanctions on italy? christian: i think they have little other choice. a situation whereby the you seent in italy and continuous violation of european rules, the commission has to act. otherwise, i would think this is about the future of the entire system and in particular, that so-called every attic countries would push for this, the rules-based reply. francine: who wants to stay in a you mean you can't deliver on

campaign problems -- promises? christian: the union's answer to that would be you cannot promise things that are just impossible. it is fair to promise universal income of -- i don't know the number in terms of how many hundred euros -- but if you don't have the finances to do it, you have 132% debt to gdp, it is an unrealistic promise and even outside the union, the argument would be they aren't able to deliver it either because interest rates would be so high, they could not sustain it. tom: is there any evidence that germany will change in its relationship with peripheral europe and in particular, italy? christian: it is a good point you make. to talk about italy, we talk about brexit, but we have a congress at the beginning of december, 7-9 where the cdu will decide on the new leader.

that is not equal to the chancellor. the chancellor is still miss merkel, but if we get a change --cdu leadership, if it depending on who it would be, we could see a change in germany's leadership in the next two years. that would bring a new style into german government and potentially, more confrontational and if you want, abrasive style with regard to italy. francine: is the market underestimating the impact the cdu leadership vote on december 7 will have? isistian: i think the market -- to say it is not estimated -- ittly is the question is difficult to answer because you don't know how to trade this. while the market is not paying enough attention to it, euro could be changed by a change in

german leadership. tom: in which way? how does that go? toward a more fiscal union? getstian: i think if you the pro-european, but fiscally quite conservative, that could go in the way of possibly a close alliance with france but at the same time, probably a step -- tough stance on italy and countries that don't play by the rules. tom: this is along the lines of -- when he was at morgan stanley and now at pimco. five years out, is that where we thiseading, where there is core of europe doing battle with concentric periphery? i think that is one way to put it, but at the moment, you have a situation where the periphery, if you count spain, portugal, and greece, have been the core. the particular ricky is italy --

the juliette saly is that -- the peculiarity is that italy has been singled out. this time, you don't have spain and greece going with italy, but rather staying with the core, the view of brussels. francine: talking about oil, one of the biggest movers today, if you look at wti falling for seven straight weeks. we saw brent at a psychological level, preaching that level. ching that brea level. does lower oil helped the economies or does it make the ecb transaction possible because they are not seeing inflation? christian: the supply and demand question is never fully solved. you have models by the imf, models by new york. that what wet now

had believed earlier when we talked about oil going to 100, there would be a massive lack of supply and that has turned out to be not the case because the iran sanctions, exemptions and a lot of the other supply coming through. i think oil pricing general for europe and lower prices to help. we looked at models that show good growth at 17 -- in 2017 was the effect of the fall in oil prices. it makes it different for the ecb, but oil is headline and non-core and therefore, we think it should help consumption. francine: christian keller of barclays. oil poised for, a seventh weekly loss. we will show you where crude oil is. america's growing stockpiles stoke concern about supply glut, which is why we are seeing oil down.

brent, 60.74. this is bloomberg. ♪

taylor: this is "bloomberg surveillance." the aftermath of a marketing scandal in china is costly. alibaba haveike suspended the sale of the products in china. -- strugglinguse to eat italian food with chopsticks. goldman sachs says it then ceo lloyd blankfein met with an engineer at the center of the bribery scandal. according to "the new york times," prosecutors are investigating the 2012 meeting as part of a criminal investigation into goldman's role in raising money for the state investment fund 1mdb. it may seek a full refund of $600 million it paid to goldman. that is your bloomberg business flash. francine: thank you, taylor. bloomberg'sd by

european editor for financial investigation. what do we know about 1mdb. there are allegations lloyd blankfein had a one-on-one meeting with the financier behind 1mdb. in the's the allegation new york times story. i want to point out that goldman sachs put out a statement that yes, lloyd blankfein met with him, but not one-on-one. he met with the ceo of a knobby dobby investment fund which guaranteed one of the bonds goldman underwrote for 1mdb. admits that lloyd itnkfein met with him, but wasn't one-on-one and i suppose is trying to imply it was not as damaging as the "new york times" suggests. until now, goldman has tried to

maintain that the improprieties related to 1mdb, the bribes the former marker -- partner admitted playing -- the more times you can come up with meetings that the then ceo met with the principal actors of 1mdb, the harder it is to maintain that story. tom: into the end of the year, what is the level of sweat at goldman sachs? do they pay a fine and move on, or is there general panic within the executive offices of goldman? alan: that's a good question. the answer is, probably both. i am not in the executive suite, so i can't say for sure. bloomberg analysts have put a range they think may between $600 million and $1.8 billion for a potential fine. the justice department, the fines have largely been through investigations started under the obama era. lloyd blankfein was a supporter

of hillary clinton in the 2016 general election. does that make a difference on how the doj asked for to? -- torque -- acts toward it? the initial answer is no, but who knows. could there be a bigger fine than expected or more of an effect than they wish for, possible social. francine: alan katz there. coming up monday, we speak exclusively with a chief executive at 9:00 a.m. in london, 4:00 in new york. this is bloomberg. ♪

tom: this morning, the curve flattening, bitcoin is flattened. a weak stock market, nothing

more than global slowdown. areeillance exclusive, we eating thanksgiving leftovers until the g20 meeting. xisident trump and president will argue over who gets the last of the soybean free pie. in the siberian cold, the troops camped out. gru e been told, i want a bly. bloomberg surveillance adjacent to bloomingdale's and in london where they do not do black friday. francine lacqua. what is the equivalent in the united kingdom? francine: i'm sorry to contradict you. we do have black friday. it is an import. or fourhad it for three years and even hotels offer 20% discounts. maybe your discounts are bigger. the department stores are doing

it. i think almost everyone is. 20% i am offering a discount on my stuffing yesterday that went down in flames. total failure. never again do i cook. i am going to a restaurant. first word news. here is taylor. seekingtheresa may is support for her deal by going over the heads of politicians. may is appealing to voters directly in a radio session. -- arembers have made opposed to the plan agreed on by the government and the e.u. lawmakers will vote next month. china'st trump and president xi jinping have signaled they are ready for trade talks the leaders will talk at the group of 20 summit. wantsent trump says china to make a deal badly.

it knows the u.s. wants to resolve the dispute. president trump signed in order to close the border with mexico. he has authorized troops to use lethal force against people trying to enter the u.s. illegally. the president told reporters there are 500 criminals against the migrants -- among the migrants of the lead-in not offer proof. black friday, the official start of the holiday season and u.s. retailers are looking for it to be a law. says the industry is enjoying the strongest environment in his career. walmart and nordstrom has said online sales are surging. global news 24 hours a day and at tic toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm taylor riggs. this is "bloomberg." tom: thanks. how about a data check?

america was shut down yesterday for the food. futures -12 and they deteriorate. the curve is flattening. anything flatter would be news. bid, a huge get a move down. american oil, a 49 handle there. 60, that is the close on wednesday. west texas intermediate and bitcoin, under $4300 in search of the $3000 handle. on this: oil dropping oversupply heading for a seventh weekly loss. a look at chinese equities earlier. there are declines in asian technology making the brunt of it on concern the u.s. is ratcheting up a campaign against huawei. i am looking at the pound and

you can see the pound handing back danes after spain said it may vote against the brexit plan. the we are going to do black friday thing. a much under was very all day yesterday -- and much under was there all day yesterday with the parade. dra was there all day yesterday with the parade. the global wall street conversation of the day. needaribas them what you to know is he writes research notes that are untranslatable. you have got to be kidding? 19, 1.5 times levered off of .085 %. are we going up or down? >> we are going to have a more volatile market. a nonanswer from

greg today. the pros are hedging now like crazy. effective to hedge or do you put it in caching go to venice? greg: it is effective. ee ahink we are going to sisi sustained move higher. tom: you take the derivative instruments and you sell them to somebody else and bring in the income, which is higher than normal. i think i explained that halfway right. francine: you did a great job. greg, when you look at markets overall, this could be lack of volatility or people worrying about monetary policy. what are you concerned about? are we right to start pricing in

and of cycle? greg: i think the cycle is the key thing we are concerned about. had nines., we have years of strong growth and a favorable environment for equities. a think there could be slowdown next year at the same time as we see a pickup in interest costs and wage costs and that could cause a squeeze in corporate profitability. it could be a difficult environment for u.s. equities. francine: what does that mean for 2019? a repricing for equities? greg: that started in october. what we saw is the strong q3 earnings numbers but statements that came along with those which are more challenging. incould have a deterioration terms of the picture next year and that could drive a multiples compression for equities. tom: you have a spectacular

chart. you have a chart that shows the correlations are not what they were. we used to be a correlation regime different than now. explain to an older audience why the linkages of the market are so different than what we knew decades ago. greg: one of the big drivers has been inflation. we have been in this environment. that has led to decorrelated moves between equities and bonds. you are simplifying your portfolio has been effective. lateu look back, the 1970's when we had high inflation, that regime was different. tom: this goes to the success of bnp paribas. gdpguys have nailed the low

call. do you maintain that which means you get a low-inflation call with it? greg: yes, our view is that we are going to see growth slow but it does not mean we are going to see low-inflation beside them. wage growth -- one of the things that concerns us for the equity outlook is the potential for slower growth and signs of inflation, wage inflation. tom: how does someone with a k)1(k) that has become a 201 ( manage with more volatility? is the number-one one thing not to watch bloomberg? greg: i think the number one thing is to be more defensive in terms of portfolio. if we are going to have more volatility, you need to be more cognizant of the idea we're going to more accelerated period

s. you need to be careful about holding a lot of leverage. tom: greg with us. kelly clarkson singing in front and seven other country and western stars. jeff gennette was in the front well -- front row. we will get the view in the 9:00 hour. this is "bloomberg." ♪

taylor: i'm taylor riggs. let's get your business flash.

ghosn's removal as chairman of nissan is likely to lead to more problems. nissan will try to create a more equitable partnership with renault. the french automaker has more influence in nissan than nissan does in renault. oil is heading for seventh weekly loss. futures are down more than 3% in new york. saudi arabia signaling output may have reached a record. america's growing stockpiles have raised concerns about a supply glut. the cryptocurrency crash in 2018 is heading for its worst weekend. most of its peers are falling. the crypto index is down 25% this week, the worst five-day stretch since crypto mania pete in january. -- mania peaked in january.

to be onre beginning the g20 watch in buenos aires. we are going to get a briefing now. andreas, how is the city getting ready for this? everybody loves .0 cyrus. how does -- win the series. how does the city adapt? >> we have about 8000 people coming in including president trump, president xi, putin, mac ron. they have declared a holiday on friday of next week. ands going to be chaotic people are starting to leave the city. it is starting to add up to be a meeting that will not focus on the communique coming out, more on the summits on the side. tom: i have it on good account that the dinners served about

10:00 p.m. and you get the desert about 1:00. is the cycle going to shift to an argentinian cycle? andres: i am sure there are quite a few social events set up. when you look at the g20, how much focus will be on the u.s.-china trade and how much will be focused on the stuff we do not know about, cybersecurity. according to a report, the u.s. trying to get their allies not to buy chinese products. andres: there is going to be this one summit between trump going to behat is one of the most important ones. they will be talking about trade, protectionism, the tariffs.

that warning not to deal with huawei will be far up. this is the shift in the g20 we are seeing which is not so much the focus on communique but on the side meetings. we heard that the crown prince of saudi arabia wants to meet with the turkish prime minister and start discussing the killing and aftermath. people are going to be focused on that while the government is going to be focused on, can we hammer out a document that talks about trade protection, protects the old global world order and discusses the world economy. francine: do we still talk about currency wars? andres: there is not that much talk. it is the anniversary of the financial crisis and the aftermath of that, there was a discussion of the currency wars and statements used to have

market influence. today, there is difficulty to agree on the worst like protectionism, multilateralism. the u.s. does not want those words. view thathe european tends to want to protect that world order. will there be a statement like there was at the meetings earlier in the year? thank you so much. aires.st view of buenos bloomberg will have our full team reporting. great with us. there is a consensus nothing is going to happen and there is going to be disappointment. do you share that view and how do you frame an investment strategy? greg: it is difficult to call the spirit will -- call these. markets have been volatile around these.

em markets have come under pressure. there is potential for relief if we get positive headlines. tom: what part of em? em?sia how you play greg: around the g20, we will be thinking tactically. bute will be broader em china specifically could respond. tom: greg with us from bnp paribas. i want to emphasize we will look at black friday and government in washington. up, a conversation on the profits of america, steven wieting of citigroup. we will do that on bloomberg radio. this is "bloomberg." ♪

tom: it will be interesting in washington over the next days. good morning across america on this black friday, an important retail season. we will touch on that. about the politics of america, the ramifications of that election which seems a distant and moving forward, kevin cirilli watching so much

of what the president decides and chooses. in the united kingdom, there are choices. it can mean only one word, brexit. francine: brexit and pound. the pound rallied on the agreement put in place and how it is retracing some of the gains. we have do update you on brexit headlines. this is the spokesperson for the u.k. government saying the u.k. negotiated openly on gibraltar and that the divorce deal is not open for renegotiation. .et us bring in emma ross this goes on the back of what we heard from spain saying this was treacherous and we are not going to sign. let us forget domestic politics. is theresa may going to be able to get the deal signed? rkel is planning to go

to the summit. she thinks the issue can be solved. notel made clear she did want to do anymore negotiations. is i'me has been saying not going if it is not going to come in and out. that is a good indication it can be wrapped up. from the beginning, gibraltar had been sorted and here we are again. say the text was changed and they were not told. domestically, it is a useful fight. in december. it is worth bearing in mind this spain alone cannot veto this deal. look if one ofd

the members is oppose. , it the comments yesterday sounds like they are open to a fix. if the commission comes up with a document, it sounds like a fix is possible. francine: let us assume this goes smoothly. a resolution or a compromise between the u.k. and the e.u. the fight is domestically. what are the chances of theresa may having enough votes to get this through parliament? greg: if you look at the numbers -- emma: if you look at the numbers, it is hard to see the number of bodies you need. there were 80 who were either opposed or who would vote against it.

they said they had not decided yet. he put a smart question to theresa may about trade policy and he was not convinced by her response. strategy is going over the heads of lawmakers saying the people want this done. let us talk about something else. agendas andhow many people want to start talking about things they care about. tom: brilliant. are the british people listening to their prime minister? emma: i do not think it is clear yet in the polls that her message is getting across. it is worth remembering theresa may has been quite an this to politician when it comes to being in touch with the public mood. stute politician

when it comes to being in touch with the public mood. understood the referendum was about freedom of movement and control of immigration. what has come later has not followed on from that speech. i think people are fed up with political parlor games. francine: thank you so much. tom: greatly appreciate it. it is a black friday. retail in america. emma chandra at macy's. this is "bloomberg." ♪

i am a family man. i am a techie dad. i believe the best technology should feel effortless. like magic. at comcast, it's my job to develop, apps and tools that simplify your experience.

my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome. tom: bloomberg surveillance. good morning. francine and tom. there is news flow and it sits around oil, doesn't it? oil is moving.

isncine: it is moving and it because there are supply concerns, the fact there is oversupply. we did see brent touch below $60. i made you a chart. you can see the dissent of wti. it is the seventh weekly loss. tom: the seventh weekly loss, some acceleration to it. this will be globally changing if we get a 49 handle on west texas intermediate. with your friday briefing, here is taylor. hopes tohina says it meet the u.s. halfway on trade issues when president xi and president trump talk next week. that meeting is set for buenos aires. president trump says china wants to make a deal badly.

the bipartisan investigation into russian election meddling could stretch into the first half of next year, according to the senate intelligence chairman committee. it is unlikely you will see much progress. is pushing back against people who want former fbi -- former fbi director james comey said he is eager to answer questions from house republicans but not behind closed doors. comey has been subpoenaed to testify next month. he wants an open hearing because he has seen enough of selective leaking and distortion. comey is expected to be questioned about investigations into hillary clinton and russian election interference. the u.s. is urging allies not to use telecom equipment made by huawei. italy, germany, and japan are among the countries the u.s. has talked to. huawei has rejected suggestions it spies for china. global news 24 hours a day and at tic toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries.

i'm taylor riggs. this is "bloomberg." tom: thanks. a conversation on retail today. jeff can that will join us, of macy's, their chairman. right now, we wanted to take the woman from the united kingdom and give her american cold. , emma chandra, toughing it out. let me cut to the chasing get you in. on retail today, does the cold weather matter? will it mean diminished sales? it is freezing here outside macy's in new york. there are two sizes to the cold weather. there is the expectation that a lot might stay at home and shop online and there will be fewer people in stores.

i am told yesterday, there were long lines when the stores opened at 5:00 p.m. and they were saying it was busy through the evening. they are expecting it to pick up through the day. the cold weather means people might start spending more on winter apparel. thingan only be a good for retailers. tom: jumpers is lost in translation. emma: sweaters. tom: when you get out in front ette's, retail has done better recently? emma: retailers have been better when you look at performance year today. macy's has outperformed. investors have been pessimistic heading into this holiday weekend. plummet for shares

the likes of macy's and other stores. a little bit of concern following third-quarter earnings about how margins are being impacted by all retailers are doing as they invest online. when we talk about investing, that means spending and that cuts margins. investors will be looking at how this critical holiday weekend will be for retailers. we will not get a final read until next year. tom: please stay warm. layered out in two jumpers. emma chandra out front of macy's and that important interview, we will do that in the 9:00 hour. we migrate over to have an important conversation with joseph feldman, a senior research analyst.

joseph feldman, how are they merchandising what is the seem that is going to lead to better profit and less loss? events it seems like the are well-planned and they started a couple of weeks ago. we have seen promotions online ahead of the events. the electronics area that was among the targeted areas, toys is another. those categories are where retailers are spending time. i looked across the street at the gap store, down 50%. does america care about anything except price? joseph: prices a driver and it is again this season. some of the deals, there are good items to be had and a lot of this is planned, down 50% is plans, standard for what we saw

last year. you see a lot of the same types of promotions as you did one year ago. you take this seriously. category of retail offers the best profit opportunity in the next year? joseph: we think names like target, walmart, look solid heading into next year. they perform well in most consumer environments. you would see them as more defensive. they have done a good job with online businesses and continue to make profit on that side. those are two we like into next year. is the composition of sales on black friday changing? are we seeing more online? does it just increase every year to a point where no one goes into stores? joseph: it is a great point.

it is hard to tell when you walk into the store's. there is less traffic than a year ago and i feel like last year was less than the year before. there are online sales going on and digital processing. yesterday was up 30% online. i do not think we have reached that tipping point. what i have been surprised that is why are more stores trying to use in store only promotions to drive traffic to the stores? we could see more of that. i have seen one or two signal that but not as many as i thought. cheaper tosn't it sell online if it is on sale? joseph: it is easiest to get customers to the store because there is a rate that goes along with it. retailers supply

chain is set up right now is it is the most profitable to get people into the store. tom: how is luxury doing? is luxury overstocked and will luxury be as promotional? joseph: it is the one area where you do not see as many promotions. we are seeing decent trends. i know the swiss watch data has been better lately. some of the luxury good retailers have done well. tiffany was set up to have a pretty good season. there are pockets where there could be strength. tom: thank you so much. all i've got to say is i have an otega vinata.ys b

francine: do not come home without it. tom: thank you for that. great bottle -- greg koutle with us. matthew shay of the national retail federation. it is cold in washington, either republican or democrat. ♪

taylor: dolce & gabbana has said

the aftermath of the scandal is costly. major commerce sites have defended the sale of products in china. the fashion house posted an ad of a chinese model struggling to italianan -- to eat food with chopsticks. goldman sachs's former ceo held a meeting in 2012 with the malaysian financier alleged to be at the center of the scandal. that follows a new york times report that federal prosecutors are looking into the meeting as part of a criminal investigation. it may seek a full refund for the fees paid to goldman. apple is going to court next week that it hikes up its rates. onlyupreme court has ruled

purchasers of a product and collect damages for overpricing. that is your business flash. tom: a correction. whoville.rth of it is not just republicans and democrats freezing in washington. ndents are also freezing. we thank you for that. greg with us of bnp paribas who looks at the linkage into the american economy. back to basics. what is the correlation of the markets into bonds, into commodities? greg: one of the things we saw in the october selloff is we did not see a correlation across markets.

february was equity market centric event. we had a unwind. it was equity specific. tom: there is the -- what do you do? you do not work on the efficient frontier. is it 50-30? how do you see? greg: you have to be careful of leverage. how can hedge funds make money if they deliver? they cannot make their rate, right? greg: it is difficult. the volatility will throw up opportunities to trading. there could be more opportunities for long-short in the equity space. tom: you sound like a prime broker. are you going to hedge that out or bet short?

greg: there will be both. there will be opportunities to trade higher or lower. looking forward, there will be opportunities used to pick winners or losers. sectors will be more under pressure. francine: what do you think will be a good deal? individual companies depending on how they structure revenue or is it industries? greg: i think there will be themes across industries. we have been looking at specific cranes for corporate's -- specific screens for corporate that have less leverage. some of these will span across industries and there will be opportunities to look at individual stocks on that basis. thecine: where do you find most value in 2019? asia?in the u.s., in

greg: the most value is probably but the problem is the direction of travel. we spoke about the g20 and the headline risk from politics. there is long value. tom: i want to go into simple derivatives trade. if i am long in my retirement use your world to protect my downside or do i grin and bear it? greg: you can do both. the derivatives can improve the risk-adjusted returns. if we are going to of higher volatility next year, earnings and derivatives are one way to mitigate that. tom: if i go up and the derivatives become not

intelligent, how much up? 7%? where do i start losing on derivatives? greg: if you have no move at all, you are likely to lose. it is going to pay off when you have stress. when we talk about hedging, the expected returns are negative but they will help you out in extremes. tom: i am in a panic over oil. how do i hedge? greg: one of the issues we see is what does it mean for the broader outlook question mark -- outlook? they do not say something good for the broader outlook. looking at u.s. equity markets and having a more cautious view is how i would express that. francine: thank you so much. getting some breaking news out of the e.u. this is on the standoff between spain and the u.k. when it comes

to the wording of the relationship with gibraltar. sherpas -- are they a civil servant -- they undertake the work prior to a summit conference. the leaders are showing up, including angela merkel and theresa may this weekend. they need to find a way to resolve this impasse because spain says they were not happy about how gibraltar was worded in this agreement. coming up on monday from the climate finance day, we have exclusive conversations. we will talk banks with oudea.ck rode this is bloomberg. ♪

francine: this is bloomberg surveillance. tom and francine from london and

new york. , london gets old here headquarters. just voted the most sustainable office building in the world. tom: very good and it is gorgeous. is a spectacular museum back to the roman times, worth stopping by to see that. it is very good. on this black friday, on retail, bloomberg retail columnists join us. all thising and within is the optimism out there. i hear report after report, better than good season. do i daresay it will be a record season? sarah: i am not sure it will be a record but it will be strong. consumer sentiment is high, unemployment is low and these

third-quarter earnings results and while there was concerned about profitability, in terms of shopper enthusiasm, they are out in force. all of these things have moment to him. i did the manhattan wonder for winter coats with the call we have seen and i was thunderstruck at how people are out of stock. is that going to be the phrase, are they going to be short across everything? sarah: they had better hope not. retailers talking about fixing their inventory strategy. on apparel, they are trying to buy closer to market, trying to make decisions 10 weeks before clothes are on shelves. they will be in stock. francine: what do people want to buy?

electricals, are they buying it with cash or credit? sarah: i think toys will be a big by this season. this season. expect to see retailers trying to have those in stock. electronics, this is always a big time of year. i was in a best buy last night and you can be sure television's were moving out that door. tom: greatly appreciate it. looking forward to the gifts this year. reg with us. it is a boom economy but the call has been a slowing economy. when?s the greg: we have seen that rotation.

we have seen tech underperforming. a lot of sectors will fall. selloff,e october utilities and consumer staples have been up. there have been sector rotation. francine: should we worry about debt worldwide? we are indebted and yet central banks are at record low levels of interest rates. could that turn ugly? greg: we should be worried. interest rates are rising. the fed are moving from qe to qt . there is the potential for that to bite at a time when we are expecting growth slowdown. tom: greatly appreciate it. he is with the mp para by. it seems like we -- bnp paribas.

it seems like we jumpstarted the discussion. ahave no idea high woodframe 40 year forward memo now. howcine: you talk about u.s.-china trade. we look at cybersecurity. to oil, politics, also european and italy and your retail shopping and sales. tom: we can continue on brexit. we will do that from our london offices, all of the united kingdom focused on that issue. stay with us. this is "bloomberg." ♪

david: nocturnal and treacherous

is how spain reacted to word of a draft elon brexit as the e.u. heads to a summit -- draft deal on brexit is the you had's to a summit to pull it together. to a summitu. heads to pull it together. ready, set, shop. the traditional start to the u.s. holiday season with experts predicting a surge to spending. welcome. i'm david westin with caroline hyde. brexit is so important. >> it is all-consuming here. focus is on, the whether the parliament will vote through this deal. david: it does not sound optimistic. caroline: the pound is losing optimism, down on the dt