welcome to a special edition this martin luther king day of bloomberg markets. welcome to the program, everybody. let's get straight to the markets and have a look at what is moving here in europe and beyond. halfway through our session here on european equity markets. let's start there. stocks under pressure. down by about .2% this hour. moving lower. the session over in asia, where -- was a slightly more positive one. here in europe we factored in of course a lot of the more positive news around trade in friday's session. friday was a strong session for european equities. we slumped at the opening in europe and have gone effectively sideways. some of the positives coming to the market, around what china can do to reduce its trades imbalance with the united states, that's factored in. that was pricing over in the asian session. not being put off too much by the other headlines around weather these trade talks would stumble on intellectual property concern. we have the yuan in there for you to show it hasn't moved all that far on the slough of

chinese data. we'll get to that later on in the program. we wait for ont, teresa may to deliver a speech to parliament on her plan b. how much like plan a will it look? let's get then for you, just gone 12:00 here in london. a bloomberg first word news update. >> president trump lashed out at house speaker nancy pelosi after democrats rejected his latest plan on the border wall. the president accused pelosi of acting irrationally and of turning into a radical democrat. president trump has offered to temporarily protect young immigrants who entered the country illegally as children in exchange for money for the wall. the chinese economy grew at the sloast pace since the 2008 -- slowest pace since the 2008

recession. chinese government efforts to cushion the deceleration are taking hold. and former nissan chairman is making a last ditch effort to be released on bail in japan. he's offered to wear a tracker and have private security guards. he's in the third month of detention in allegations of financial misconduct. lobal news 24 hours a day. this is bloomberg. >> thank you very much. the prime minister here in the u.k., teresa may, returns to parliament today after halting cross-party brexit talks. and we'll seek -- will seek to do what the european union has long rejected, rewrite the irish back stop. this as the e.u. is said to be split over how long they thinking the u.k. should delay brexit for. on the brussels side of things is maria from belgium.

we've spent the weekend here in the u.k. trying to work out what it is that teresa may ploomsed to not change with regards to her brexit plan. we wait to hear in 3 1/2 hours here in the u.k. what she is planning. what are you waiting for there? brussels? -- there in brussles? reporter: good morning. really in brussels it comes down to what is in plan b. i would say or point, rather, to a spokesman from the head of the european commission who just told us if she needs answers, they're not going to come from brussels. i really think this sums up the mood today. we've heard from a number of foreign ministers who have said, it's up to london, it's up to teresa may. but at this point, we need to get a plan that is different to that that was put forward to a vote and lost by moren 24500 and it's got to be something -- 200 and it's got to be -- more than 200 and it's got to be something that can get to the u.k. parliament. not much optimism at this hour.

>> not much optimism there. ever since we heard of the rejection of teresa may's plan in parliament last week, there was some confusion understandably from the e-27 but overwhelmingly the message has been, u.k., london, you need to decide what do you want first. i guess that's where the emphasis is still. reporter: that is the manufacture sills. the bottom line for many members of the european union is two years after the vote, the u.k. has really not decided what kind of relationship it wants to have with the european union. until you get to that line, it will be difficult to get the deal done. the e.u. has said maybe there's a little bit of wiggle room but there are items like the irish back stop that really must be in there. at this point keep a very close eye on the irish government. it is a major stakeholder here and pretty much holds the key as to how much the e.u. can give into the u.k. until we see that plan b, there's very little in the eyes

of the european leads that are they can put on the table. the deal in their eyes is dead. she has to come up with a new plan. i would also say in terms of article 50 which, to strip away the jargon, means extending that brexit deadline, there's also a little bit of division in the e.u. some member states really saying at this point, why should we give more time? she has to make it very clear what she potentially is going to use this time for. is this a new election, a new vote, or more time to get concessions? if that is the end game, there are countries that have made it very clear, like the french, that they do not think it's a good idea. but i would also point to angela merkel over the weekend. she struck a different line and said at this point it's not just down to the u.k. we all have to really come up with a compromise. that is very different to what we had heard in the past weeks. anna: yeah. angela merkel and the word compromise getting headlines. thank you very much. maria joining us from brussels.

for moin, joining me, ian. absolute strategy research where he's chief strategy, of course. very good to see you today. let's talk about u.k. assets. in an -- from an equities perspective, we see the u.k. going its own way today. as we've often seen in times of big decisions around brexit. u.k. stocks, what would it take to change that? >> you have to have some greater sense of a way forward. i think at the moment we still view this as a very chaotic process. where the probabilities of those three options, you know, no deal, no exit, or the second referendum. look very equally weighted. so it's still not an investment decision. it's just a punt at the moment as to what we get out of it. and that's what we want to see. unless the exchange rate comes down aggressively which makes the international stocks much more attractive, it's still a steal on the sideline. anna: let's listen to what

goldman sachs had to say about the pound. just like many in the market, there seems to be an assumption that things have turned softer. let's listen. >> we would read the development over the last week as pointing toward a later, softer brexit or potentially even no brexit at all. the distribution of risk around the pond we -- pound which think are becoming much more favorable. plenty of uncertainty there but we think there's a lot of upside risk to the pound. we think it will be the highest performing g-10 exchange rate this year. anna: goldman sachs there. i've got the chart of what we've done so far on sterling. u.k. see it moving high in january. it's a commonly held view that we get something that looks softer or later with regard to brexit. >> when you look at the long-run relationships between sterling and other currencies, there is upside. but when you look at the things, even if we get a deal, we still have a large deficit and budget

deficit. there are still u.k. problems and the only way to deal with that is having a weaker exchange rate for a period of time and the bank of england have shown throughout these crises that when push comes to shove, they would rather let sterling go. so we think that's very dangerous. we still have the risk that sterling actually heads down against the euro from these levels. anna: when you consider what is pushing the pound higher, this is this view that something softer will emerge, do you go along with that? >> i think the danger is that the risks of a hard blecks its which we had around 10%, have rizin. but at the same time the range of possibilities has widened out. with the introduction of the second referendum, getting clearly much more traction here. so i think the risk that we go -- that we have a very biferre cated outcome where there's little opportunity to make a real investment decision is still very high.

so we're saying -- saying to people, look, there's lots of things to invest in in the world. do you have to worry about the u.k.? small country off continental europe. that is really the place it should have in your portfolios. anna: what underline performance o you see? inflation is still running pretty high. >> we would say that's unlikely. although there is the focus of the policymakers on the unemployment rate, on the inflation rate in labor markets, we worry that economic activity is decelerating very harply is -- sharply. investment intentions are coming down. when you look at the broader picture and the degree to which that international trade component plays a role and those international stocks in the u.k. equity market, that could be a very big drag given our negative view on global outlooks. anna: thank you very much. harnett.an

u.s.-china trade tensions. we'll talk about that next. president xi's top economic advisor will be in washington for the next round of the talks in about 10 days' time. we'll look at the make or break issues and how they weigh on the markets. that's next. this is bloomberg. ♪ g. ♪

anna: live from london. i'm anna edwards. this is a special edition of bloomberg markets. the agreement for trans-pacific partnership held its first meeting in tokyo over the weekend. the countries have signaled that

they have an intention to expand the pacific rim trading block. in an exclusive, bloomberg exclusive interview, the new zealand trade minister told bloomberg what hurdles someone has to cross to join the group. >> they have to be willing to agree to high standards that are provided for in the agreement. it's a modern agreement. it has rules surrounding internet commerce, electronic commerce. rules about subsidies for state-owned enterprises trading abroad, a myriad of rules that make sure the benefits of trade flow to small businesses, not just multinationals. and we were discussing how we have designed this agreement in a way to enable other countries who want good, international rules applying to trade and if they're interested, they can join if they're willing to adopt those high standards. reporter: in terms of what kind of support, right now it's potentially an 11-member group. seven are fully ratifying

agreement. does someone have to be let in unanimously? can they be let in conditionally? we're not doing that yet, but we'll do it in the future? >> it's already an enormous agreement. 11 countries. seven of whom already are ratified. 13.5% of the world's g.d.p. 500 million people. $10 trillion u.s. of g.d.p. so it's already a very powerful trading block. some of the rules within the agreement are only as good as they are because the u.s. power was, at that stage, brought to be in the negotiation before the u.s. chose not to proceed. i think that there's unanimity amongst the parties that any new country joining cptpp has to be willing to meet the high standards already in it. in terms of exegs that were agreed by the parties on saturday. reporter: do you have actively

countries saying yes, we want to get involved in the process? >> there's a number of countries that have expressed interest. colombia initially. although they may have gone cold following the recent election there. the united kingdom has expressed interest. thailand has been talked about. we're not expecting any of these things to be realized in the next six months. we're committed first and foremost to implementing the very good terms between ourselves for a start. reporter: how about the u.s. > it's up to the u.s. largely. the u.s. would be welcome to come back. they're of course the largest economy in the world. some of the rules they negotiated in the orlando t.p.p. negotiation are important to the other countries -- original t.p.p. negotiations are important to other countries, as well as to the u.s. anna: that was the new england trade minister talking about what used to be the t.p.p., trans-pacific partnership, but now the cptpp, more acronyms and potentially more members. maybe on the u.k. one day.

still with me here on set to discuss trade, ian harn tembings t from absolute strategy -- harnett from absolute strategy research. how optimistic are you around global trade? we have the chinese giving signs that maybe they will take action to eliminate their trade imbalance with the united states. then contrasting headlines suggesting maybe intellectual property gets in the way. how optimistic are you on the trade talks? >> we feel you have to see some progress on both that intellectual property side and on the bilateral trade deficit. the trouble is that as the chinese manage to look to reflate their economy and u.s. growth starts to disappoint, it's going in the wrong direction. u.s. exports to china dropped almost 30%. that's not going to help your trade numbers. we're in a situation that we feel is still going to be a very drawn-out process, some of the optimistic expectations about resolution might be actually disappointed in the short term.

but we would still hope that through the end of the year, we would see some stabilization of tariffs around these kind of levels rather than acceleration. our bigger worry is about the eurozone. anna: i have a chart that suggests something else to be worried about and that's south korean export. it's a bitch niche but a lot of people -- it's a bit niche but a lot of people look at it. >> it's important. behind the story of trade, there was a slowing of global growth taking place. what we see is these trade stories are actually just exacerbating that downward pressure on global economic activity. we think that's going to be a big drag in global g.d.p. and one reason why we're relatively cautious on a whole range of risk assets. the trade tariff story isn't the only thing that's going on here. we've got a lagged affect of slowing global economic activity, as you can see from those chinese g.d.p. numbers this morning. anna: even if we fix global trade and the tensions between the u.s. and china, we'll still

be late cycle and that throws up a specific kinds of strategy. >> exactly. when you look at what's happened in terms of the economic cycle, we're right at the peak. when you look at levels of unemployment, they're at record lows. record margins, record highs. all the signs that we've just hit that peak cycle and we're heading into that late cycle phase. typically it lasts 18 months and it's the lagged effects of those rises in interest rates, those higher real rates, that strength of the dollar, those are the kind things that start to weigh on the global economy and make you nervous about risk assets, about emerging market equities and commodities potentially. earnings reports we've seen so far look like cycles? are there businesses talking about it in that kind of way? >> yeah. and i think we do see that. we see that in the way that the analysts' revisions, the way we managed to beat some of these

expectations is the analysts' revisions have come down at a faster rate since 2008, 2012. periods of really deep economic slowdown. we're very unusual. we think you're going to have negative global earnings growth in 2019. so we think you're already seeing these signs coming through from the analysts, from things like those export numbers, from the oil earnings numbers that we're going to get and even in the equity market itself. industrial versus retail. anna: recession? >> yeah. i think that is still an early story in these markets. not many people on that yet. anna: thank you very much. ian harnett of absolute strategy research stays with us on the program. still ahead on bloomberg markets, data exposed. blackrock accidentally posted confidential information about thousands of clients on its website. we'll get the low down on what's behind that story. this is bloomberg. ♪

anna: welcome back to bloomberg markets. live from london. i am anna edwards. european equity markets down by .2%. time for a bloomberg business splash now. a look at some of the biggest business stories in the news. japan's at that keda pharmaceutical is considering a sale. bloomberg has learned that the company is working with bank of america to gauge potential buyer interest in a number of medicines. they are trying to cut debt after its $62 billion takeover. investors in nintendo starting to feel optimistic again. the company has been battered by slower than expected sales of the switch console and a steep share decline. but price cuts for the device and the upcoming launch of nintendo's biggest mobile game in two years are boosting confidence. shares are up 22% since december. a big sale for japanese aircraft leasing company smbc aviation

has agreed to buy arrow craft for a list price of $7.5 billion. neos anes include a-320 nd a-321 neos. that is your bloomberg business flash. on to another business story. blackrock is doing damage control. the world's largest asset manager accidentally posted confidential information about thousands of financial advisor clients on its website. joining me now is bloomberg's financial investing reporter with the latest on the story. tell us what exactly happened. what is it that blackrock is supposed to have released here? reporter: there were thousands of documents. blackrock is the world's largest asset manager. also the world's largest provider of exchange traded funds and some of the information that was posted on spread sheets contained information about financial advisors that sell products for blackrock. to their own investors.

many of these financial advisors were given names or, depending on the kind of services that they did provide, including whether they were a power user, meaning that they actually sell a lot to their investors or dabblers -- anna: it seems as if we've been let in to blackrock code here for the way they categorize customers. reporter: correct. these financial advisors, they're one of the biggest mechanisms through which exchange-traded funds are bought and sold. in the u.s. and so it would very much help a money manager to know what their usage patterns are and how financial advisors use their products. it's, after all how they make a lot of decisions on how they market and distribute these products. anna: is it clear how this information came to be in the public domain? a lot of these executives will

spend time thinking about keeping their data away from hackers. but that's not supposed to be what's happened here. reporter: no. it was inadvertent. all of the details are not yet apparent on how this data came to be released. it's embarrassing. but it does seem accidental. and for clients and financial advisors whose data got inadvertently released, they will probably be looking at how blackrock responds to the situation and mitigates whatever information might be there. anna: have they said much about this yet? reporter: they are not. today being martin luther king day in the u.s. and it's closed, it's the probably not very likely we'll know what -- probably not likely we'll get to the bottom of it today. anna: not the first business to inadvertently share this information. other financial services businesses have accidentally shared information in the past. reporter: that's correct. anna: j.p. morning i remember suffered one of the industry's -- jpmorgan i remember suffered ne of the industry's largest

information sharing. coming up, the latest global economy outlook. that is due in about half an hour's time. we'll look at how politics from brexit to the united states, china trade tensions, how all of that weighs on global growth next. plenty of headwind for the global economy there. as we head to dab osaka later on in the program, the -- dabos later in the program, global c.e.o.s and policymakers all gather to talk about the strength and weanings of the global economy. what can be done to improve that. we'll be on the -- getting the low down and talking about how global wealth is shared. this is bloomberg. ♪ erg. ♪

anna: goods afternoon. live from london. i'm anna edwards. this is a special edition this martin luther king day of bloomberg markets. european equity markets sluggish

this morning without the united states, of course, slumped at the start of the trading day, we've gone sideways since, without the u.s. this afternoon. down by .2%. we put in the chinese currency. we didn't move much on the currency market. in terms of the u.k. story and we are gearing up, 3:30 u.k. time, that's in three hours' time, we're going to hear from the prime minister here in london. with regard to her brexit plan. the pound is entirely flat as we ait for teresa may to speak. reporter: a second summit next month between president trump and kim jong un is likely to take place in vietnam. bloomberg has learned the meeting will probably be held in noi, although the -- other

cities have also been considered. there's been little progress toward the u.s.'s ultimate goal of getting north korea to give nuclear weapons. trade talks between the u.s. and china are falling short on a key issue. bloomberg has learned there's little progress on what the u.s. has called decades of chinese theft of american intellectual property. that formed a large part of the agenda of talks in beijing earlier this month. negotiations resume at the end of january in washington. and athens, protesters battled police in protests. the country will change its name to the republic of north macedonia in exchange for greece dropping opposition to its bid to join nato and the e.u. demonstrators say macedonia should only be used to refer to greece's northern region of that name. lobal news 24 hours a day. this is bloomberg.

anna: thank you very much. let's talk about china's growth now. china's economy expanded at the slowest pace since the global financial crisis as the domestic financial cleanup weakening global demand and trade conflict with the united states, all dampened momentum. the latest gauge of china's economy takes on extra importance amid concerns about the sustainability of the ountry's economic miracle. >> consumption, investment and net exports. the three tenants of g.d.p. are all under strain in china. economists are closely watching infrastructure as any pickup in government spending shows up first here. while we have seen an effective halt on projects, including transport, that looks to be changing. beijing is reportedly targeting a budget deficit of $2.8 -- 2.8% of 2019 g.d.p. up from 2.6% guidance last year. with more than $120 billion of rail projects announced over the

past two months alone. dusting off the old debt playbook points to the urgency among policymakers who are also facing cooling global growth. add to that a trade war which hit exports in december with an unexpected contraction. on the domestic front, the malaise are showing up in weak consumer spending data. the microeconomic factors are firmly in beijing's sight. more policies reportedly on the way, including further tax cuts and measures to boost purchases of cars and household appliances. the key will be getting the stimulus dosage right in the midst of a rocky u.s.-china elationship. anna: breaking down the numbers for us there. ian harnett, chief strategist, is still with us on set. amongst all the gloom around the slower chinese growth we're seeing than we've precedely

seen, we community lose sight of the fact that just in the last year china added to the global economy, an economy the size of australia. the machine is still growing at a rapid pace. >> yeah. you have to recognize that china, until it slows around to 4%, keeps adding to that. rest of the world will see chinese share of economic activity continue to rise. and that's why it's so important for the global economic data, but also for global equities as well. you can account for about 60%, 70% of equity performance, just by looking at our china tractor -- tracker, for example. critically important here. anna: i've got on my screen the world currency rancor. it's got the performance year to date of asian currencies. third on the list is the c.n.y. what is your expectation for chinese currency as we head through this year? because it's clearly bounced. there was a lot of nervousness last year around it. >> i think if you're going to see some of that dollar weakness that people are talking about,

then you've got to see some of these other currencies appreciate. what we see here is that china is one of the only major economy that's capable of really reflating. we've seen some of that on the monetary side already last year. we're seeing more of it this year coming through on the fiscal side. but our concern is that that just shows you how much pressure there is on the chinese economy. the upside here is potentially limited relative to some other currencies. anna: you think the whole emerging market space is not ready yet for a rebound? >> no. we've had a very nice rebound at the end of last year. we saw those risk assets come back into play after the oversold situation in december. and we just think that's a bit premature. because if global growth is slowing, if u.s. growth is slowing into this, and if we are in a late cycle, typically emerging market equities tend to do relatively badly. and it takes time for these stimulus measures that china's

putting in place to actually work through. potentially 14 months after those interest rate cuts, after those monetary expansions, perhaps the fiscal expansion works slightly faster. really we're not going to see the growth until next year. we think you're going to see sub-6% g.d.p. growth in china averaging this year and it's not until next year that you're going to get back above that 6% number. anna: one economy not far from here that's going to be keenly watching any kind of stimulus in china is germany. i've got the trade function on the bloomberg here which shows the interlinkage between german imports and exports and total trade and the lynx with china are clear to see. how weak do you think germany gets in 2019? >> i think it's going to be very difficult. we're seeing signs of an industrial recession coming through in germany. i think a lot of people feel that there were concerns about just the auto numbers being about emissions restrictions. we think that's far too optimistic. globally we're seeing these auto numbers weaken. we think -- and also germany is

the entry european multiplier. so that weakness of the german industrial sector, remember, german exports are equivalent to 50% of german g.d.p. anna: export story. yes. >> this is absolutely crucial to the german and the european story. anna: it must be crucial to the e.c.b.'s calculations as to whether they can get rates out of negative territory. can they get them off the levels, do they even get to be less negative? >> i think it's going to be very difficult. we've seen them wanting to ease back on the tapering, to improve that. but already we're hearing stories about tltro's, ways of bailing out chief loans to the banks, being reintroduced as early as may. this is not an environment. we're worried that economic growth is actually slowing in the eurozone. we're already seeing expectations of unemployment rising amongst consumers and expectations about employment falling amongst the corporate sector. so we potentially are already

seeing the turning point for the eurozone economy and that's, i think, a worrying situation. anna: you're neutral on eurozone equities. >> they're discounting a lot of bad news already. in terms of valuations, it now, eurozone that is a lot cheaper than those asian markets. asia on our valuation metrics relative to the last three years is looking more expensive than the u.s. so after the u.s. has come down, asia now looks exposed. we've got too far ahead of ourselves on that story. anna: thank you very much. thanks for your thoughts so far. ian harnett stays with me a little bit longer here in london. some breaking news now. potential history making. the democratic senator kamala harris says she is running for president in 2020. she would be the first african-american woman to be a major party nominee for the presidency. if she ultimately secures the democratic nomination. it would be a long road ahead, of course, to go from here to

there. but certainly significant making that announcement on martin luther king day. 12:38 here in london. coming up on the program, global leaders gather in davos, switzerland, the trade war between the u.s. and china and tightening central banks simmer in the background. along with the -- [inaudible] -- we'll have a preview of everything you can expect from davos. this is bloomberg. ♪ this is bloomberg. ♪

anna: live from london, i am anna edwards. this is a special edition of bloomberg markets. biggest business stories in the news right now. reporter: tesla has been cleared to start delivering its model 3 electric sedan in europe.

delivery should start next month. it's a big priority for tesla's c.e.o., elon musk. in a shareholder letter, the sedan market in europe is more than twice as big as it is in the u.s. the c.e.o. of just eat is leaving the food delivery company. he will be replaced on an interim basis by chief customer officer. they're facing grower competition from uber and subaru. and in italy, regulators have turned down the plan to separate its landline networks. authorities argue it's a spinoff of the company's most valuable asset, it wouldn't help boost competition in the domestic market and the phone network is worth $17 billion. they have one of the biggest debt burdens in the european telecom's history. that's your business flash. anna: thanks very much. the world economic forum's annual meeting in davos in switzerland begins tomorrow. global leaders are convening

against a back drop of slowing growth, trade tensions and geopolitical uncertainty. notably absent, of course, from the forum, the u.s. president, donald trump. u.k. prime minister teresa may and the french president, macron. joining me now, though, somebody who is there on the slopes in davos. bloomberg executive editor for economics. good to have you with us. no escaping concerns around global growth, i suppose, at this year's event? reporter: no. the i.m.f. in just a few minutes will release the latest update of its world economic outlook. that might shape the tone for the talks for the rest of this week. coming into it, we saw that china data this morning, a little bit strong in parts. but overall some weakness towards the end of the year and the signs from the chinese government that they're going to try and keep the slowdown managed. not necessarily going to revert it any time soon with the big stimulus we saw in previous periods of weak growth there.

the u.s. shutdown, the trade war, all kind of overhanging the world economy as it meeting gets ready to kick off. anna: it's been used to talk about global trade. i remember the chinese doing that very notably. this year we're without president trump. he of course has spoken with the delegates in davos in the past. are we expecting to get a lot of new flow around trade? >> i think trade will be a huge part of the conversation. based on the panels or in the corridors. a lot of trade representatives from different countries are here. they'll meet towards the end of the week. it's quite hard, though, obviously to engage on this conversation when the americans aren't here. it might let others have the chance to set the agenda. so it's going to be a big topic with disappointment that the americans aren't here. anna: in amongst the snow and the phenomena doucettes, i know that many of the billionaires there talk a lot about how to make global capitalism work better and work for more people.

but at the same time i knee bloomberg's been doing research on how much richer those global billionaires have been getting. the 10 years or so since the global financial crisis. reporter: yeah. we looked back at 2009, which was the midcrisis davos. we took 12 people who were there their time and looked at wealth and what they've done since. it's interesting. from the depths of recession so to speak. these people are richer, much richer. billions of dollars richer than they were a decade ago. at the same time inequality has built up, a lot of people don't feel their life has improved in that recovery. so certainly it's a tension point here. how do you -- discussion points as well, how do you find a solution for that? and certainly, in some ways, that rise of populism that you see manifested in things like the trade war and brexit and the

has f donald trump, that its seeds somewhat in the failure of governments to really socialize that recovery from the crisis, a lot of banks were bailed out obviously. a lot of people got rich subsequently. but there's a lot of people who feel a bit out of kilter with the recovery. disappointment is often manifested at the ballot box. anna: really fascinating to understand how much people there think the backlash has just begun. or is very well entremplinged. lots of fascinating conversations -- entrenchinged. lots of fascinating conversations -- entrenched. lots of fascinating conversations to come, i'm sure. a busy week ahead for the team in davos. still ahead on this program, the longest ever u.s. government shutdown drags on. that's why trump and team are not in attendance in davos. we'll look at how it could impact the world's biggest economy and the fed's policy path. this is bloomberg. ♪ this is bloomberg. ♪

anna: welcome back. live from london. i'm anna edwards. this is bloomberg markets. the longest ever u.s. government shutdown is extending into its fifth week. while president trump's feud with house speaker nancy pelosi is heating up, the two sides are taking small steps toward compromise. the president has oftened to -- offered to temporarily protect young immigrants brought to the country illegally as children in exchange for money for his border wall. just how much of these -- are these two sides coming to the same page? is that possible? let's speak on the phone now to bloomberg international government executive editor. very good to have you with us. these small steps we've seen over the weekend may be signs of some kind of compromise. what are we expecting when congress resumes tomorrow? ill we see on the one side the dreamers on the other side and the wall? reporter: as you say, both the

house and senate are back tomorrow. the republicans in the senate had said they plan no votes for this week. but now they intend to try and push forward donald trump's propose and see if they can peel off some democrats there. have been small signs of movement that you talked about. but there could be some way from a breakthrough. so far the democrats are staying united in not wanting to reward trump for shutting down the government. equally, a border -- that said, equally there are republicans who might feel that donald trump is offering too much. so he also needs to tread carefully in what he's offering. anna: what kind of -- trump continues to attack nancy pelosi personally, spoice. the two not getting on all that well. amidst all of. this away from this personal disagreement, though, other democrats seeming to be reaching out at least a little bit. reporter: yes. some democrats might agree, if, he for example, donald trump offered a permanent stay on the

deportation risk to some immigrants. so going beyond three years and saying that he would make it permanent, effectively a broader amnesty deal in return for some money. but it's still the fundamental issue of them agreeing to give the u.s. president money to build his wall or to reinforce the border as it is. and that's really a line to many democrats to get across. and nancy pelosi holds the keys to the house. she's a formidable negotiator. she's trying to hold that democrat unity against trump at the moment. anna: we heard within the last few minutes about kamala harris and her plans to make history essentially with the 2020 presidential bid. has this come out of leeland? is something that's surprised -- left field? is this something that's surprised people? it's getting crowded on the democrat ticket. reporter: it is indeed. there has been talk about her for a while. she's made a symbolic announcement today on martin

luther king day. she has a gentleman make an-born father and -- jamaican-born father and indian mother. she pushes a strong message of social justice. the backing of african-americans could make her a strong candidate in the primaries. that said, it will be a crowded field. possibly more than 20 to start with. she could be vulnerable on the economic policy front. that's where she has less form so far. anna: maybe not such a history as somebody like elizabeth warren. thank you very much for joining us. the latest on the u.s. politics. this martin luther king day. that's why, of course, we have the special edition of bloomberg markets and u.s. markets are substantially closed. still with me, ian harnett of absolute strategy research. let's talk about the shutdown. to what extent this is going to have an impact on the u.s. economy. because short shutdowns for many investors and economists are

sort of dismissed, if they are very short term. >> yeah. the longer it draws out, clearly the bigger impact you get. the short-term impact is that policymaking becomes much more difficult because we don't have the data. so that's going to be one of the things that we can front over the next few weeks. is how will the fed make their decisions? but clearly for those people who are expecting, like ourselves, further rate rises, the longer the shutdown goes on, the bigger the drag on the u.s. economy that was already showing signs of slowing quite aggressively. for us that's the real problem. anna: the u.s. administration doesn't like interest rate hikes. this is certainly one way to keep interest rate hikes at bay. what kind of pause are you expecting from the fed? because the fed is starting to cite the shutdown as one of the uncertainties for the u.s. >> at the moment we're still talking about pauses. so fours, that -- for us, the narrative is still on the labor market. initial claims keep coming down. unemployment rates are low and

the wage rates keep going up. we think we'll see rate rises this year. even with that sign of economic growth slowing. probably from close to 3% down to close to 2.25% and maybe lower next year. anna: you expect those to materialize, hence your concern around credit markets in the united states. >> absolutely. our worry is that there's going to be a persistence of that that's stability and going to be set against a slowing economy where debt levels are very high amongst corporates and where the quality of debt as well as come down significantly. 47% of all investment grade paper triple bill or lower. it doesn't need to move far. we're worried that starts to get triggered. in the past, high yield has typically gone up to something like 700 basis point spread as you move toward a recession. all our recession risk models are starting to rise. anna: yet, you are overweight

u.s. equities. at this stage of the cycle, you still think there's more to run? >> overweight relative. that's the important phrase. we're talking about global equity markets, having a second double-digit year of decline. so we'd end up in a structural bear market but not bad enough to really turn around this fed narrative. but against that back drop, usually the u.s. equity market outperforms and the dollar does reasonably well. so the first half of the year particularly we think that dollar will be stronger and the u.s. market outperforms because it doesn't have as many banks and financials as the rest of the world. anna: the u.s. equity market doesn't do that badly. so the fed does not need to pause that long. >> that's the risk that you get. that's why they have this willingness to carry along their existing package. if it's hard to try and cut rates if you see the banks being under pressure, when last year they earned $100 billion of profit between them. that doesn't sound like a crisis. anna: linking back to the

conversation about davos and some of the guest c.e.o.s a and global banks there and attendees richer than they were 10 years ago. thank you very much for your words this morning and this afternoon for your thoughts. ian harnett of absolute strategy research with us here on this special edition for martin luther king day of bloomberg markets. european equity markets on the back foot. without the united states this afternoon in european trading. that could be having an impact. the footsy 100 a little bit morrow bust. we'll speak -- little bit morrow bust. come -- more robust. coming up, we'll talk about brexit, building toward the 3:30 speech from teresa may. we'll hear from teresa may, the u.k. prime minister, about her plan b. this is bloomberg. ♪

anna: very good afternoon, everybody. 1:00 here in london.

8:00 a.m. if you're in new york. i'm anna edwards. welcome to speags edition of "bloomberg markets" this martin luther king day. many of the markets in the u.s. are closed this afternoon. but we are here and trading in europe. the stock 600 in europe down by .3%. the aircraftian equity session was fairly robust -- asian equity session was fairly robust. intellectual property is one of the bloomberg headlines. we have a slough of data giving arguments or followers to both sides in terms of global growth a slough of data from china. we're fairly flat on the chinese currency as a result. let's look at the u.k. board. we are waiting in a couple of hours' time, we're going to hear from the u.k. prime minister. a plan b. how much will it look like plan a? that's a key question. and the pound is almost entirely

flat as we wait to hear from the u.k. prime minister. we've just got news out across the bloomberg, the red headline this afternoon, the i.m.f. cuts grouth outlook to the sloast in some three years -- slowest in some three years. we were talking about the slowing global growth story. that no doubt will be part of the conversation on the slopes of davos. as the global elite gather to talk about the global economy. let's check in with sebastian, he has the bloomberg first word update for you. reporter: another democrat is running for the white house. kamala harris of california used the martin luther king holiday to announce what could be a history-making canadasy. she has a jamaican-born father and indian immigrant mother. president trump lushed out at house speaker nancy pelosi after

democrats rejected his latest plan on the border wall. the president accused pelosi of acting irrationally and turning into a radical democrat. he's offered to temporarily protect young immigrants brought to the country illegally as children in exchange for money for the wall. in china the economy grew last quarter at the slowest pace since the twine financial crisis. g.d. -- 2009 crisis. factory output have picked up in december. signs the chinese government effort's to cushion deceleration are taking hold. and a spectacular show for north and south america and parts of europe. the last total eclipse of the moon until 2021. the period known as totality when the moon was completely bathed in earth's shadow, lasted an hour. it was also the year's first supermoon when a full moon appears brighter because of its close position. lobal news 24 hours a day.

anna: thank you very much. thanks for joining us. seb with the first word update. we'll get more on those stories in just a moment. i want to return to the i.m.f. breaking news. cutting its 2019 world growth outlook. wanted to give you composition of where those moves are coming from. they've lowered their 2019 euro area forecast to 1.6% versus 1.9% in october. that was their estimate. so that's where the substantial revision seems to be coming from. they haven't changed the u.s. or china. even though they cite global trade as one of the key concerns. i know the i.m.f. managing directer is currently briefing the press in davos. we'll look for more on that. joining me now from brussels is a jpmorgan asset management global market strategy. we're just getting this downgrade to global growth from the i.m.f. it. seems that europe is -- i.m.f. it seems that europe is their

main concern and global trade. does that chime with your thinking, the weakness, the trade story manifesting it self in the eurozone? >> yeah, definitely. we expect to see a downgrade of global growth forecast and we had revised down our own eurozone group forecast for 2019. obviously globally we have reached the peak for this cycle in terms of growth somewhere at the start of last year. we're seeing a slower momentum as we enter into 2019. the main reason is trade. it's a self-inflicted wound. europe has obviously more than just trade to digest at the moment. we must remember that we have the implementation of these co-2 emissions in europe which puts the german industry, auto industry, to a halt. we also saw climate effect with the low-level -- [inaudible] --

and more generally speaking, the uncertainty on the political level. brexit and other countries, france, belgium, italy at the moment. convince vorable to businesses to continue to invest or consumers to consume. we have a couple of difficult weeks behind us in terms of retail sales. the movement of the euro vest in france, obviously the climate and all this stuff is not helping. europe, definitely probably one of the regions which is the most hit by this weaker global trade environment on top of -- [inaudible] -- elements as usual. anna: right. we're watching live pictures of the i.m.f. delivering the latest outlook and give the context behind it. do you think then, with this a

back drop, trade is a concern, to the extent of that weag on europe, do you think they'll be able to lift rates as it has signaled it intends to toward the end of this year? >> -- [inaudible] -- probability is declose creasting with weaker macro-- decreasing with weaker macroeconomic data. there's a higher probability that the e.c.b. won't be able to hike rates this year. there are imple -- they are implementing the kwantative tifling as we speak -- quantitative stifling as we speak. due to the social unrest that we have seen in some countries, some government ought to ncrease their fiscal deficits. so -- [inaudible] -- for the e.c.b. to remain low debt costs in 2019. this is the case in france and italy. so -- which is probably one of

the reasons we let further pressure on the e.c.b. to keep rates on hold. as time passes, it becomes more likely that mario draghi will leave the office with an increased rate at the end of this mandate. anna: ok, thank you very much. vincent juvyns. regularly appears on bloomberg tv in this part of the world. more from him as we go through this -- through this hour of programming. coming up, prime minister teresa may returns to parliament today after halting cross-party brexit talks as the e.u. is set to be split over how long they think the u.k. should delay the exit. we'll talk more about what either side of the channel and all the other views have to say on this subject. a big day in the brexit story. this is bloomberg. ♪ . ♪

anna: welcome back. live from london. i'm anna edwards. this is "bloomberg markets." let's talk about what's going on here in the u.k. with regards to politics. because we want to talk about the battle over brexit. prime minister teresa may is due to speak in just over two hours' time. joining us is a u.k. conservative m.p. campaigner for brexit. good to have you with us. i want to ask you what you're expecting teresa may to say in over two hours' time. do you expect her plan b to sound very much like plan a? >> i hope she will set out the ways in which she's going to go back to the european union to negotiate some of the elements of the proposed withdrawal agreement that were not acceptable to a large majority in the commons. i think that that's the best

thing to do. some of us have been setting out ways in which she could change her approach to try to get what's known as the back stop for the irish border changed in a way that could, for example, drop in or add another effectively trade facilitation protocol that would give those communities in ireland the confidence that they want. but while actually maintaining the leaving of the e.u. so that the u.k. then becomes a separate jurisdiction in its entirety to the e.u. anna: do you expect teresa may to try to time limit the back stop? because we've heard from the irish deputy prime minister just in the last half hour or so that the back stop can't be time limited. the brexit withdrawal deal is not up for renegotiation. what changes specifically then can she look for on the back

stop? >> i would agree that the e.u. have been pretty firm up to this point of saying that a time limit's not acceptable. that a unilateral exit clause ouldn't be acceptable. what we've proposed is effectively an addendum to the international treaty, the withdrawal agreement that would make it clear that this , wernative way of providing eliminate the absurdity of having to charge staff i haves on each other. these are things we have set out in detail of our proposal. that could be a permanent

arrangement that i would hope at the end of the day everybody could be happy with. anna: some in the markets, i'm talking about currency traders and others, made the assumption last week that the rejection of the deal meant that brexit would be softer, it might come later, or it may never happen. do you think they are right or wrong to make those assumptions? >> i used to work in financial markets so i completely understand how they work. the thing i would say is that i think the democratic decision of the british people will in the end be respected. so i think that we will leave the european union. i don't think that some of the games being played to have a second referendum, etc., are going to succeed. i have always said that we need to be prepared for leaving without a withdrawal agreement. but that we should be working at the same time to make an agreement either by way of

amendment or adding to the withdrawal agreement or failing that have a stand-still free trade agreement that, again, eliminates the absurdity of tariffs. these are the -- at the end of the day, businesses looking for certainty and i can see a great merit in getting this done now rather than prolonging it all for another two or three years or, god forbid, people try to reverse it and then us arguing for this issue for five to 10 years. that's the uncertainty businesses don't want. most business it's just want to get on with it -- businesses just want to get on with it so they know what to do. anna: marcus fysh joining from us westminster. a quick word from brussels. vincent juvyns. after last week did you start to think brexit was going to be softer or maybe even later?

did you chime with that view? did you make that conclusion? >> yeah, definitely. to echo your previous speaker, it was a read of last week's vote. there's a bigger majority in favor of a soft brexit than a hard brexit. when we look at the distribution of the vote. i get the -- guess the minority was wishing for a harder brexit. so to us, at least there's still a lot of uncertainty. we agree with the fact that this uncertainty has already lasted for too long. we need to bring clarity for financial markets and for the economy, more importantly, because the damage already huge on both sides. i guess behind this weakening momentum we see in europe, brexit is obviously one of the explanatory factors. we've seen pretty much the same in the u.k. we have the impression based on the outcome of last week's vote that at least, let's say the worst case scenario, which would be a brexit without a deal or a

hard brexit, as we call it, is probably the least probably option at this stage. which is the only element we are sure of at this stage. anna: thank you very much. this is bloomberg. ♪ this is bloomberg. ♪

>> you're watching "bloomberg markets." i'm guy johnson in london. i'm joined now by terra firma foubdser -- founder to give us his take on a range of issues for the world economy right now. we'll talk about his business as well. nice to see you. thank you very much for coming to see us. within the last few minutes we've seen the i.m.f. coming out and cutting its global economic outlook for 2019. does it feel that the global economy feel late-cycle to you right now? >> i think it's up to

politicians. the reality is the issues we've got around the world are all political. if the politicians can get together and help the world economy rather than hindering it, i think the cycle could go on for some time. but the reality is that they're going the opposite way. my first boss always said, over time eventually the politicians will f it up. and at the moment they're definitely doing that. >> how bad is it? >> it depends where you are. for the u.k. it's almost impossible to rationally invest in the u.k. at the moment. unless you're really looking at distress. because there's matters of down side. which is unquantity final. you don't know -- unquantifyable. you don't know. the contrast is limited. italy, which in some ways has been a basket case for years, has this huge economy, which no one can measure. and the italians, there you have massive upside.

so i'm in a place where i'd rather go to italy than the u.k. which is something i would not have said in the last 50 years. >> what do you make of what is happening on the continent at the moment? you have germany potentially getting close to a technical recession. you've invested in germany before in the past. france is slowing down rapidly. the italian economy you've already talked about, it's teetering on the edge of a recession. spain is slowing down quickly. are you surprised by the speed what have is happening? >> not particularly. that k people always feel the politics is not relevant when you're in business and it's not relevant until it's very relevant. at the moment it's extraordinarily relevant. you want to have confidence. if i don't have confidence, i know the average person on the street doesn't have confidence because i'm a risk taker by nature. people are just scared. they don't know what's going to happen. we talk about the french germans getting together against maybe the italian poles.

that's a bizarre type of conversation. meanwhile britain is saying, we're going to go all by ourselves. where does that leave the irish? you go through europe. besides the astronautics, everywhere else has got real issues to face. >> where are you seeing opportunities? you talked about italy. looking at the economic scene that you see in front of you, where would you be prepared to invest right now considering the political chaos that we face? >> we've just done an investment in finland. we feel comfortable about that. we are seeing some investments with possibilities in germany. but what we're really doing is looking for businesses which are either very local or almost the opposite. have a sort of global position. but which aren't easy to understand. and which we hopefully can buy at a reasonable price. the other issue that prices are plain vanilla. prices are very, very high at the moment. that's dragging even businesses which are not plain vanilla up.

you have to go for the extremely quirky to find something which is at a reasonable value level. >> you're doing this now on a company deal by deal basis. there was talk you were going to raise a megafund, a kind of $3.5 billion fund. are you switching tact now? >> yes. i think to a large extent, when i look at my history as an investor almost over 40 years, there's a lot of volatility in what i do. every deal i want to hit the ball out of the park. overall the performance is really good. but the last fund was an absolute disaster. and yet since then the deals we've done have been quite extraordinarily -- extraordinary. so probably from my point of view it makes sense to just focus on individual deals. we put up 10% of each deal. it really matters to me what each dole does. i get really excited -- each deal does. i get really excited about each deal. but being an institutional fund manager with hundreds of investors probably isn't the thing that gets me up in the morning. >> as you say, having a smaller

pool of investors, does that make each fund easier to deal with, manage, raise, the complexities around that presumably are easier. >> it's much easier. you are focusing on the business as opposed to focusing on your investors. i'm a business person. i'm not an asset manager. >> to come back to the original question of fundraising, are you actively not -- you've given up on the idea of a big fund now? you are now going down this case by case, deal by deal, company by company strategy route? >> that's what i'm focusing on 100%, yes. >> in terms of the funding environment at the moment, how would you describe it? >> i think for a firm out there which can show consistency, it's extremely strong. you have the slightly absurdity that if you can prove that you can produce roughly 8% from fund to fund to fund, you can raise almost as much money as you want.

whereas if you produce 15% on average but your volatility is you lose money on two funds and make money on six funds, you'll find it almost impossible. it's not the average returns that people are interested in. it's getting rid of the volatility. private equity, which was a very entrepreneurial business, has become a very institutionalized business. one of the interesting things is you see funds start out, they have extraordinarily good returns, but then their next fund is anything but. because they're suddenly focusing on their investors and trying to be consistent rather than focusing on how i can make as much money as possible. >> do you think lending standards are too loose? janet yellen talked about the concern that she has, she's a form fed chair, about what is happening in terms of the lending markets and other markets. does that worry you as well? >> it does worry me. we get outbid on some deals simply because we won't take the leverage that's available out

there. so recent deal, we offered 70% leverage. we're not willing to do that. 15%, we'll do 55%. the problem is that extra 15% is a lot more expensive. and if the markets go down, you're going to have a problem with that. >> does it feel like 2007 again yet? >> it's very close in the leverage low market. very close indeed. >> you mentioned -- [inaudible] -- a moment ago. you have been talking to a bunch of students, very few of whom seem to be interested, i understand, in pursuing that line of work. have we created an environment in which it's very difficult for people to psychologically make that step into becoming entrepreneur? >> i think so. it's interesting that when you look at the u.k., you look at the u.s., you look anywhere, look at the astronautic countries, a lot of the entrepreneurs are immigrants. they're people who have come to the country and haven't gone through the system. the system we have created

knocks entrepreneurship out of people. out of an audience of 500, top students from around the world, doing m.b.a. courses, doing doctorate, etc., there are only five who want to be entrepreneurs. interesting those five always wanted to be entrepreneurs by the time they were 16 and they haven't changed. to be an entrepreneur at school you have to really fight. very hard. >> on that note we'll leave it. guy, love to see you. guy hands, the terra firma chairman and founder. just a moment we'll have more bloomberg markets. that is coming up. this is bloomberg. ♪

>> your back with bloomberg markets could i am anna edwards. let's talk about where we are on the equity markets.

asia we are positive. taking the different sets of trade. we priced in a lot of the good news. that has to be done in asia. assets at u.k. assess -- is interesting. we will hear from theresa may for her plan b for brexit. let's have a look at that. the fiscal 100 is fairly flat. outperforming the rest of the european equity market as we wait to hear from the u.k. prime minister. the pound against the dollar also flat. let's check in on bloomberg first word news . >> the imap now predicts the economy will grow in 2019 at the weakest pace in three years. softening demand

in europe. trade tensions could make matters worse. the second summit between president trump and kim jong-un is likely to take place in vietnam. bloomberg has learned the meeting will likely be held in hanoi although other cities are considered. toward the u.s.'s ultimate goal of getting north korea to give up nuclear weapons. trade talks between the u.s. and china are falling short on a key issue. there is no progress on what the u.s. is calling decades of chinese theft. negotiations resume at the end of january in washington. a battle in greece with the name deal over macedonia. the country will change its name to north macedonia in exchange for greece dropping its opposition to it joining nato and the eu.

the prime minister faces a battle in parliament over the agreement. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. anna: let's talk about u.s. politics. u.s. government shutdown has extended into its fifth week and the fallout from the closure is widening, with a growing number of federal workers saying they cannot afford to commute to questions onaising the shutdown's on sentiments and the u.s. economy. let me ask you about the impact the shutdown is having on the u.s. economy? how deep does that impact go? >> at the moment it is hard to remainsut the situation for a longer period of time it would have a huge impact on the

economy. there are number of workers who get their salary at the end of the month. we will see lower retail spending in the u.s.. beyond that a key function -- airemployees may bring the traffic into jeopardy. the political consequences of a long-term shutdown are incalculable and we have many afflictedast year of -- trade was one of them globally. brings the u.s. economy into a kind of recession. we hope the situation does not last long. what is the content for the fed in all of that. i am looking at a chart that

shows fed fund futures. ago we are looking at a cut in interest rates, now looking at at least one hike. as we see the s&p bouncing, do we think we are back to talking about how many hikes we get from the fed? vincent: not yet. we will have between one and two rate hikes. is the message -- the gave today shutdown may further weaken economic momentum in the u.s. the momentum is less strong than it was a year ago. it is an environment where you can implement a bold monetary policy. we have seen financial conditions deteriorate somewhat

but remain favorable compared to a couple of months ago. it is a time not to be on autopilot but more data dependent for the fed. not necessarily bad news for the global economy, it would mean the dollar would peak, which would provide some relief for a lot of economies globally, especially emerging markets. the fed continue to tighten, how nervous are you about credit markets? terror firmer was saying it is -- terra firma was saying it was almost 2007 again. the guest before that was saying credit would be the area of greatest stress in 2019. what do you think of credit? i would not compare the situation to 2007.

the 2007 crisis had been .mplified by the banking crisis banks are more insulated from the credit risk than they ever were. we have seen a lot of regulations coming into force. we have seen the capital level of banking has increased substantially. we need to be rigid with leverage. we see some weakness in the market. we should not throw out the baby with the bathwater. in credit markets there are still constructive asset class. i am thinking high yields where we have seen the interest coverage ratio or the leverage have actually improved over the and theple of years setup of the end of last year re-created some of that. definitely a time for more selectivity in credit markets.

stage, thee, at this possibility of a 2008 crisis because the risks are better known than they were before. andidity will be an issue definitely something to monitor but again there are still attractive pockets, especially in the high yields. anna: thank you very much. vincent from jp asset management in brussels. coming up, the oil price steadying. more on how the global growth output good way on the market. the imap cutting its global growth forecast. this is bloomberg. ♪

anna: welcome back. this is a special edition of bloomberg markets. i'm in london. type your bloomberg business flash. >> tesla has been cleared to start delivering its electric sedan in europe. selling the model 3 in europe is a big priority for elon musk. the midsize sedan marketing europe is twice as big as in the u.s.. companyof a british will be replaced by the chief customs officer. they are facing growing customer

-- growing competition from uber. italy, regulators have turned plan -- am italians spin off of the company's most viable asset would not help. the phone network is worth $17 billion. that is your bloomberg business flash. anna: thanks very much. oil is steady near a two-month high. u.s. drilling is slowing down. bloomberg executive editor stuart wallace joins me now and still with us is vincent, with jpmorgan asset management. good afternoon. i am catching up with myself. good to have you with us. prices.d .25% on oil imf,st had a cut from the

there global growth forecast. how will that fit with those in oil markets? is there a direct drop down into the demand statistics? stewart: i would say we have numbers from china that were also negative in terms of the economic outlook. the interesting thing is the country produced more power last year than ever before. it is somewhat of a counter indicator in the sense that normal gdp growth and power generation seem to go hand-in-hand. there seems to be a decoupling. that gives us some hope for oil demand. you can have a falling gdp and oil growth goes up. it is trying to become a service economy and away from a manufacturing economy. it is not that bad. anna: do we still look at the relationship between china and oil in the same way? think it is changed

and there are so many new factors in the market. that is a u.s. story. it is quite phenomenal, the growth we are seeing their. -- the growth we are seeing there. in reaction to that number which did come down, what seems to be happening is produce is favoring wealth. it is an optimization rather than a collapse. the two are not necessarily correlated. anna: vincent, let's go to you on the subject of oil. what are your expectations for where we go from here? bnp talking about $70 a barrel. where do you see oil heading? i find little reason to see much higher oil prices into 2019. did this the imf morning, we have global growth which has peaked already.

the momentum will be less supportive. we have political pressure from the u.s. on top of that to but the oil price down. talks, they acted also. we have seen the u.s. has produced it 11 million barrels a day which is helping keep prices down. tore is a political will maintain oil prices below $70 and i would say between $50 and $60 per barrel. i expect this pressure to remain. donald trump and his administration have been clear they do not want protests in the streets of washington. in europe we have less ability to put the pressure on. my best guess is $60 per barrel

as a price for 2019, given the weaker growth momentum in the political pressure to keep oil prices low. anna: a couple of things weighing on the oil prices. one of our colleagues running an interesting piece about how opec is helping u.s. oil reach a tipping point. the role the u.s. plays in oil markets is changing. we have seen in the month here or there the u.s. being a net exporter. that is going to become the norm from 2020. stuart: it certainly feels that way. the u.s. will still be buying enormous quantities of oil. they built the refineries on the gulf coast to take the heavy crude and processed those. it is exporting the lighter stuff. is 2020, q4 or thereabouts. anna: you still need the

relationship with the middle east and that is crucial. stuart: if your opec or the opec plus group you're sitting there scratching your head because there is no right policy response. they tried to drive them out of business and that did not work so they reversed course. what you are seeing in the u.s. is the consequences of reversing course. anna: thank you both for joining us. thank you stuart and vincent from jpmorgan asset management. coming up on this special edition of "bloomberg markets" global leaders gather in switzerland amid renewed fears of decelerating global growth. imfimap cutting its -- the cutting its global growth forecast. a tightening central-bank policy. all of that simmering in the background. we will be on the slopes in divers shortly. shortly.os this is bloomberg. ♪

anna: live from london, i am anna edwards. this is "bloomberg markets." , lie harris of california seeks to make -- kamala harris of california seeks to make history. she is eyeing the white house. joining us is sahil kapur. thank you for joining us on this holiday. that is interesting because it is nice timing from kamala the announcement on martin luther king day is no accident, i am sure. sahil: it is no accident. be the harris would first african-american woman in the white house, the first indian-american. she has picked martin luther king day as a symbol of the message she seeks to carry in the nomination on the democratic side. african-american asian --

african-american voters were influential in picking hillary clinton is the nominee in 2016 and barack obama in 2008. that is the path through south carolina and the deep south that kamala harris seeks to blaze through to win the democratic nomination. anna: we have been hearing from kamala harris earlier on today, talking about her aspirations. let us take a listen. >> this is a moment in time i feel responsibility to stand up and fight for the best of who we are. that fight will always in crude -- include as one of the highest priorities, our national security. harrishe voice of kamala talking about truth, justice, freedom, equality, democracy. the sound like words that many on the democratic ticket will want to put the main behind.

what sets her apart? --il: the message security the message she is running behind is social justice. she is very fluent in issues of criminal justice. immigration reform issues. she is trying to carve out a path on issues like lgbt rights and gender equality. things that have been decried by conservatives as identity politics. she rejects that entirely. she says these are issues that are important to marginalized communities. that as based on her own background. anna: what is going to be her weakness? where is she going to be less experienced than those with more history in washington? sahil: economics. she has a thin trail on economic issues and economic populist issue like raising the minimum

wage and expanding the health care system into a single-payer system. these are issues very important to many democratic voters. there are other candidates like elizabeth warren who is also a senator who set up an exploratory committee and is probably running for president. bernie sanders was very effective on these economic issues. that is going to be kamala harris is biggest weakness. she needs to convince voters in understands those issues and she is willing to go to the mat or them. anna: thank you ray much for your time today. sahil kapur joining us on kamala harris seeking eight 2020 presidential bid. we also learned about the imf global growth assessment. the economic forum meeting in dallas, switzerland begins tomorrow -- in davos, switzerland begins tomorrow. absent from the forum is

u.s. president trump and u.k. prime minister theresa may and french president emmanuel macron. joining us from davos is the bloomberg correspondent for southeast asia. you will be tracking many of the ceos and world leaders in attendance. one of the first topics of conversation will be the strength or weakness in global davos, having heard in from the imf. >> the global economy will be front and center. it is gloomy and that is a reflection of the mood in davos. global leaders were talking about all the cylinders firing at the same time. it is not the same this time around. we are talking about the world bank downgrading global projections. we also have tensions with u.s. ,nd china, the brexit situation and zimbabwe, where fuel has

been raised 200%, forcing transit to go back. it does look like this -- lots ofmeeting challenges for the global economy as a whole. the theme is globalization 4.0. it feels strange giving the rising anti-globalization we've been seeing in the last 12 months. schwab, heo chuck thinks perhaps globalization has peaked. countries will continue to work together to overcome the challenges we have seen. we talk about the easing of growth we have seen across the world. we are talking about the rise of populism. all of these issues can only be involved in governments and corporate chiefs work together. industry 4.0 is certainly one of the topics of

conversation -- how we put together a global infrastructure that works together. southeast asia, what will the themes be you're looking for? i guess china and trade policy will be crucial. haslinda: southeast asian nations have been hit by the slowdown in china. countries are export dependent economies so the slowdown in china has a great impact. the question is china is slowing but is china slowing more than we think? i will be speaking later with the finance minister of singapore to see how a country like singapore, a trading economy will be impacted by the slowdown in china. singapore in particular is between a rock and a hard place.

it is both a trading partner to china and to the u.s.. great implications for this very small nation. anna: thank you are much for your thoughts this afternoon. joining us from davos. she will be speaking to the singapore finance minister. you can stay tuned for that interview later today on bloomberg television. hour, thein the next bank had of strategy will be joining us. we are a half-hour away from hearing from theresa may about her plans. how similar to plan a will it be? this is bloomberg. ♪

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guy: 9:00 in new york, 2:00 in london. welcome to "bloomberg markets." u.s. markets are closed for martin luther king day. european stocks seeing light volume. a reasonably negative session, not down by much. with a lack of volume i am not sure today counts. a lot of noise. asian sessions pretty good. chinese data showing signs of stabilizing. this is where we step. the cac is trading at 4856. 11,000.at 11,000 is important for the dax. could be positive for the dax if that holds. , 6972, just shy of 70,000 -- of 7000. the blue line is the average over the last 30 days.