mark: british prime minister theresa may today defended her brexit deal in the house of commons. she is facing a confidence vote that could throw british politics deeper into crisis and brexit further into doubt. the premise are promised to fight for the leadership of her everythingng "with i got." finally got the numbers they needed to force a vote among conservative party lawmakers. what are the most vocal critics, jeremy corbyn, challenged her during the prime minister's questions. >> this house agrees a program

motion, this has agreed for five days of debate, this has agreed when the vote was going to take place -- the government has tried to unilaterally pull that and deny this house, deny this has the chance of a vote on this crucial matter. the prime minister and her government have already been found to be in contempt of parliament. her behavior today is contemptuous of this parliament. mark: -- >> he should be honest about his decisions. he could not care less about brexit. what he wants to do is bring down the government, create uncertainty, further division and crack our economy. andbiggest threat to people to this country is not leaving corbyn it is a government. mark: if she does when the

confidence vote, there cannot be another challenge for you year. if she loses, she must resign and a party leadership contest will be held in which she is barred from running. all other conservative lawmakers can run. briefed houseor leaders today on the killing of jamal khashoggi. this came as the senate prepared for a possible vote on two resolutions that would condemn saudi arabia for its role in the slaying. adam schiff, the incoming chairman on the house intelligence committee, told reporters that next year his panel will conduct what he described as a deep dive on saudi arabia. >> we have historically been the champions of democracy and human rights, to a degree that the administration continues to make common cause with autocrats, make a common cause with those that would create -- commit premeditated murder of journalists, it undermines our historical -- our history.

and because we do not have a champion of democracy in the oval office, all of us in congress have to take up that responsibility. mark: u.s. intelligence officials have concluded that the saudi crown prince must have at least known about the plot to kill jamal khashoggi. but president trump has been reluctant to pin blame. global news 24 hours a day, online and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. ♪ scarlet: live pictures of westminster as we wait on the results of a critical confidence vote that will determine the fate of theresa may.

we looking for an eye on the results of when they cross. i'm scarlet fu. caroline: caroline: i'm caroline hyde. it has been a risk on mood today. coming off of our highs, most industry groups high on the s&p 500 with consumer discretionary leading the charge, on the downside real estate. and we are up almost 30% since. the last two months more optimism in this particular company, despite moment and being out of vogue, deutsche bank is up. and we are tracking this at the moment. scoop that back of a we could see the german government trying to fix aeutsche bank, offering an m& -- but we we are keeping an eye on assets. scarlet: a price discovery vehicle for u.k. stocks in

london. a a lot of green. with theoss the globe, world index up by 1.4%. under armour is down after the company gave its five-year growth outlook. the investors do not appear to like it right now. caroline: certainly not. let's go back to the top story, we are tracking the pound, we are tracking what guy johnson has to say outside of westminster. as you have been saying, this really is almost the sideshow, a distraction from the importer meeting that if she wins theresa may will have to have with the european union tomorrow. guy: absolutely. she now needs to find a way out of the situation she found herself in, but ultimately resulted in her pulling the votes on the brexit deal that she was hoping it would automatically be the one that takes the u.k. out of the eu. if she wins today by a decent

majority, that could give her more credibility with the eu leaders. there have been hints out of the eu that may be there is a little bit of wiggle room, but not much. the mp's ours adjusting that what she needs to do is go to the eu leaders and to say, i need either a time-limited brexit back stop, which is the issue that relates to northern ireland and a harder border, and it needs to be time-limited, or the u.k. needs to be able to unilaterally opt out of that backstop. if she can achieve that, she might be able to get the vote through. if not, she finds herself added impasse with the house of commons. a little bit of a sideshow today. it may have a marginal impact on her ability to be able to generate that outcome. scarlet: you say the impact on her ability to generate that outcome with eu leaders -- if she wins big, what does it do to support in parliament over all?

will it change the way they will vote for the brexit deal as it is currently written? guy: it is hard to see how that is the reality of the situation. because it was only days ago that effectively she did the mathematics in the house of commons and concluded she did not have the votes to make that happen. today's vote may be about the fact nobody wants the job right now, and if they did the timing is very short, and actually the arithmetic surrounding any deal that would be done still is at an impasse. there does not seem to be a majority in the house of commons, so any outcomes people are talking about, even if you change the leader that would not change. we are dealing with an internal tory party issue right now, but nevertheless if you step outside the tory party and into the wider chamber in the house of commons, the math does not change enough to allow a clear kind of decisive vote on one of those outcomes. i think you need to put both of

these, it is like a ven diagram, they do not overlap completely though. caroline: and the referendum called due to an internal conservative party issue, now we are two years down the line and is still debating the outcome of the referendum. i'm issued -- interested in tomorrow. she is going to the eu, and we are not getting good music out of the eu leaders throughout the course of the day. we willy are saying, not change the substance of this deal. and this is the position that theresa may finds herself in. i've had it suggested to me by conservative mp's that basically she is going to brussels to say, to her own mp's, i've tried and i have failed. so we have exhausted that line of inquiry. if she can achieve something on the backstop, maybe the math changes. if cannot achieve anything on the backstop, then i think she finds herself in a situation

where she says, i tried, now we need to find another solution. we need to look at different options. that is when the issue of maybe a second referendum comes into play. and all those other options we have talked about. but she has rolled out those options up until now, some good because she knows that she may need to further down the road. and if she wants any hope of getting her current deal over the line, she cannot put them on the table yet. maybe that is the point they get put on the table. treat that wetion now face in the u.k. is a very complicated one, and i am not sure that the vote today within the conservative party is going to make it less complicated. scarlet: it sounds like a lot at the moment, much driven by optics. guy johnson, thank you for your take and for staying late for us. we looking to posted. live shots of the houses of westminster. the decision is coming up any moment. anytime: we understand

before 4:00 p.m. in new york, 9:00 p.m. london from new york and london, this is bloomberg. ♪

caroline: we continue to track the movements at of westminster, where there was a secret ballot today taken on the future, to dictate the future of theresa may, whether she will remain the leader of her conservative party and indeed the leader of the country. we are up 1.2% on the bridge pound, because many feel that she will overcome this hurdle. the question is, what then of the votes and future of the brexit deal? scarlet: she will adjust that by going back to europe to negotiate or consult with european leaders to see how much room they will give her on the irish backstop. obviously, epic news out of europe. we are waiting on the fate of theresa may. there is also emmanuel macron

announcing plans that would swell the deficit of the country to appease protesters. and the italian government reducing their plan -- budget by half a percent. how are investors positioned? our etf analyst attracts etf flows and gives us an idea. in the u.s. come everybody is trying to be defensively positioned. what does it look like in europe? >> in europe, people, especially u.s. investors, are you leaving european etf's. nine straight months of outflows. they are down about 15%. they had a good run after brexit, but they are down and it so we see a ton of outflows. that is a chart of assets in europe that would be invested in by the locals there.there is pressure on those funds locally as well, but the u.s. a view of european equities is not good. i will say that today, if you look out people are interpreting this vote, ewu, the single always go toetf, i

that level because the details -- the volume is double. it is up a bit. people are interpreting and it positively for now. but the volume is $100 million, that is one fourth of the day after brexit. we are not talking about a frenzy. and there is an uptick in a little-known pound etf in the u.s. the only way to get exposure to the pound is through an etf. that pops around anything involving brexit. but you would go along that if you thought there was going to be good news, shortly it if you thought it was going to be bad. caroline: what have people been doing? >> the volume only shows action, but we will know in a couple days whether they went long or short. i would say that ew you, i would guess -- ewu, i would guess inflows. i that you will see those trickling in. scarlet: do flows always

correlate with price action? >> no, especially single country etf's. you will see people bet the other direction. sometimes, you will see people putting money into something while it is going down, because there is a lot more betting going on. it is only the retail products where you tend to find flows following performance, because retail has a habit of buying as it goes up. but when it comes to the single country etf's, you will find a lot more sophistication. there is also the cases where the etf could be going down and you see the inflows, but those are just people issuing new shares just to shorten them. heaper toually c create new shares. we saw that when president trump was elected. scarlet: you have to remember the mechanics. eric, thank you so much. and if you want more etf goodness, you will want to tune iq for discussions on

etf's, that is wednesdays at 1:00 p.m. new york time. we are awaiting the decision on what happens to the u.k. prime minister, theresa may. caroline: this is bloomberg. ♪

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caroline: this is countdown to "the close." scarlet: joining us is joe weisenthal, and we are looking at westminster, the houses of was mr. in london as we await the vote on theresa may's confidence, or confidence vote, but let's pay attention to the markets. t is a rally. caroline: it is not just count down to the close, it is caps on to the all-important confidence vote going on in west mister. joe, you have been looking at

resilience in the market, but also resilience of the british pound. joe: the would not have expected a this morning, when i got up at four clock a.m. a.m. -- caroline: when? joe: at 4:00 a.m. come i had to get up for a meeting, but i wouldn't have guessed we would have one of the biggest rallies in the pound. but you figure that she is likely to win it, although we do not know, maybe we are looking at a prime minister with a stronger hand to negotiate. i think it is interesting that we were off the highs earlier, but now we are solidly up and that has not faded. and we have seen so many days when we were thinking, today will be an update, that went red. but that did not happen today. tech is continuing to outperform. so this is a sort of confidence inspiring day in the markets. continues to

outperform, the nasdaq doing better than the other two indexes. chip companies up 1.7% as a group. autos have been the leaders. one way or another because of the tariff situation. caroline: and among all the pop and a ceremony and dramatics going on in the united kingdom, there is in poor news coming out. this between china and the united states. scarlet: and a lot of those defensive names, whether it is telecom services or utilities, they are coming down a little bit. they have been in favor for a while. it is exactly as described, we have been up, we have come down, but we are holding onto gains, unlike in previous sessions where we turned around completely. that has not happened yet. we are moments away from the u.s. close. let's take a deep dive into the action today with our market reporters. lisa, get us started. lisa: i was looking at real estate.

real estate investment trusts -- i want to look at if you are a pack rat and you need to take some stuff out of your home and put it into public storage. it has not done so hot. that includes a some of the storage facilities, as you can see, down 2.7% as we head toward the close. simon property group, that overseas malls, that is also down quite considerably. yields ticking up higher in the u.s. higher borrowing costs taking the wind out of the sails. and if you look at the bloomberg real estate investment trusts index, you can see it had its biggest one-day decline in about a month and a half today. so a lot of pain the built into these housing related sectors, as rates kind of creepy little bit higher and the u.s. government continues to sell debt. abigail: another laggard, verizon trading lower, the worst for the dow. and this is morgan stanley , downgradingares

it from an outperform. growth of 1% on the bottom line next year, flat revenues, that does not excite them. they are neutral. the stock's price to a premium, and that shows in the chart. here is a rare thing, a bullish chart. we have had so many that are sideways, but this is a greater than six month chart at verizon and take a look at the uptrend, clearly outperforming the major average. we see the uptrend in blue, buyers in control. and take a look at this, holding its 50 day moving average. the 200 day is not shown. this is the degree to which investors really like a this. if it breaks up the 200 day moving average, maybe they want to because it's, but with a 4.2% dividend yield and the uptrend, verizon is looking interesting, even with a downgrade on the day. taylor: i'm taking a look at shares of under armour, the

worst performer in the s&p 500 today. the biggest one-day decline going back about 13 months. all this as they forecast negative revenue growth in the single digits through 2020, then low single-digit revenue growth through 2023. analysts think they will miss their profit target. and you have to see the single-digit growth in north america and internationally to get this target met. and you can see on the chart, under armour is not getting it done. a lot of it, some of it has to do with trade, as you can see. we have where their production is. a plot of this is looking at where they will move production, in part because of tariffs. will beproduction units down to just 7% in five years. and that is at 18% right now. they will be boosting production in indonesia and vietnam, dropping production in the americas. so tariffs are something to

watch, along with the idiosyncratic risks going on within under armour itself. caroline: thank you, entire team. the return to risk on, or is it? u.s. stocks rally on trade optimism. for more we will bring in our reporter. we have been on the edge of our seats with a confidence vote in the united kingdom, but back home in the u.s. it has been some momentum at times with twitter up. >> we have seen some nice gains in twitter, as we did yesterday, but throughout the day we have really think tech leading, as well as amazon's consumer discretionary, and at the bottom we have staples. in a way it looks like what we are accustomed -- were accustomed to in the beginning of the year. we had some positive steps on the trade front. we also had -- this morning, which is some classified as goldilocks. we have faded a bit throughout the day, but it is still nice

today. joe: why have we seen this toward the momentum names? even on the down days, some of those names have outperformed, or at least tech has outperformed, so is it something with positioning? why do you think people are nibbling at those again? >> this could be a sign that maybe people are finally feeling like it is time to get back in. some people pointing out that although people have been hoping for a santa claus rally, the last two weeks are typically good seasonally, but also we have seen other risky areas of the market and i was also watching the most shorted companies, those with weak balance sheets, also the ipo etf's, these are all areas with nice gains today. anywhere you would classify as risk we have seen a boost, today. scarlet: stick with us, we have about 2.5 minutes to go until the close. we will bring in a chief investment officer. david, good to see you. >> nice to be here.

scarlet: talk about how you would characterize the price action today. we rallied at the start. we have given up advances, but we have managed to hold on. pretty resilient. >> we have scared out a lot of people. we had a lot of red on the tape for a while. they are exhausted. and along comes a change in narrative, the fed is a little less risk -- i would not say adverse, we do not know what the fed will do, but it looks like it will ease. the market thinks so. and china trade, maybe the messaging is getting better. and this whole experience with arresting people in canada and detaining people in china is an open question, i do not think we know enough about it yet. caroline: have you been seeing people putting more money into cash, people getting in from the sidelines, and what sectors are they most attracted to?

what would you be attracted to? >> we are nearly fully invested in the selloff. we started to scale in and accounts are invested. we like to help in the u.s. we like the u.s. we think the less of the world is more of a mess and then we are. maybe that is a better way to put it. [laughter] caroline: breaking news. returning to westminster as we understand that we will hear the votes coming from the no-confidence vote called on theresa may. they voted today, it has been a swift 24 hours, starting late last night. and now we will be hearing from those gathered in the room, the results of course. scarlet: they appear lighthearted, given what we have seen with the gravity of the situation. >> >> i would like to thank the [ruckus]lped

and charles walker. the results of the ballot held this evening is the parliamentary party does have confidence. [cheering] [applause] >> does have confidence as leader of the conservative party.

the number of votes cast in favor of having competence -- confidence in theresa may was 200 and against was 117. under the rule set out in the constitution of the conservative party, no further votes can take place. [cheers] [applause] >> he's the head of the 1922 committee who had gathered letters of 48 people that wanted to call a confidence vote in theresa may with the results that it was 200 in her favor and 117 against. have yet to hear from theresa

may who will remain as u.k. prime minister. no other confidence vote can be called against her, by her own party for 12 months. the question is whether there is a no-confidence vote called in the government itself. scarlet: perhaps the labour party might do so. we need to stress this was the conservative party that voted for her. he said nothing to do with the entire parliament and does not change the calculus. joe: it might benefit her because they cannot call another vote for a year so she has a room, breathing notwithstanding the possible collapse of parliamentary wide vote on her leadership. she survived. caroline: she survived but the pound is coming off of its highs . let's get more with our next guest joining us now from westminster. me, don't have a guest with

but i have a little bit of an analysis, caroline. maybe why the pound is coming down is that we get back to the main business of the brexit debate, which is whether or not theresa may can get her deal through the house of commons. the fact that 117 voted against her, i think that is an indication she will continue to find that incredibly tough. i think that is something a lot of people take away from this. now that we have dealt with the fact that theresa may's leadership is secure for another year, we now have to get back to the deal over the line. the fact that so many mps felt they could vote against her, it is indicative she will really struggle when it comes to bringing that vote to the house of commons and getting her brexit deal over the line. more people will focus on maybe that will

secure a little bit of ground when it comes to the backstop of ireland. if she cannot do that, nothing really changed from where we were 24 hours ago. to joe's point, he was surprised given the news first thing in the morning to now, the pound has rallied. the previous day, it drops so much because theresa may had to withdraw the bochy was expected to call on tuesday. that is still the reality of the situation for theresa may. against teresa mo votesontext -- put 100 17 -- 117 votes against theresa may into context. >> that is 117 votes against theresa may's ongoing leadership ongoing leadership

of the conservative party. those are people on the brexit side of the party who still believe that the direction she is taken is the wrong one and, as a result of which, they will not support her. it you have to assume -- that is a big enough number to mean she will not get her brexit vote over the line. to get heard brexit deal over the line in the house of commons. that is the indication we are getting here. there is still sizable disappointment on where the process is. may has to geta back on track tomorrow with trying to convince europe to give some way. how much room are european leaders likely to give now that this boat is out of the way -- vote is out of the way. does it change how they vote in any way? >> i think it does. many european leaders expected this would be something that would happen. that we would see a lot of crisis in westminster -- need a

lot of crisis in westminster to get us to the point where we get to the final deal between the eu and eu k. there is an expectation that maybe a little bit of ground would be good. whether they are prepared to give enough ground on the issue of the iris backstop and the critical area here is the fact u.k. is not locked into a customs union with the eu. outu.k. needs to have a way of the backstop that it can exercise unilaterally, so it is not locked in in a permanent way. that is the advice the attorney general gave to the cabinet. he suggested that would be the case. she needs to achieve that. i think achieving that will be difficult. caroline: and we are hearing from one of her opponents from the r.g. -- the erg.

he says this is a terrible result for the prime minister, the 200 votes for her and 117 against. we're looking at live pictures of the home of the prime minister and she remains that for now. where do we go from here? you talked about what she wants to get from eu leaders. what about where we see the opponents coming into play here? there's a question whether we could see a vote of no-confidence at large against the government as it stands. what is still the various elements that play here that the market in great british trying to factor in a the moment? far, jerry corbyn has not felt he has the numbers to call a parliamentary vote of no-confidence. getting another general election , which is what he would like,

would be difficult at this stage. not getesa may can her deal done or can't bring into the house, that may provide b, the brexitan leadership within the labour -- heleading the brexit has suggested that may generate a referendum outcome. if parliament finds itself unable to find a majority for any of the possible outcomes whether it be a no deal brexit, a deal that theresa may is putting forward, or any other outcomes, it may be decided they have to go back to the british. we may get there but we don't know yet where that -- how that process will happen. at the moment, the labour party find it difficult to get the numbers to generate that outcome. the whole house of commons is glued up because it does not

have an outcome everybody can coalesce around. scarlet: nobody agrees on anything. i like the way you put it. gummed up, glued up. one thing we do know is theresa may will not be standing in the next election. it may be that led to her remaining as prime minister in the confidence vote. what does it do for her ability to lead the party, her influence, her standing with members of her party? short-term, it has allowed her to not be challenged and therefore have a little more latitude. in the long-term, it weakens her. it's clear she will not surprised -- survive as prime minister for much longer. stronger emerge

short-term, she is weaker as a result of this process. it will also start the process that others will be thinking about whether or not they want to make a challenge, and as a result of which, could provide a little bit more friction between thatf those various mps would like to take over as prime minister. the campaigning can begin in earnest. still with us is david from cumberland advisors. what is your take? >> i don't know how you craft long-term investment structures or policies with this mess. i will use this word mass. -- mess. you don't have outcomes, predictability. what do you do for your

financial firm? do you move from london? where do you go? to move to paris? i'm not so sure anymore. the investment climate is not good and not good throughout europe. there is no prospect for improvement. i would say the best award should go to guy johnson for having a 27 hour day. joe: it's impressive what he is doing. about been thinking a lot the question that you have been saying. looking across europe, every day seems to bring something new with europe. everyday there is a new government collapsing, new riots, new budget, testing the rules. how does anyone invest for the long-term? set up a new office in these conditions? david: i think that gets more complicated. when you look at the european union and the european central bank and you say, it's will be

two years -- it will be two years before they get to zero from a minus number let alone normalized finance. you have a finance structure that is wounded. you have internal trade within a trade union called the european community, which is wounded. youhe midst of all of this, have all of the play and the rest of the world. u.s., china, and all of the things we talk about. an operating entrepreneurial business man, and i had to make a decision on a decision on the capital expenditure, i would not wait. wherever i could defer, i would wait. caroline: after the ramifications of 2016 vote, because of the punch in the well, it did pretty because these companies are very globally oriented companies. do you overlook where their headquarters are if, like shell,

bp, a lot of these companies are more exposed to the global economy as a whole rather than where they are based? david: i think you have to in the times we are in. in the old days, you looked at chill and bigs on and said there was no difference between the two companies besides the headquarters location. this world is little more and moreected difficult. headquarters don't mean a lot in certain industries of business. in finance, when you move from london to europe, that is big. joe: i want to go back out to you, guy. it is interesting looking at the u.k. economic data. it is not like it has fallen off a cliff. for all of the uncertainty around brexit and the chaos in parliament, the economy seems to be doing well. when you talk to people in and guests and people

on tv, what do they say about the anxiety of uncertainty rising because of all of this? guy: in some ways, brexit has not happened yet. at the moment, businesses are focused on the eu. for the moment they are still in the single market. the economic effect is a gradual one. on u.k. did not leave the eu the day after the referendum results. these companies are still operating in the same way they were before. it's what you are now starting to see in the data starting to reflect this. you can see it in the housing and manufacturing data. there is a slow creep beginning to come into the numbers. has affected much more like what is happening here at westminster. what i would say is at the moment, we don't know what the outcome is going to look like. it is hard for companies to

change their behavior. the behavior will change, but it has not yet. that's why there has not been this instant impact in the british economy. scarlet: so you can companies have not had to change their favor gets because brexit has not happened, but u.s. companies don't necessarily need to invest in europe because they don't see visibility. lookthat make the u.s. better by comparison? we have our own problems. look at the trade rhetoric and everything else happening here. in contrast, the u.s. looks stable. david: i agree. whether we are least or worst, or best, we emerge to the top of the list. i like the u.s. markets, the u.s. stock market. we don't have a recession. we have a slowdown. togethert the pieces and you say, ok, suppose we had -- 2%-two5 growth

2.5% growth, what is wrong with that? there's nothing wrong with that. take some pressure off the federal reserve. we have 150 million people working in the united states. there's a positive story about the u.s. that distinguishes it. most of what we do is self-contained. i don't like the trade war. launched with one thing in mind. sayingber peter navarro this will be fast, they will respond, there won't be retaliatory tariffs. what happened? that forecasted not go well, peter. caroline: i want to get your take on amidst all of these geopolitical risks, it's interesting we have not seen volatility in potentially what we thought it would do.

if you look at volatility of the vix, that is near relative lows. why are people not hedging more? david: i can take the other side of the question. we had fixed at 10 day after day. people were seduced into believing it's was going to was going to be forever. at the same time, we come off 10 years of the zero interest rates. that distorted so much that, look at the conversation we're having today. 2% cash. class.n asset when was the first time you heard that, it has been a long time. we are seeing now is returned to normal. it is going to be more and more one and 2% swings in market prices. we are going to see more and more prices about -- questions about bond markets.

a quick example, if i have time for one, o'hare airport, a good , by itself a single a credit, aa because it was insured by assured guaranty which you report on, comes to 422 yield long, u.s.ree on the day treasury is 100 plus basis points lower in yield. last time i checked, it was taxable. explain the anomaly in the markets. this crazy stuff is going on. you can also take advantage of it. we bought o'hare's for our client. caroline: great to have you here and your perspective on a day like today. talking of swings, we are looking at the british pound

holding onto gains. we are also off highs. we are currently trading at one 1.2608.608 -- 117 votes were cast against her. let's get back to westminster. guy johnson, this time you have a guest standing by. guy: i do. thank you very much for joining us. you have voted against theresa may, life? >> i can't see -- why? >> i can't see how we get out of these problems without the new prime minister. we decided to trigger the process that would allow the newervative party to have a leadership election. my colleagues have decided against that. not incredibly decisively. 117 of my colleagues expressed in theresa may.

administration that looks more tenuous than before. all the problems we were so that theout, coalition itself does not have authority to govern, all of those problems remain. now, what happened to the labour party put down a vote of no-confidence against theresa may and we choose not to support it or to support that vote, we would lose. guy: there are a number of issues you have raised within that. first of all, the deal that she had hoped to bring to the house of commons. 117 mps voting against her, that singles effectively -- signals effectively she will not get the deal and its current structure at all. bernard: if she brought back a deal from brussels which says five the dup, i think a substantial part of the problem

in the conservative party could be addressed. thate brought back a deal does not satisfy the dup, even if every conservative votes for it, it won't go through. guy: that is the arithmetic we currently find ourselves with. -thetill need the dup - conservative party still needs the dup to get it over the line. 52% of the people represents such a big change in terms of what people thought. the country wants to leave. they were so scared by the referendum result, campaign that they still voted to leave. that 52% is not represented in the house of commons. what we are dealing with his ministers and opposition parties who are trying to frustrate brexit.

believe wheezing the union is bad for this country. the british people voted leave. us who extent, those of invited the party to have this probably a lot of us voted no-confidence on the prime minister, we represent the 52%. they are not going to go away. i guess we can guess -- guy: i guess we can debate what represents mean, but we will come back to that another time. bernard: that's a deep question. guy: let's talk about what would get -- what would satisfy the dup? bernard: they want the backstop in any form. they don't want the u.k. to be evading any backstop of this nature because it increases the republic of ireland -- sorry, fromern ireland different

the united kingdom to the extent it contemplates having customs compliance checks on the irish seaports between gb and northern ireland. northern ireland would still have all the eu's regulation and of rest would have only part regulation. this is unnecessary. can have custom compliance checks away from the irish seaports, you can have customs compliance checks away from the frontier. you can run a customs frontier in northern ireland like a tunnel. all of their custom compliance checks from northern italy into switzerland, they are all done away -- iw -- done beg your pardon, i've got my geography wrong. it is between france and

switzerland. guy: let's move away from geography for just a moment. about whatlittle bit happens next. -- there is a little bit of wriggle room -- wiggle room and not the kind of wiggle room you are talking about. possible, how do we move forward from where we are now? bernard: that's a good question because it means the dup will not be lending their support to the conservatives who don't have a majority in the house of commons. what i see coming now at some stage is a vote of no-confidence in the government. that is quite serious.

the premise or could not continue in office if a no-confidence vote was passed. caroline: according to wikipedia, the tunnel is connecting southwest france totally -- to italy. let's have a check on the market assets. or votes cast in her favor againstere 200 and theresa may were 117. i want to welcome romaine bostick to the clan. "what'd you miss?" is a confidence vote. romaine: the reaction in the pound was interesting. the fact that it is holding onto gains that we had from earlier

is sort of a good sign that the market is not completely freaked out. we are kind of in a strange time for the market. joe: i think it's worth pointing out, since we are talking about the pound, how mediocre and uninspiring the end of the u.s. cash trading was. ,&p closing up half a percent well off of the highs from earlier in the day. romaine: when was the last time we had a strong rally? joe: it really sustained itself. [over talk] caroline: we managed to reverse the declines. the reversal is the story of the week. romaine: i think it shows you to the type of people in the market in terms of day-to-day trading. caroline: it will be interesting how it plays out for risk on or risk off tomorrow. we all revert to the main story on whether or not theresa may can get her deal through parliament. she goes to the eu tomorrow and

they are not changing. joe: i love the brexit story so much, and i would talk about it all day. the question of whether anyone who is trading u.s. assets or anywhere outside of the u.k. cares about it, like would it affect other markets, is to be determined. romaine: definitely. didthing interesting is, anything really changed? at the end of the day, the worst case scenario was a no-confidence vote. we are now where we were tuesday. caroline: and with the rest of the market is caring about is u.s.-china. joe: the u.s. china fed. caroline: we now have more u.k. focused news. let's go to theresa may. >> i'm grateful for that support. a significant number of colleagues did cast a vote against me, and i have listened to what they have said. we now need to get on with the job of delivering brexit for the british people and building a better future for this country.

a brexit that delivers on the .otes the people gave that brings back control of our money, borders, and laws. that protects jobs and security in the union. one that brings back the country together rather than entrenching division. int will start here westminster with politicians on all sides coming together and acting in the national interest. for my part, i have heard with the house has said about the northern ireland backstop. when i go to the eu council tomorrow -- the european council tomorrow, i will be seeking that will wage the concerns member of parliament have on that issue. while delivering brexit is important, we also need to focus on the other issues that people feel vital to them. we came intoat politics to deal with.

building a stronger economy, delivering first-class public services, building the homes families need. we know it to the people who put us here, and put their priorities first. here is our renewed mission. delivering the brexit that the people voted for, bringing the country back together, and building a country that truly works for everyone. how are you getting your brexit deal through? caroline: that was theresa may. a question being thrown to the direction of her, can you get your brexit deal through? that's the key question. we are back to where we started as you mentioned, romaine. today was a sideshow. she managed to put off the issue within her own party, but the main issue is now whether the vote she can get through -- both can get through parliament. romaine: she has to try to extract some concessions hoping

not to change the document currently in parliament. joe: no one in the eu seems to be inclined for any change to that agreement. caroline: digging in their heels almost. let's get a perspective from a sitting empty right now. walker with us right now live from westminster. thank you for joining us. what do you think the impact is of 117 votes cast against prime minister theresa may in her own party? robin: i think what is striking about this is that it was a more emphatic victory for the prime minister, even than the one when she won the leadership of the policy. i think that shows the policy is behind her and can unite around her. i think this does not make a difference. there have been those that said there was some kind of solid

majority that wanted a clean brexit with no deal at all. what we have seen is that people want to see a deal done. i've been contacted by hundreds of constituents saying they want to see the prime minister see this process through, and to make sure that she brings a deal back to the country that the whole country can get behind. i think it was good to see from her conversation outside number 10 there, was the willingness to deliver the right outcome of this. that is what we now need to ensure we can do. the assurances from brussels are important ones. she was clear this is not about aboutcal wording but the backstop. joe: the ultimately -- ultimately the key question -- we saw the 117 votes and the selloff in the pound, there is always that she survived, but if

you are thinking about getting a bill passed, 117 votes in the prime minister's own party is difficult. you think there will be ultimately something that theresa may can extract still from the eu partners, some sort that they can move a significant number of votes back to her camp? robin: i do think that. aboute had this question whether the prime minister has support of the party. does people who say she not have to except she does. we all have to move forward on this. some of the confusion of the events that happened today is about people's views on whether she is the right person to take us into the next general election. the prime minister has been clear she will see the process of brexit through, and she does not expect to leave the party in 2022. -- lead the party and 2022.

-- in 2022. i think that puts focus. but my lectures have been saying to me today is that we don't want to see politics in this. we want to see you delivering. that is what parliament and the conservative party need to focus on doing. romaine: speaking of your constituency, theresa may did say it was now time to start acting in the national interest. is there actually consensus on what is in the national interest of the u.k.? robin: there has always been a huge range of views on our relationship with the european union, but what is the consensus for my constituents is that they want us to get on with the process. people want to see their votes delivered on the outcome. many people who voted to remain except the votes of the referendum and except that we are leaving the referendum. -- leaving with the best deal possible.

we need to make sure our country gets the best deal possible. one of the extraordinary things is the fact that we were told at the beginning of the process we eu toknow -- not get the allow us to leave. theow have that through withdrawal agreement to get a really good trade deal for the u.k. as we move forward. crucially one that allows us to be in control of our laws, money, and borders. ifoline: can we move forward there are no concessions granted from eu leaders? what if they come back from the summit being held tomorrow with no help in terms of a change to the backstop? is there a risk we will see a second referendum or another election? it's been clear throughout the process that

parliamentary arithmetic is challenging. eu has a lot of experience with difficult negotiations and being able to provide details and legal assurances to negotiating parties. we have seen that in some of the negotiations they have had with switzerland. i think, fundamentally, we have to look at where country's interests are. this is a point that geoffrey cox made. it's not in the interest of the -- backstopback top to be enforced for long period of time because it cuts across the freedoms they are supposed to serve and protect as part of the single market. joe: when you look back at the course of an extraordinary day, how significant was today's prime minister's questions, and

watching theresa may in front of chaos corbyn and that if would cause another election that jeremy corbyn could be the next p.m.. -- om. how much-- pm. how much has that influenced? robin: i think it certainly helped. it is something useful for our colleagues to remember is that we have a very serious and real threat to our economy in jeremy corbyn and a socialist labour party that want to take the party away from the economic model it has enjoyed for years. s.at is something in mind we need to secure an outcome that ensures we do not do down that road. performancen's weak, and that also gave the prime minister an .pportunity to unite the party

the question will remain whether jeremy corbyn decides to put down a vote of confidence and self. i'm confident we can overcome that and defeat that -- himself. i'm confident we can overcome that and defeat that. theresa may needs to reach out and to ensure constituents will continue to support our government moving forward. that is why the assurances are crucially important. caroline: and we are getting more transparency on that at the uu summit -- at the eu summit. robin walker, thank you very much indeed for your time in inside. let's check in on what is happening to u.k. assets. the pound has been steadily on the incline. highst some of its heavy on the back of the 117 votes cast against theresa may. nevertheless, it is up.

we saw a risk on sentiment across u.k. assets in the hope she would win this vote of no-confidence, as she has done we have seen yields come down. we saw movement into u.k. equities. theresa may winning the contents of best conservative party vote, and remaining the leader. -- what do you make that he is looking toward inorrow's session of events terms of some sort of transparency of where the backstop goes? joe: i got any mail during that interview from our colleague, sebastian lloyd, pointing out that while robin said she increased her support within her party from the last vote, it was by one vote.

that's a massively expanded endorsement earlier. romaine: going from 199 to 200, but the market was pricing worse in terms of her margin. that it would be quite a few less. i don't know if this is a good or bad thing, but you have a leader in place, have a document , or people can vote on against, but it britain's goal is to move forward with brexit, this is a chance to do it. caroline: more insight from the and our bloomberg editor-in-chief, john. 200 votes for theresa may, is that a good or bad number, john? john: i think it is a bad number for her. i think she wanted it to be below 100. to get that high was worrying. she has won and we expect that to go into this.

most of us felt she would the minority that a poster would be fewer than a hundred. --gine your prime minister you are prime minister. one out of every three people you meet are opposed to you in your own party. it makes life difficult. she has a years grace -- year's grace. when does jeremy corbyn play his card, john? john: i think he will probably wait. golden rule is when the other side is messing up, you stay out of the way and see what happens. he's not in a rush. he will wait to see what theresa may gets out of europe, and he will presume it is not that much. it is not all bad news for may. you can imagine the scenario

where the brexiteers play their main cards and what could have happened was that may comes back with a deal that we are all certain parliament will vote down. maybe she comes back with another deal, they vote down again, and eventually somebody says maybe we should have a second referendum. then that becomes a more interesting struggle. maybe by triggering the leadership thing, which means she is certain to be there for the next year and less there is another big revolts, she has managed to push that off. romaine: how likely is that? in this brexit process, may has been clear about standing her ground. she has not been did as much as some folks would have liked her too. is there incentive for her to do that she hasn now the year to ride this out? john: she is not gotten many other cards to play. she said i won't fight in the

next election. that is something she brought out this time to get this vote through. there's not a lot be on that. it's probably the other way around. she does not have that much strength. the strength that she does have is that she deftly has another year and that should be enough to sort out brexit one way or another. it is a tough thing to have one third of your own party not particularly liking you. it's enough for her to continue, but does not help her. caroline: do you think the other 27 eu leaders will see this one third revolt, and throw her a bone here. maybe see some concession to get it through parliament? john: i think that is possible. europe hasom generally been "we won't tell you at this stage." "if there was a second referendum, we might give you something." i can't see them giving her anything massive, maybe a little bit to show she has done something. one of the problems in europe is

that they don't see this as the final moments. they are terrified if they give something to the british now, they will be back in january or february asking for more things. although that is the way in which the european union tends to negotiate with itself, it is now negotiating with someone who wants to divorce them. wouldg concession probably wait for a second referendum. there are enough people in the eu that think that is a possibility, possibly rightly. joe: does the more hard-core notiteers, other than liking theresa may, have a vision for a deal that would be better for this one? john:[chuckles] the answer is vision. whichf them have a vision is british happily outside of prosperous, union

happy, and free. britainple think if became a free trading paradise, that is possible, but it will take a bit of time because the problem of brexit, if it is a hard brexit, it is likely to become uncomfortable in the short-term. everyone agrees to that. you getrs say through the short-term, maybe they don't last as long, maybe all of these other things we warned about, and you get through that coming out at the other side at the same moment the eu is not doing well and everyone says look at britain, it was right to get out. that's the vision they have. the difficulty they have -- they have also not done brilliantly out of this. they have wounded her, but not done fantastically well. when they bring out all of this -- so strength, they did not have enough to bring her down.

romaine: is she getting help from the business community? how much lobbying are we getting from a lot of the businesses affected by the outcome of the exit, whether it is orderly or not? onn: the business community a whole has come out and said her deal is better than no deal. i think that is true. most people would not want something or all of the supply chains -- and this is particularly big business. small business takes a different view. if you run a restaurant somewhere, it is not quite a big deal. if you are a big car manufacturer or bank, those people tend to be saying let's back her deal because it will give us some certainty about the way it is going. the twist in that is that most big businesses tend to be silent remainders.

the more troubled the existing may plan is in, the more that hope begins to appear that you might end up with a referendum. perhaps what we would call an av system. where you have three options on the ballot and you choose one. if the three choices are one remain, two some version of maize deal, and three, hard brexit, you might have people coming out with a number that looks healthy. there are enough business people that would like that. you have this difficulty. in the vote tonight, we had a lot of people saying they will support theresa may. you will now have a lot of business leaders saying we support theresa may's plan. if they saw chance of getting another referendum, they would probably hang out for that.

we are becoming possibly machiavellian in this country. romaine: thank you, john. that is bloomberg's editor-in-chief john micklethwait from london. we will get more market reaction from the confidence vote for theresa may. we bring in the global head of fx research, stephen englander. thank you for joining us. the market reaction is relatively muted. ,o you think the vote today while it is a confidence vote, how much confidence will it give the market? steve: sterling pumped up a little bit. the market is trading off to bring questions. lowering the chance jeremy corbyn will be the next prime minister, and is it lowering the chance we have a hard brexit? they think on the margin. in a positivewent way, but not in a big way. joe: what is the downside?

we could face and no deal brexit, right? we could come march, nothing is agreed to, and the u.k. crashes out of the eu. what is a dark scenario for the pound look like in your view? steve: it could go well below 120. if there is economic and political uncertainty on top of it because of the possibilities of a change in government, sterling is very cheap. the markets have begun to price in at least a 50% chance, maybe 60% chance of a hard brexit. a lot is in the price already. caroline: what about volatility priced in at the moment when it comes to the pound? implied volatility has been it highs we are not seen since 2017. how much of the market is bracing itself for swings? steven: they are spending money

in both directions. you'rereceive sterling, needing a lot of money to lower the exposure and get out as fast as you can. if you are paying sterling, you are similarly trying to reduce your exposure in case the vote goes the other way. speaking, businesses are taking this with more concern than they took the first brexit vote. everyone thought it was going to remain. now they are willing to pay up. does this matter outside of the u.k. at all? is a great story and we have been talking about it all day, but is this strictly a pound story? steven: i think it is primarily a pound story. you take what is happening in the u.k. and the five by five

and maybe we'll have what happens in europe. further away you get, the less direct of a concern it is. u.k. by fire is the main focus here. joe: what about the euro? commenting earlier, it seems every day there's a new political risk that emerges in europe, france, italy, belgium. i'm sure i'm forgetting some. how much does the steady drumbeat of policy risk, what effect is that having a euro? steven: you have to add perspective. if you throw yourself back to 2011, 2012, this is a walk in the park for the euro. it looks as if italy is beginning to come to a compromise. it looks as if france is using

its position to expand. that may encourage other european countries to push the fiscal frontier out a little bit. were it not for the concerns about the u.k., we would probably be well over 114 on the euro. romaine: do you think we are getting to the point where the two are getting divorced from each other with her guards to the current momentum? we are not seen the same correlation we saw a couple of years ago. four sterling, this is like the first-order. euro, there are a bunch of other things happening. i think the sterling matters for the euro, but it matters more for the sterling rather than the euro. caroline: theresa may will be going back to brussels to

negotiate the summit and we have a small event like the ecb coming out with its policy announcement. steven: the ecb will be pretty cautious about making big announcements. aboutay say something european banks needing the funding. i don't think they will send a big signal about traits. they have already committed themselves well into 2019. i think it's premature for them from changing their plans about finishing the balance sheet. it may come out hawkish, but it depends of if they push the lpro story tomorrow. joe: stephen, thank you very much. sticking with brexit, let's go back to westminster with guy johnson. guy, what are you thinking

about? about'm trying to think where exactly theresa may goes next. i'm to figure out how she finds her way out of this puzzle that brexit has created for her. she does not have the votes in the house of commons. today proved that. she doesn't have the dup on --rd because of its concerns the irish unionist party concerns about the irish backstop. she will be trying to work out a way she can extract legal guarantees around that backstop that will satisfy the dup. my overall conclusion is that we are not a great deal further forward in the process. you need to look at sterling over the last few days. the big event was not today's results, it was theresa may pulling the plug on that vote because she did not have the numbers to get her current deal

over the line. romaine: speaking of the process, this was a vote by her own party. is there still a risk we could from broader vote tomorrow the labour party with regards to her status? guy: absolutely. it's a vote of confidence in the government which would be a parliamentary vote. situation where mps fornot likely to vote another general election because they fear the labour party my twin that. -- might win that. at every turn, you end up at a political stalemate. it's an open question. there is no majority in the house of commons for any particular outcome. that is why, maybe ultimately, this process has back to the british people to make its goes.on on where brexit

at the moment, we have political power pullout assists -- political power paralysis. front pages of tomorrow's papers, will they be about her meeting with eu leaders or about who might take her place? the sense was already that she was a prime minister that was in office and not necessarily in power. that was already kind of past the narrative. the front page tomorrow will be buy onceay has to vye once again. as a result of today, we know she will be removed. it won't happen in the near term, it will be happen in the medium-term.

further forward in figuring out where brexit goes, and what brexit ultimately ends up meeting. that is what the editorials will say overnight. the front pages will be "theresa may survives." it will be friday morning's papers that will ultimately be dominated by the ease story. joe: does theresa may get on a plane and go to the rest of europe? guy: i think she has to. that is all she can do. that is all she can do. caroline: guy johnson, it has been a fabulous to have you staying late. a great perspective throughout these breaking news few hours. that's all for "what'd you miss?" romaine: "bloomberg daybreak: australia" is up next in the u.s. joe: have a great evening. this is bloomberg. ♪

>> welcome to "bloomberg daybreak: australia." i'm in hong kong. we are counting down to the asia major market open. haidi: these of the top stories in a sour. theresa may staying on after winning a conservative vote of confidence. she will now work to deliver brexit. sterling maintains much of its advance. may cannot be challenged for another year. the prime minister is being urged