vote on may's brexit plan. china promises large-scale tax cuts while germany is hit with its weakest growth in five years and jpmorgan's big mess. david: welcome to bloomberg daybreak. i'm david westin. was it allalix: related to that one hedge fund? apparently that's not the case. you have to wonder if these banks got really hurt by some website trades. david: first quarter epa's seven to 90. first quarter adjusted. estimate.e -- beat the estimate.

they had baked in a lot of their revenues before the fuel costs went down. alix: let's go to allison williams. rbc capital markets managing director of equity research. your take? >> obviously a rough month citigroup number yesterday were down to about mid-teen. equities trading up 15% to 18% to so equities outperforming. i think what we saw was equities derivative benefiting from volatility. the prime business got hurt by that volatility.

david: why is volatility helping? had message spread widening. there could have been some marks related to that. it will be interesting to see what theirn reports core trend is. and morgan stanley also expected to have relatively thenger just because of weaker comparison from a year ago. i think perhaps the volatility is help you in treasury. i think the currency volatility we saw coming into more of a january move. alix: what's your take? seeing a combination of factors with the jpmorgan numbers. their businesses that are tied to the capital markets.

they are trust business with net income below expectations. they have to remember they had a one-time charge in these numbers. that certainly is a factor and was the final piece provision was built up higher than we expected primarily due to corp. downgrades. what about their fundamental loan business? >> they said there was downgrades of corporate credit and they didn't name any particular credits in particular. there were some downgrades that they felt they needed to build reserves. so the core banking business as

we saw yesterday was quite strong but the markets related businesses were the ones due to volatility. so if this follows true they thought their pipelines were very strong and if the conditions improve we should see a stronger fourth quarter. alix: what we heard yesterday was their loss was due to one bad trade basically. the hedge fund in asia. going to do to the banking industry? are they going to wind up taking on less risk? said we had a loss but it was within risk parameters. first quarter tends to be the strongest so i think it is much more important for the full-year results in terms of what the outlook is today coming into this quarter and it tends to be a lot healthier.

reserve is long-lost going to be a flag for people because people are looking with this to see what we see from wells fargo. alix: jamie dimon says as we head into 2019 we are jerk countries leaders to strike a collaborative tone. that is a signal to the government. tell us about that. a lot of the focus will be on the look forward. theremie dimon being fair ? somethink there is fairness to it of course. it comes down to the strength of the u.s. economy in the case of jpmorgan and the global economy.

i think part of that is true. you don't want to rely too much on that as being the reason. alix: how is this fair for bank of america -- what is your bet on how that goes in the next couple of days >> it would have been one thing if the numbers were of the year-over-year. i would expect that the others report similar results so we should expect double-digit rates of decline from these players. banking the investment areas the advisory business should stand out for all of them. david: we are going to have that in less than an hour. does this indicate wells fargo may be in better shape because they are more involved in lending money than in trading? beforee went back to

2016 wells fargo would tend to outperform. from the fundamental standpoint you could still see outperformance because they don't have the equities business and in fact because the environment turned out to be weaker this year in terms of loan growth the assets can has not hurt them as much as they had initially thought. alix: just to recap, big miss following city results from yesterday. the stock down by over 2% in premarket. apparently that's from a single name. dow is deutsche bank chief international economists. the government basically has to get to get it -- get it together.

>> it's pretty clear their very highertainty is levels at the moment. the critical thing is if we have all this uncertainty in front of us for economy than we ask questions about what's in front of us. take solace from growth being up in terms of the overall lending and the net interest margin? that would indicate the economy is doing pretty well. >> credit markets have been somewhat distressed at the moment for quite some time and we have been credit growth go up so there's probably -- towards the banking sector so the weekly data for lending from banks has actually been improving across the board. francine: this brings up the longer-term effect of government shutdown. after february the government is still shutdown. >> absolutely. it could cause a recession.

of questions a lot about how to quantify this risk it all depends on when will it end. tsa agents is also approvals. fda. it's a lot of things really slowly getting worse and worse and if that just intensifies its not just a linear movement. it could get exponentially worse a lot faster. david: when? we are 25 days in now. when do we really run the risk of a recession if we keep this up? >> it has to be at least six months. in thet really know market is not pricing and so in some cases the uncertainty is intensifying and the more anecdotes come out the more worried you get about the

downside. alix: in the market it's all about jpmorgan. now remember city start the day off lower yesterday as well. just because we are lower in premarket let's wait for the call. that was because of one single select client downgrade your core loans grow 7%. you have a provision for credit losses of a teen percent because you wind up growing more. you're now seeing european banks lowered than the s&p lose most of the steam. german growth slowed for the first time in five years.

that is sort of weighing on the currency as well. treasury market sealed down by two basis points. it was an interesting call last year and they were right. in crude up by about 1% as well. wakingup theresa may is -- facing the worst government defeat and 95 years. this is bloomberg. ♪

>> this is bloomberg daybreak. the largest health insurer in the u.s. did better at the next acted in the fourth quarter. united health beating estimates. company also attracted more profitable business from

government programs. thelatest see her take over continues. straight holders -- stakeholders are trying to reach an agreement. an to stayuld allow in business. -- developing self driving cars. the ceo saying america will play a major role in driverless vehicles but vw is committed to owning the soft where the controls the cards. they will hold a joint teleconference today. brexit vote and per mr. theresa may's certain defeat. banks reporting earnings. here to discuss this stephanie flanders. our top story begrudgingly is brexit.

your base case. >> we have some confident that she's going to lose a vote. if you can distance yourself from a country in a constitutional meltdown the collecting bargaining aspect is going to be extraordinary. parliament is taking control of this process which doesn't normally happen in the u k and a lot depends on what the speaker of the house allows to come to a vote when. so mp's are as we speak gaming out all those different scenarios and it's going to be, if i didn't have a personal stake i would think it was a fascinating exercise in democratic meltdown. people are hoping it doesn't work.

>> key issue tends to be whether the bank of england will be. on economic side is just the political slight that's an issue. now it's getting a lot more complicated. as a markete participant it is back to what do you do in this situation. it's getting extremely complicated. newd code we also have some german numbers out this morning. since 2013.e most time the labor market is pretty robust. >> one of the dilemmas for mario germanys that you have very close and probably beyond full potential. but other countries still needing to catch up.

from mario to hear draghi later today. we haven't seen him comment as evidence of a slowdown has an up over the last month. people think there won't be an interest rate rise in his time and maybe not before the next recession. alix: how much of this is a young to his control? the domestic data still looks pretty good. how much of that can mario draghi not even handle? >> he has to focus on the 17 countries, not germany. it means they're going to have to start using that forward guidance to put off the date of a rate rise which looked a lot more certain maybe a few months ago.

david: to what extent have a already tightened by stopping their bond purchasing? >> we had some hope that this was because of mission issues. be key issue continues to that we still have a lot of difficulty seeing what's going to stop the downward momentum. there are some reasons the fundamentals are good. the external forces that have than driving a lot of the downdraft. those are not going away anytime soon. our other top story has to do with banks. bills foreing some loan reserves in the consumer unit. to be looking at consistent results of an economy that is still good to trading environment that is really bad? >> i think so. you also would see that on the

management side which you know has been challenging. there's also the time in question. i suspect by the end of the week jpmorgan will still probably have the hardest rotc of any of the major banks. it is still making money doing what tanks are supposed to do in the recovery. lending a lot of money at high rates and then borrowing. david: they may be an indicator of what's going on in the economy more broadly. can we move through anything we have seen the -- thus far? fundamentals for the economy are still reasonably good. we don't expect a recession. there is some slowing down and the question becomes how much of a slowdown will we get and how much will be driven by a distraction.

at least an indicator that more issues are coming in the credit market. the banking sector has still seen credit growth growing higher. you see downward revisions followed by the most in 2009 profit estimates. if it's any sort of revenue miss, lack of sales growth that does tell you something. >> i think we are going into a year of lower expectations and it could well be for the banks. we have quite aggressive language coming from jamie dimon. that's going to set us up for downward revisions. i always feel there's a gaming element of the estimates in the first place. i don't always look at them as absolute gospel.

david: stephanie flanders, always a treat to have you here. we are going to be bringing you wells fargo's latest earnings at 8:00 a.m. eastern time and this afternoon bloomberg tv will speak to john shrewsbury. he's the wells fargo cfo. up, china vows large-scale tax cuts. the government's attempts to support slowing economy. this is bloomberg. ♪

david: china continued its stimulus program by reiterating its commitment to cut taxes. this came on the heels of numbers out for the month of december. obviously we care about china has it has been the engine for close -- growth globally.

how are they doing? >> they are doing reasonably well. they said overnight they didn't want to flood the market with liquidity. they are going very very gradual. no dramatic declines. the growth rates are getting lower. david: as an economist you count on the data. there are some people who say anecdotally china is slowing faster than what they are admitting. >> absolutely. ofy had a broad range indicators. picture is still there is not a hard landing going on. some subcomponents you can worry a little bit more.

the key issue still is that growth will slowly be gradually coming down. alix: m1 is holding up really well. the velocity of money in the economy is slowing. ? >> rememberx that the stimulus that china has been doing for quite some time. your credit numbers also start to look a little bit different. we still think that everything is ok for now. david: now they are in the service economy. >> the investment numbers have shown relatively stable development. it's true that infrastructure was for quite some time the main thing that they will be pushing on. rating that credit came on small businesses and attempt to get the small

underground economies to do better. we are still relatively confident in the outlook. the u.k. parliament votes on brexit in about four and half hours time. theresa may is currently in discussion with the dup in hopes of striking a deal on brexit. the question is how much will she lose by. this is bloomberg. ♪

alix: this is bloomberg daybreak. i am alix steel. happy tuesday. bank earnings in full sleep. jpmorgan missing on fixed income currencies and commodity

trading, down by 18%. it is the worst in about a decade, but the overall loan growth holding up pretty well. the markets around the lows for the session but positive. announce large tax cuts and the dax off by .2 after growth slowed for the first time in five years. in other asset classes, it is a strong g10 dollar story. cable rate wishy-washy ahead of the vote this evening. no one knows how binary it could be, so causing overnight volatility. euro pound down by .2, as well. the 210 spread in the u.s. flattered. 15 basis points in crude up by over 1%, presumably on china stimulus. china good news moving to its own drum. david: tonight is the night for theresa may and her brexit plan. later this evening, london time, the house of commons will begin

voting on the course that could set their landscape for years to come. >> brexit needs brexit. brexit does mean brexit. brexit means brexit, and we are going to make a success of it. we are leading the european union but not leaving europe. what we want to ensure is we get the best possible deal. every vote for me is a vote for strong and label leadership. strong and stable leadership. no deal is better than a bad deal.we are working to get the best deal kingdom.iited reached a deal with the other eu member states. there is not a better deal available. there will be a choice between a deal, no deal, or no brexit. all.uld risk no brexit at the british people just want us to get on with it. get on with it. let's move on. face the risk of leaving without a deal or the bigger risk of not

leaving at all. there are some in westminster who would wish to delay or stop brexit. the only deal on the table is one mps will vote on. david: we went to go to london now to join our bloomberg surveillance anger francine lacqua -- anchor francine lacqua. is steadfast. theresa may is not returning, as they said about margaret thatcher, so how bad will it be for her tonight? francine: at the moment, we do not know. i have not heard anyone say she will win the vote, so it depends on how much she loses it by. if you look at the range of first implicitly say, they could be between 60 members of parliament voting against it, up to 200. depending on that, i think the outcome in the next couple of days will be on what sterling does and it depends on from the

e.u. side, do they want to give a better deal to theresa may? it for deal gets voted down by 200 members of parliament, the eu will think, what do they want? we do not know if the we can offer anything to get it throu so let's start from scratch. there may be away for theresa may to put it to a second vote and get it through with helping hands from brussels. it depends on the numbers that vote against it. said, i have seen that that for example, maybe brussels will move. what is the basis for saying that? brussels hasn't moved much so far. have they signaled to us that they might move? you are right. there is no real foundation apart from insiders kind of yesterday in the letter of intent that they seem to be more friendly. yesterday, what we had was basically a letter of intent, say we do not really want to

enforce a backstop for a long amount of time. they tried to basically massage what they are trying to get parliament to vote on, but it doesn't really have any legal basis, so at the moment, you are right, it is speculation. there is a lot of speculation on the other options theresa may has.once the deal gets voted down , it is about what happens next. outside with francine lacqua. thank you. isx: headed fx research still with us. take a look at volatility for the cable rate. what are you doing for the next 24 hours? >> indeed. investors are expecting a fairly volatile outcome, but if you extend the chart to cover of you realized, investors happy be nine view of the outcome of the vote.

if anything, markets are pricing in and markets are moving either way. both cable and euro-sterling reflects the view that whatever comes tonight, the pound may as most of our clients assume the tail risk of no deal brexit may no longer be as prominently on the table as it used to be in the recent past. in other words, investors may look for that vote and wait to see what happens next. alix: to be sure, and it is typical because we do not typically have a set date like the u.s. or french elections, but there is a great chart that came across the bloomberg that talks about pound volatility versus emerging-market volatility. pound volatility is outpacing that if emerging markets. this looks to be a longer-term phenomenon are not an overnight story. how do you train that? what do you do? the case,if that is especially focused on the bulk

of phase, the market is pricing in for perpetual disaster when it comes to the pound. we have been seeing some sense of normality's that started to return to the markets. the curve has inverted and the longer term has been selling. that suggests investors are starting to converge back to the view that is dominating the price action. process ise brexit going to be a process. the bull market is not really pricing in that perpetual risk event that continues and , so ifes just priced in indeed we do come out of that vote and may potentially is still the prime minister heads back to brussels, and there's more development, which shifts the lengthfocus on of the process, i would imagine the long-term boat will continue to come off. what is also interesting is that in terms of volatility weight, march is an important big risk event. it has been losing importance

with investors shifting their focus further out towards june and later in the year, which may be what some investors are already expecting the delay of article 50. with the situation being low in the medium-term, and going into today, if the vote fails, are you seeing sterling going up or down? onentin: well, it depends how many mps really do vote against the deal. i guess ultimately, it is the case of the whole parliament. i think there is a strong majority against no deal brexit, so even if the deal fails today, and the pound relinquishes some of its recent again, i would imagine 125 could be the target and the downside for cable, i think ultimately, the character remains out of those things and a no-deal brexit tail risk is

what is not on the table anymore. david: let me turn around to the u.k. economy. before this happens, the u.k. economy was leading europe and doing quite well. takenhey essentially themselves down a few ranks in terms of world economy? >> the whole problem of investors as they have to figure out how much of the slowdown will the spring about? we got the slowdown would have been stronger, but the bottom line still is that the economy onlyeen doing well, not because sterling was depreciating much, but it is true there is uncertainty and it becomes difficult to quantify when you do not know the end date. if this goes beyond march, what horizon should i have as an investor? even if i think of the medium-term, i do not know how to quantify the risk if i do not know the next deadline. we are not seeing the situation where this will hold off in march. david: if there is a permanent evaluation of the pound, what does that do to the british economy? torsten: it is great for those

who are exporters. alix: we are still waiting for that. david: what does it do for u.k. citizens? torsten: that is a bit more complicated, but you are right. theall, it depends on what flow signs and the impact of gdp. the general issue is gdp in u.k. has been better, you can really since we saw the slowdown in germany, but how do you quantify this political risk? we just don't even know the end date to many of these things. alix: exactly, versus a one-day election. that is a different story for brexit. how does the dollar come into play when you are looking at the major g10 currencies? valentin: at the moment, the dollar's not really doing as well as it could have in the u.s. seem to bes thinking it is about the government shutdown, but it has been the dominant driver of the underperformance is the shift in tone of the fed, and on the

whole, we are saying that could continue to be the main driver of the currency throughout the year. we are expecting a pool by the fed in march into june, followed by a couple of dovish rate hikes in the second half of the year. to the actually not great advantage of the currency. the theme of the year may well be a political it convergence situation -- political come budgets situation, and by that, i mean the fed is more cautious in presenting a convergence and in a more dovish extensive banks or the boj. on the whole, we do think we may have seen the highs and the dollar on the trading basis and presumably, euro-dollar or dollar-yen they reflect some further dollar underperformance on a sustained basis in coming quarters. marinov andtin beingn, thank you for with this.

we wanted to turn to an event in london called a better deal for britain. thanks. yes, you find is that the british academy for the event, and we are joined by arlene foster, the leader of the dup to discuss the latest on brexit. the dup props up theresa may's government and they have a crucial role. let's get to our conversation. rate to have you with us. let me start by saying that theresa may said in the last half hour or so that theresa may has had ongoing talks with the dup on the brexit deal. are you still talking and is there still a possibility you back or deal? arlene: no, we will not be backing the deal that the present moment in time because the withdrawal agreement as it is currently constituted is a threat to the union and has a backstop within it, which means northern ireland would he treated differently than the rest of the united kingdom. so we will not be supporting her deal on the table at the present moment in time, but we will

continue to talk. of course we will. we will encourage her to go back to europe and the for a better deal because we believe there is a better want to be found. anna: what about this one amendment that could be voted on later, which is basically put an end to date on the backstop of the eu that has not agreed to that, but if the government were to back that, with the dup back that amendment? the best waylieve to deal with this is to have this vote in its clearest terms tonight, and allow the prime minister to go back to europe theuse that as the state of opinion that there is not a deal here. for a deal, we need both sides to agree. the united kingdom does not agree as currently constituted. we believe the amendment comes from a good place, because people are trying to find the lycian, but that amendment will westminster,lue in and it is not in the withdrawal agreement. and that withdrawal agreement is a national treaty and in law,

signed off upon, that causes difficulty for northern ireland. anna: in the future, if there were an end date on the backstop, could you support it if it with -- if it had an end date? arlene: of course, if an end date were to go into the withdrawal agreement in the international treaty, that would be a different situation. anna: if theresa may uses the vote, what with her next step the? arlene: i hope she would go to europe and tell them she does not have the support in large numbers from the house of commons. therefore, the european union, if they want a deal, and i believe they do because it is good for europe and the united kingdom, they made to change their mind in relation to the backstop. anna: do you have different decisions to make depending on the margin of loss tonight? arlene: i think if she defeated in the conference away, then her handtrengthening

for your because she can say to them, i have losses in a significant way, so you need to change. if she loses by a small margin, then it would be different and she may decide on a different route. from our perspective, she needs to get rid of the backstop. that is all we have been after. anna: but a backstop with the mandate you could support? arlene: it is something we would look at, but at present, we don't have that. anna: do you think there could be an extension of article 50? arlene: we would not be in favor of extending article 50 because if you are in a negotiation and you keep mentioning the time, people will keep playing until the last moment of negotiations, and we know that term the northern ireland point of view, it only really becomes very clear and focused when you are coming near to the end date. we believe theresa may should use that focus and that compression, if you like, to make a difference. anna: jeremy corbyn has talked about very soon after theresa may's vote this evening, it she

loses, he brings a no-confidence vote in the government. of course, your party said they would support the government. are there circumstances in which you would vote against the government? arlene: we have said we commend the confidence and supply agreement. that would happen after the general election in 2017 to give security and stability to the whole of the united kingdom. we still believe we are providing that security and stability. -- we still want to support her in getting a brexit deal, and we want to push her to look for a better deal. anna: so there's no way you would vote against the government? look into theot future. i do not have a crystal ball, but as it currently stands, we will be urging the prime minister to look for a better deal. anna: it might be tomorrow, friday, monday. many people assume that there is nothing that will make you back jeremy corbyn and that no-confidence vote. arlene: well, we do not know the

circumstances and i cannot predict what they are, and things have moved quickly over the past number of months. what we want to see is the prime minister delivering the brexit deal, which is good for the whole of the u.k. we believe she can do that and we will support her in that. anna: how damaging do think it would be to leave the eu with no deal? we heard from manufacturers today, talking about the catastrophic consequences of a no deal arlene:. thaty wants to see situation. from my perspective, i want a deal. let us focus on that and get a negotiation that works for the european union and we should have a deal that is balanced and one that works for the u.k., as well. anna: but you have to leave open the option of no deal? arlene: you do, and i accept that. frankly, there has been a lot of hyperbole about a no deal situation, and i think when you look at some of the forecasts in euro,st about joining the

we were going to enter into a very destabilizing time if we did not join the erm, some that was going to happen, so we need to be rochus and get a deal that works for the u.k. anna: thank you for your time. arlene foster, the leader of the dup, joining us at the british academy in central london. david: i could not have a more timely interview than that. alix: return to wall street beat, three things wall street is buzzing about. pg&e hedge fund makes an accomplished wager behind stocks in the third quarter and 20 billion in legal claims. then, vanguard's 450 million dollar pg&e muni bond holding, the vanguard group's hold half of pg&e's and .5 billion municipal bond and hallways founder breaks the silence.the billionaire founder brexiteer long silence in freezing president trump. david: joining us now is jason kelly, the new york bureau chief.

i would say i'm not sure i do not understand, but position in equity, we don't know if they still have it, but also the position of buying up insurance claims. meon: this is fascinating to because it really breaks into a pretty complex story but effectively, what they are doing selling at a discount from phase, and essentially, it is claims because the insurer is betting effectively this will take a long time to get played st cannd bow post -- baupo be patient and they will buy it at a discount and there is a nice profit on the backend because they are buying a 35 or so cents on the dollar, and if they can get paid close to face, it is really nice. david: i do not know, they be you do, where does that sit in the capital structure? i would say equity goes first but where does it sit with respective bonds? pretty low, and

that is a good question. and we will see if they ultimately get paid out. that is one of the biggest questions around pg&e right now. if you are any kind of investor. alix: there is a lot of active money and hedge funds as the third quarter in the stock, but we are also seeing huge stocks like the vanguard. it is about $415 million in muni bonds. riskently, they are not at because they are backed by banks that are buyers of last resort. someone is going to get hurt. jason: i was amazed by this. when i was reading the story this morning, i grabbed taylor riggs, one of our muni experts, and i said, -- the short answer is, no, this backstop is not something that is always there as best we can tell. i am not totally clear on the actual mechanics of it, but as you say, somebody is going to be on the hook. it sounds like from vanguard's perspective, it may not be them.

to be clear, they also told us that they have sold down those bonds. david: you make me feel better because when i read this, i had no idea that banks acted as insurers of bonds. jason: often times, the municipality of this they will act as a backstop alix:, but this is the case with the banks -- again, someone will pay. david: that is always the case, and the talk about huawei. reclusive founder coming out and saying, wait, i really like president trump, he is a great president, but at the same time, i am a good citizen. is an amazing story because i feel like it has faded away a little. let's remember, the huawei cfo is being held in canada pending next tradition to the united states for essentially violating sanctions with iran. there are accusations around sb notch. david: who happens to be his daughter. jason: exactly. david: and in poland, they have people saying they are spying. alix: about the story what

stands out to me is the cultural family world and that company that we will not feel here. you is a lot more than pay, may have been spying. let's put you in jail. this is big ramifications. jason: huawei is a major company. apple knows that. that is to got the revenue guy. kelly, thank you. tune in to jason on bloomberg radio every day from 2:00 to 5:00 eastern time. coming up, shut down a 25. democrats plan votes on funding goes, but will they be able to convince the president on ending the shutdown? this is bloomberg. ♪

dayd: i am watching today, 25 of the government shutdown and we have marty schenker. when is it going to end? not anytime soon, and i'm one of the more pessimistic

people looking at this. i think this will last weeks, if not months. when: things like this and there was enough pain. where is it going to come from and where would the president feel it? marty: i don't think the president to ever feel pain. he views this as the redline. this is how we you will have to legislate democratic-controlled house moving forward. for him, this is strategic. he needs to show that the democrats cave, and they are not going to. david: as they move forward, there was a new piece on bloomberg that there are more places that you see the showing up, things like rent subsidies for people on the fact that the government doesn't pay rental landlords. marty: and bust line intercepts that will have to close down in cities around the country. the pain has not been great enough on the street level to force the republicans in the senate to basically go to the white house and say, this is got and. david: when i talk to some senators, one of the things is

food stamps. they have figured out how to pay them through february. is that a possible pain point? if children are going hungry, people start focusing, i would hope. marty: absolutely, and our story points out that many runs out in march, where we may see 30 getion foodstamp recipients shafted by not being able to get the food stamps and buy groceries. of dynamic that is going to force senate republicans to basically go to the white house and say, we cannot hold the line any longer. david: the senate republicans have a leader called mitch mcconnell. becauseaking a powder we are not hearing much these days. marty: you noticed that mcconnell's strategy is actually working on the heat is on the presidents, not on senate republicans. that will change. the democrats are going to be under pressure, as well as people get sick of this. but that is going to come weeks and perhaps longer. story.fascinating

thank you. i'm afraid we will have to talk to about this again before we are done. that is marty schenker. alix: not ending anytime soon. in the market, looking at jpmorgan and s&p losing steam. jpmorgan down by over 3%. citi had disappointing results yesterday but they climbed back to the session. jpmorgan's results were upsetting, down 18%, the worst of the decade. $1.86 billion, also some reserve built in the consumer unit and wholesale unit. is a good or bad? we will break that down. we are moments way from wells fargo's fourth-quarter results. david george of rw thinks research analyst will join us, next. this is bloomberg. ♪ 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. alix: the u.k.'s meaningful vote

underway as they planned to vote on may's brexit plan. and china stimulates germany's flows, promising tax cuts and giving a boost to markets while germany is hit with its weakest growth in five years. and jpmorgan's trading miss, hitting the lowest level since the financial crisis. to ceo warns u.s. legals strike the collaborative tone. and wells fargo earnings coming out right now. david: we have wells fargo just out right now. fourth quarter earnings-per-share was 1.21, and estimated to be 1.18, so exceeded expectations on earnings-per-share. we're looking at 63.6% -- alix: average loans. david: they are up some. alix: and a quarter on quarter basis. i think the reason why we are interested in many ways is one, jpmorgan home lending was down 8%. they saw lower volume and compression, so they wanted to

know what kind of read to that was from wells fargo. david: particularly because wells fargo has been big in the homeowners business. alix: and there nim coming in a bit like -- and their nim coming in a bit lighter, too, but nevertheless, let's see the stock. there modestly down, but i don't feel that is a big mover. ofid: in the meantime, news we might be thought coming and they have announced a global alliance. apparently, they will start making midsize pickup trucks together with traditional combustion engines, and cooperate on electric and driverless cars. the basic thinking by the industry is vw has ahead on electric cars and ford has a better approach to autonomous so they will be forming a global alliance, as large as anticipated, and jim hackett signaled that was coming. alix: turning back to banks to

recap, wells fargo earnings at 1.21 and their total average loans at 946 alien dollars -- $946 billion? that is a lot. it seems that quite a large number. our bloomberg intelligence bank analyst joins us and a senior banks research analyst david george. is that real? $946 billion? >> i think that israel and within their asset cap. they had talked about a continuation of the trends -- i think that is real and within their asset cap. talked about the continuation of the trends and we are expecting to see positive growth in commercial and industrial and slower growth in commercial real estate and the decline of that that is similar have seen. trends we the other thing interesting, they will be looking for the mortgage value as we did see

disappointing mortgage volumes at jpmorgan and we expected lower volumes just given what we have seen in the industry, with payments lower than expected. so we will look to see what happened for wells. david: david, the story for wells fargo has been the difficulty they had. are they coming through it? through earnings indicate anything on that front? i think the earnings show some progress, with respect, and it was mentioned moment ago, dealing with the acid cap is going to be a multi-quarter issue. i'm sure there will be questions on the call, with respect to the expectations in terms of getting out of that asset cap, but given the valuation of wells' shares, the key from our perspective, and we are buyers of wells fargo, is really showing some stability and revenues. wells has had fairly meaningful declines in revenues over the last several quarters, and showing some stability there if you take that with fairly good expense control and a significant buyback that they

are in the process of executing. it seems to us to be a reasonable set up. david: bring us up-to-date on that. exactly the revenue issue. basically, their brand has been damaged and they're getting hurt on the retail side. it is a fair question and next to impossible to try to quantify. wells has tried to do some things to manage through the acid cap. in other words, they have a general inability to grow assets over a certain amount, so that has had a negative impact on revenues. there has been some what i would say customer either rebates or loyalty payments come and i think they have been reluctant on the sales side to be aggressive in the retail bank, has had a bitat of an impact. wells has also been doing a lot of things on the risk reduction side of the news in terms of .etting out of higher risks they have sold indirect auto loans in puerto rico, so part of

the revenue challenge has been intentional and risk reduction related and part of it related to the acid cap. alix: alison, what did you learn from this so far? alison: i think in general, the environment looks like it remains healthy in terms of loan growth to positive growth. it looks a kid is holding up and we will want to look at the deposit repricing class three jpmorgan made comments about see and i loan spreads. we have heard about competition in that business. again, overall, trading is weaker than expected. i think investors may focus on the expense side of things. jpmorgan's expenses look like they came in higher than expected. we probably want to dig a little bit through that. wells fargo same their cost was on target. citigroup, i think people wanted them to talk about holding flat expenses for the year and they did not specifically guide to

that, but they gave enough detail that investors could see expenses and get more confidence in the operating leverage. alix: as we round out the bank conversation, jpmorgan, the other headliner of the morning, still down. do you want to buy this dip today? david g.: we are not recommending jp at the moment. i do think the market is making a little bit of too much of a big deal on the market related myths, and eps related miss in general. obviously, market related revenues are volatile quarter to quarter, and they still have dominant id. there are a number of things jpmorgan could have done to print a higher eps number. -- they didumber of not pull the investment bank. they made significant contributions to the charitable organization, etc. market related revenue softness is transitory at jpm, but in terms of fresh money, we would be buyers of wells rather than jpm in the

premarket today. ,lix: david george of rw baird and allison williams, thank you. david: we have some red headlines crossing the bloomberg that involves walmart and cbs . --cvs. a deal andmart had walmart pulled out of the deal and it was a dispute over pricing, walmart saying you should reimburse us more cvs, and cvs said we will not pay you more and they pulled out of it. downan hear that cvs is 1.75% in the pre-'s, so walmart has pulled out of the cvs arrangement -- in the premarket, so walmart has pulled out of the cvs arrangement. alix: where does that leave us? against the backdrop and increasing consolidation, and one-stop shopping to get research benefits. this goes the other way and unwinds some of it. alix: cvs overseas 93 million people? that is a lot of business coming

through your doors. down on was 2% in premarket spirit banks a little lighter after earnings for jpmorgan that disappointed. still with us, our portfolio manager. a i think banks are having hard time. if you go to the beginning of last year and say, what was everyone expecting for the banks? expecting steeper yield curves and better conditions in general. you have gotten a flatter yield curve, which is tougher than. in an environment where trading is always volatile in the fourth quarter and this quarter with the upswing, i think you will have people on the sidelines when things settle out, so you have this problem where the traditional areas where they made money or not so great right now because spreads are not that wide. and places where you want to see greater activity are somewhat a little slower now because you don't have big trading volumes, even now with the big upswing. david: at 40,000 feet, they are

doing well in profits and the banks have record profits but at the same time, their stock has taken a hit. are they oversold? esau that in december, where the market reacted for various reasons, is there some upside? sarah: absolutely, and there is a possibility that you talk a the volumes and where they have looked at nontraditional ways to gather revenues and profits because these have drop-down to become profits to begin with but the question is, if people don't see traditional methods getting better, they will stay in waiting. i do think you are starting to see the market repricing and multiples are used to see. alix: but earnings estimates have been revised down for many sectors. where is the dislocation? or have been -- were had earnings been related to much and what have they not? sarah: i think the biggest problem is since we do not know where they end up this year, it is hard to see if we have party taken enough pain or is there

more to come? part of the problem is we do not know what really will happen with trade or issues coming on. you can say that maybe you have taken enough pain if we end up with another takedown of earnings numbers, and then you look at areas like technology and those numbers keep coming down. david: we had remarkable and spectacular growth in earnings and everybody agrees it will not be spectacular for cannot know, because of the geopolitical risk, what is the over and under? if things go badly, what is the go?st it could and if things do better, what is the highest you could go in terms of earnings growth percentage? .arah: wow i think the problems we are seeing now with trade and technology, it is difficult to gain that out. you saw the growth and earnings because of tax growth and you won't see that this year. you could be flat and then the market doesn't look so crazy

expensive, but if you come down from here, the market still looks pricey. the question because even if you have a little growth, the market looks reasonably priced. many of the sectors look reasonably priced, but you also have an expansion of multiples from qe that i think it is difficult. that is reuse you so much volatility. people are trying to figure out what are the right multiples to pay for the stocks? when we don't have a real feel for earnings, we are not sure how much the quiddity is out of the market. alix: that is the issue. sarah hunt speaking with us. to quickly recap, rose fargo total average at 940, up 1% of the quarter on quarter, and you had earnings in that $1.21 a solid, andty jpmorgan media call is underway. the ceo is taking questions about underperforming and where they are seeing that. she is generally constructive on the 2019 outlook. in the broader market, we are

high into the session but holding in there, even though jpmorgan's overall on the sentiment of the index, s&p .4 and you had german growth last year falling to the first time in five years. that may be weighing on the currency, as well as brexit uncertainty. deals in the u.s. go nowhere. and crude held by chinese stimulus. coming up, prime minister theresa may is near certain defeat. u.k. parliament against voting on a brexit deal it :00 p.m. london, 3:00 p.m. -- deal at 8:00 p.m. london time. -- u.k. parliament begins voting on a brexit deal at 8:00 p.m. london time. this is bloomberg. ♪

only 14 minutes into the jpmorgan, jamie dimon says it is

a political issue upsetting the bank and it is a risk that if the shutdown is prolonged enough, it could reduce growth to zero. david: he says of the goes the full quarter, if you go zero. alix: that is quite a call. in two weeks, you shave off about .1, and jpmorgan says it will go to zero. it is all your fault, the government. he is working on it. david: the sad point is he could be right. you know? i'm not sure i would bet against him right now. alix: but marion lake says the morer the shutdown, the credit will be impacted -- customers will be impact of the credit is ok for now. david: parliament finally will vote today on theresa may's plans to leave the european union, with just about no one expecting her to win. the only suspense is by how much she will lose. we welcome david merrick reporting from london outside of parliament, so welcome. give us your take on

understanding that you do not know the number yet. david m: we do not know the numbers, but we know when it happens, it will happen around 8:00 p.m. tonight. the speaker announced there will be a few amendments voted on beforehand. those could delay the votes themselves. isryone, as you said, talking about how much is she going to lose by?analysts are talking by as much as 250 votes, and that would go down in history as one of the worst defeats in at least a century. others say it might be less. if it is less than 50, does that mean the deal is alive and she could go back to europe to ask for more concessions? either way, it seems she is going down to defeat. we expect to hear from her shortly after that. what is your plan b? that is what the rest of us want to know. it is all going to hinge on that margin of defeat, whether she has to come up with something radical or say, i just need a

little more time to negotiate more concessions of the european union. david: david merritt outside of parliaments, lots of flies and bells ringing during a looks exciting over there. thank you. bells?hat were those we still have sarah hunt of alpine woods. the trade is going to be hedging overnight with sterling in the bloomberg. you can see historically it is not that big of a deal, but in the last year and a half, we have seen a spike.how do you hedge something like this? sarah: unfortunately per u.k. assets, if you do not need to be in them, you avoid them until you get some kind of answer or it is cheap enough to say doesn't matter because this company is going to be cheaper because of sentiment but in the end, it will be fined. these binary of answer the brexiteven with vote. everyone thought it would be directional, but it wasn't for long. this has dragged out for so long that i'm not sure it will be as impact will, but you never know. that is why i think people are

trying to find some way of feeling a little bit like no matter what happens, they will be ok. david: the markets do extend -- what happens if they do extend the time for brexit? do the markets say that is a good thing? sarah: i think if they think the outcome will be better than it would have been otherwise been a hard brexit, they will say it is a good thing, but they will not see it strongly or for long. in the end, you are extending a question you have answered two years later. david: if you know it is extended, that doesn't tell you it will be a better outcome because we have had a long time already, and i don't think we have any clarity today than the first time they voted. sarah: which is like at exhausted with thinking how should i be investing in the process. this is why i think you see people avoiding u.k. assets because it is difficult to get out how that will be. people get tired of waiting, and i think extending it out will not necessarily be some huge contest. i don't think it is a huge positive. ,lix: if you take away brexit

the u.k. economy might not be that great and that leads me to europe because we had gdp for germany for 2018 so for the first time in five years. then you have china growth slowing and they are all interconnected, but when it comes to germany and their export market, how do you read that? sarah: this goes back to the earnings question. europe was not supposed to be this weak and we expected some softness in china, but it looks worse than people thought. in germany, they just escaped a recession for having two quarters of negative gdp. that is not the kind of backdrop in which all of these other things are meaningless, and i think that just adds to the concern about when our earnings really going to be, and can i gain them out? alix: sarah hunt will stick with us. coming up, delta airlines warns that government shutout will weight on airline demands. then and jamie dimon teaming up. it is bad for us. this is bloomberg. ♪ this is bloomberg. ♪

david: time for the bottom line, where we look at three companies with watching. for me, it is volkswagen and ford. we talked about this with jim hackett, the head of ford, they are teaming up with the global alliance. they will start making medium-sized pickup trucks fight with a 22. they say worldwide, with vans and pickups, they will save money, and they will explore doing electric vehicles and autonomous vehicles together, which is something that talked about.when i talk to him , he said it makes sense to invest so much in ev's and av's and we need to team up to protect our balance sheet. money?ou know who needs gold companies. the biggest gold merger ever, newmont buying bold -- old corporate $10 billion. this ceo of newmont had this to say -- >> at the end of the day, we are

positioned to go to a gold we are still open to ventures. alix: still open to joint ventures. with a $10 billion merger and .hey could still want to buy there is a big debate in the gold community, is bigger better? or do you want to be a lean mean midsize company? david: but they will have to cleandavid: up some stuff for newmont buys them. alix: they will do a lot of work but there is a lot of work in their synergies. storyms like an overtime because they also paid a premium, where baruch did not win the pot randall. david: now to the third story, we bring in brooks: from bloomberg opinion. -- we bring in brooks from bloomberg opinion. earnings did beat estimates, but they had been coming down because delta warned earlier this month that it was going to fall short on revenue per available seat mile.

that is a key gauge in the industry, the measure pricing power. that coming in pretty weak right now at the .2% for the fourth quarter -- at 3.2% for the fourth quarter. the coming quarter is claiming that partly on the timing of easter, which is later this year, and also foreign-exchange, headwinds, and the government shutdown. -- government pays to spend spends to pay employees all over the country and they don't have the money right now. david: the government shutdown a serious for a lot of people in hurting a lot of people. i wonder if it is becoming the new excuse? alix: wait until retail. we know how many in the government were not buying anything. >> that is a fair point and that is potentially a factor for delta, but people have been worried about this gauge of pricing power for some time. , thetioned it cut that second time they did that for the fourth quarter in two months. they also cut their estimate for pricing power in december, so

there has been a debate right now because all of the airlines are adding this opacity in whether they are going to be able to continue to push through fare increases and that is of the question. right now, i don't think investors are optimistic. alix: i have an idea, stop adding capacity. cut your supply. david: we have seen this again and again in the airline industry. as soon as they make money, they add capacity and son of a gun, the prices go down. >> and they always say, we have learned this time and we won't make mistakes of the past. investors are saying, why don't you show me through increased pricing power?right now, we are not seeing the gains people were hoping for. alix: sarah hunt is still with us. we take a look at the sector, do you like it? sarah: i think the airlines, you have upsides which means lower jet prices. i think you are right, every cyclical industry, they say they will do x and they do y. seatyou fly, every middle is taken and it gets

aggravating, so at a flyers never a bad thing.i think some of these are getting to the point where they look like they are interesting. if the economic picture doesn't get much worse, i think some airlines look interesting because they have come down a bit. are those still making money and not putting themselves in a situation where there is a debt ,roblem because that is typical especially in the airline industry, you can look and say over time, i can look and see out 12 months to 18 months and it looks good, so i'm in decent shape and you start to see multiples that make more sense than they possibly did before. alix: thank you. sarah hunt of alpine is sticking with this. coming up, the government shutdown threatens producers. we will discuss the why. this is bloomberg. ♪ his is bloomberg. ♪

alix: doug jones futures are in negative territory. sv losing all the steam they had. the media call is wrapping up,

we were waiting on the analyst call. the dax is off by .2%. on that story is the weaker german gdp. there is uncertainty in terms of brexit. haveer asset class, you the dollar that is modestly stronger. you have sterling higher when it comes to the euro. there is a lot of action when it comes to the currency market. no one knows with this is going to go. we just wrapped up with tbi. -- ppi. it's coming in at 2.7%. estimates on a month-to-month basis. by .1%.wer this is notice of prize. you wind up having weaker energy if there isall inflation, there is no emergency. that is my take away.

exactly right. we have the situation with growth, but no inflation. it's lighter than what they expected. by 2.7%.rgy is up what is your take? stable? i think that gives us a little bit more room. we are looking at the data to see what happens. if it came in hot, that makes it difficult. the feeling is they are going to pause. you want to see that continue to stay mild. that is showing you we still globally have a lot of capacity. you are probably seen it more on wages than on things. that probably gives you more room it to see what happens as we go forward. david: is the length of time shorter than it used to be? for how long? how long will we know?

is that march? sarah: i think the recent commentary i not just chairman powell and other members of the fed would give you the impression that may be march is not necessarily on the table the way people expected it to be three months ago. i don't know how long that lasts. if the data comes in quickly that it's hotter than people expected, people are expecting at least one this year, maybe two. it is really going to depend on what the data tells you. once that happens, your time window shrinks dramatically when the data is more ambiguous. unless they start talking about it, we don't know. david: every meeting is going to be sort of a live meeting. sarah: yes. i would expect if they came out of the gate and swapped it out to a nontraditional. you have a press conference now. pbi, digging deeper into

there were higher margins at wholesalers and retailers. what sectors are going to see ok margins? sarah: not the airline sector. said something similar. i think you have that problem. i think they tend to be areas where you have very trendy things for a certain amount of time. this is a question for apple and one of the reasons there has been such an issue with that. have we raised prices too high? if you can keep your costs in check, including labor, that's --re you will see a little reasonable margins. talking,we were just they did rise in november. they did cool in six years. energy,ack out food and

it's about 2.7%. service prices held on. you are seeing some market reaction. you see a steeper curve. there is more buying on the front end. out wast's time to find going on outside the business world. we have first word news. >> british prime minister theresa may faces the worst government defeat in parliament and 95 years. the question is not whether the plan loses, but how badly. publicly pledging to vote against the measure. if the margin of defeat is more than 60, the agreement will be close to death. generalce for attorney is trying to convince congress he will not interfere in the robert mueller investigation. the senate begins two days of

confirmation hearings. william barth released his opening statement. he promised he would let mueller complete his work. lawmakers are trying to figure out how to end the partial government shutdown. a group of republican and democratic senators are meeting to discuss possible ways out of the impasse. gap could vote on to stop spending measures. the president said he won't sign any measure that does not include money for a border wall. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries, this is bloomberg. alix: thank you so much. jamie dimon delivers again. he said in the media call that it's more of a political issue anything.an than if the shutdown is prolonged enough, it could reduce growth to zero. the fallout is being felt across all agencies.

owns and operates ethanol plants in the midwest. also with this is sarah hunt from alpine woods. for your outlook, where is the risk? >> there are two critical things happening right now with the shutdown for us. can we get the chinese negotiations done? can we get the 15, a blend of ethanol rulemaking by summer driving season. we needed it last year. we still needed this year. the president said he is committed to getting it done. the epa said they have enough to get it done by summer driving season. the shutdown could delay that. is there is no one to file paperwork? todd: it's a big process.

any people there to do it. there is no one there to do it. hopefully, they got a lot done before the shutdown. if it gets along much longer, it will be hard for the summer. david: you said there is a set process. today, came back to work is that give you a sense of how long you could afford to go? todd: if they come back today or tomorrow, we believe they can get rulemaking done. david: 30 days from that? todd: that would be a lot tighter. alix: there is a winter shift in your business anyway, you count on the demand. if people are using more product, there is a general gasoline demand. todd: gasoline demand still remains very good. pump. low prices at the if we can get more ethanol into the fuel system, it would reduce gas prices even more.

it's very important for the consumer in the industry. we do need the demand. we need the demand from the chinese. it's critical for the industry. it has seen a downturn over the last several years. alix: have you talked to the trump administration? todd: we talked to them all the time. we are in front of them all the time. we are trying to keep this on the forefront of the issues. these are critical issues. for the sole agriculture industry, a farmer, the corn belt, this is being impact by the shutdown and the trade talks. it's not just about ethanol. it's the backbone of american agricultural policy. we need is to take place in the government to open back up. david: listen to this.

we hear another consequence we did not anticipate. ?ow much of this is timing how much of it is longer-range? you get the wages back, things like that, how much can do longer-term growth damage. sarah: if i'm not going to fly today, the business trips i take might be one less. you're not going to get that back. with the wages, you get a shorter term. unless you get longer-term can i ask shutdown, you? how much export is expected? how much is the industry looking to export out of the u.s.? todd: 1.8 billion gallons. that is 10% of our capacity. if we could get them in for 300 theion more gallons,

industry would be a very different place. the farmer would be in a very different place. as we go through the cycle, we are going to plant again. we have an excess supply already and crops keep getting bigger every year. that is the risk we have. what are we going to do with this year cost crop. david: if you don't get the rule season, and you lose a what does that do? todd: for the industry right now, they have lost over $1 billion last year. they could lose that again this year. for the industry, it has a very big impact. it's not just hundreds of millions of dollars. a lot of these plants are owned by farmers. over 100 of them are. they are being impacted as well. low are being impacted by

margins in the industry. it's a double effect on them. then they have to plant again. it will catch up. cure for lowhe prices is low prices. inputl have a low-priced to compete against oil and gasoline. that is good for the industry. all right. thank you both very much for being with us. coming up, defeat is near certain. and thethe brexit vote challenges ahead. that's coming up. this is bloomberg. ♪

>> this is bloomberg daybreak. coming up later, john taylor from stanford university.

david: there is only one way out. that's what theresa may is telling her parliament today as they head toward a vote of her plan for brexit. she is been trying to deliver this for months. >> brexit means brexit. brexit, we are going to make a success of it. >> we are not leaving europe. we want to ensure that we get the best possible deal. >> the best possible deal for britain. is a voteote for me for strong and stable leadership. >> strong and stable dealership. >> we are looking for the best deal. >> i reached a deal with the other eu member states.

>> there will be a choice between a deal and no deal. >> we could risk no brexit all. >> the people want us to get on with it. >> get on with it. risk is notr leaving at all. the only deal on the table is the one we will vote on it. welcome sir bernard jenkins. he is the deputy chair for the conservative party. thank you very much for joining us. you've been a supporter of leaving the u.k. for some time. would you prefer leaving with no agreement to the agreement put before parliament? it with a straight choice between those two, i would rather leave without a formal agreement. it doesn't mean there won't be

formal agreements at all. there is a contingency action plan in place -- case there is no agreement. citizens, thee , a. citizens live in the eu are provisions being made for them. we will continue trading with the european union. it will be under the rules of organizationde instead of a single customs area. that is quite a big change. the advantage of leaving without an agreement is it ends the uncertainty more quickly than any other option. we see the consequences of leaving without an agreement. they are pretty dire. bernard: i disagree. they are scenarios based on an assumption the government takes

no mitigating actions. the treasury and the banking in 2016, they said we were going into recession. we were going to lose hundreds of thousands of jobs. the economy has generated thousands of jobs. the actions the government took, if we leave without a withdrawal agreement, the u.k. won't rely on the 39 billion pounds the wealth drawl agreement demands we pay to the eu is really. that's a big savings. that is 2% of our gdp. we can spend that on her own economy instead of giving to the other member states. that would boost growth if we live without a withdrawal agreement. david: they said they will take

you to court. you could be in litigation. bernard: the european union contains a clause in the treaty that says the treaty will cease to apply when we leave. that means our rights and obligations cease to apply. that includes the money. i would be happy to go to an international tribunal on that matter. payuld be happy for us to the european union some money if it sweetens the pill. nothing like 39 billion pounds. we are not getting a guaranteed deal anyway. that is one of the reasons why the withdrawal being promoted is bad value. would you back theresa may

in an early election? bernard: i would certainly back theresa may. all but a tiny handful of conservative mps would back theresa may. you back hurt, but not support her planet? bernard: i support what she says now, it's either this deal or no agreement at all. i am happy to leave without a withdrawal agreement so long as she sets the date. the u.k. will leave european union on the 29th of march. only a change in the law can change that date. if she sticks to that, she has my support. no deal at all and aleve and this deal, is there any path toward a different deal? bernard: there is a good

prospect. to say thatrepared set, the other side tends to that.ack and say the german foreign minister announced it would be difficult to change the text of the agreement, but there could be further talks. that leaves the door open for further discussions about how the deal could be improved so more people can support it. i think it's a very long shot. the eu have played very hard ball. the british people are tough and optimistic. we have faced far worse problems. leaving the european union without a withdrawal agreement as yourt be as bad shutdown in the united states. we won't be doing that to ourselves. david: i won't debate you on that one. there has been some talk of a

second referendum. would you favor that? do you have a projection of what would happen? people are less keen on brexit now. helped set up the vote leave campaign. we started miles behind. they said you didn't have a chance of winning and we won. the british people, many people think we might have to stay in the european union, they don't like it. they have seen some daylight through the door. they would vote more strongly to leave next time. it's a very divisive process. mps respect the decision the british people have already taken. david: thank you very much for your time today. everyone is so call.

david: apart from the bells. alix: four or five protesters are out there. jpmorgan is down 2% premarket. we will bring you some highlights of that meeting. bloomberg users can interact with the charts. -- recentowse region features. as is bloomberg. ♪

alix: j.p. morgan shares are down 2% in premarket's. the media call is very interesting. jpmorgan says we could see zero growth if the shutdown lasts a quarter. the middle of the call. we were on the media call. we heard from the cfo and the ceo. you mentioned the shutdown.

he wasn't very concerned as a relates to the business, it was about the consumer and the impact on global growth. that is such a big deal. fiscal andrned about political have to get together. number, a big headline the first question we got from the media call. we entered the fourth quarter risk on it. that is not helping and out. she is blaming client positioning and getting caught in the wrong trade. it deteriorated in december. we are not getting the guidance from citigroup. that's when the shares popped higher. the environment has really improved. we got some more conservative commentary that january looks better.

alix: any sort of insight yet on the analysts call. theor: she talked about growth as well and loan growth there. they see higher interest rates as a positive there helping revenue. interest margins are higher. they are benefiting from that as well. taylor riggs, thank you very much. that wraps it up for bloomberg daybreak. coming up, the open with jonathan ferro. this is bloomberg. ♪

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counting off earning season way. jpmorgan living down a tough q4. bank of america shows global gdp and earnings expectations plummeting. china plans even more tax cuts to stabilize the slowing economy after further signs of weakness. good morning, good morning. features are positive. against the dollar. treasuries are picking up a bit. in 2019, coming forming a consensus call in the new year it sounds like 2018. >> financials. financials. >> financials. >> you want to pick up value like banks. >> these compie