>> shutdown sequel the president reopens but trump ready to close it again if fund the wall. three sanctions on companies. moscow.ive in brexit in focus. to -- wants set challenge set to theresa may. welcome to surveillance surveillance. london.ncine lacqua in

we are seeing markets a little on the down side. a lot on the big week of monetary policy and oil you can see american $52.81, yen one of the litmus tests with risk and chinese markets bolstered a little bit by the for freeing up $37 billion lending. coming up on "bloomberg we hear from oil and middle east. to the t let's get bloomberg in new york city. >> after the shutdown the the "wall street journal" he doubts a deal can be next lapse of the tphebgs

funding. white house chief of staff cyst trump is prepared to again if they don't reach an agreement. new poll shows a sizable majority of americans think the u.s. heading in the wrong 28% on the right track the lowest during term.ent trump's it was taken before the end of t the shutdown. howardstarbucks chairman schultz saying he is seriously considering running for 2020.dent in >> not only the fact this besident is not qualified to the president, but the fact that consistently re not doing what is necessary on ehalf of the american people and aren gauged every day -- are

revenge politics. m-- theresa may no deal.rule out a parliament is preparing to vote on amendments to her brexit bill this week. delayack benchers want to the split. u.s., lia has joined the israel and several latin merican countries recognizing venezue venezuela's interim president. this as the e.u. toughened its authorize nst their pledging eader, those to recognize the new president. egypt's planned nternational band sale it -- bond sale hiring citi, jpmorgan,

to advise on dollar it tries to meet target.et deficit this is bloomberg. back to you in london. francine: the u.s. treasury says it is lifting sanctions on three companies tied to a russian illionaire although on his properties they will remain. congressional democrats tried to lock it questioning the motives. joining us is our russia editor from moscow. you made your trip back. what is lined it. >> treasury planned to lift the sanctions on the companies. good for the markets. had been roiled

them. after they lifted them prices and it is bit today good for the company. stock prices up. he remains under sanctions. can't t get dividends, the and can't vote all stake he still holds. francine: thank you, torey. joining us now is our head of multi- multi-asset royal asset management and we are looking at under management at pounds as september 30. thank you for joining us. with the sanctions lifted there re implications some attractiveness in russia or time to go back in or things can slip

quickly? >> we look at emerging markets because of ruggled the slowdown in china and riding .s. interest rates and at the moment it was like the pendulum -- winging become in their back in their favor. t is a reasonable team for emerging markets to do better. francine: is there anything tied to russia that you like? -- 'm a little bit commodities are a two-way but is picking up and the dollar can sort of stabilize fed isn't hiking rates there's a room outlook for commodities. favorite what is your emerging market. >> i'm looking for economies exposure to commodities but also dollar the resource g at ased commodity markets that

would be south africa, russia, a ig basket of industrial based emerging markets. francine: thanks so much. up next shutdown take two as the government opens. this is bloomberg. ♪

francine: economics, finance, politics. this is "bloomberg surveillance." tkpwhrae let's get to the bloomberg flash.ss >> revised package to rescue the fallen short. sources say it failed to win ver european antitrust

regulators. it lacked the stps for the european european competition assets.oner to grant nissan under investigation by the s.e.c. looking at whether it accurately disclosed executive ay in the u.s. and maintained adequate control to prevent improper payment. received and t inquiry and is cooperating. energy giant and eni $5.8omv agreed to pay about staken for a combined 35% in a unit at $19.3 billion. opportunity nique grow our capacity and having wantflexibility because we

of new licenses in abu dhabi. they plan to eliminate the emissions by 2030 saying making similar efforts customers. >> by 2030 we are going it 50% the car pw bonn emissions. with the gain technology that is coming with t progress it is doable and in line with our customers so we we willit ourselves but help or customers. >> that is the bloomberg flash.s francine: the u.s. government will reopen fully later for although president trump warns he would be happy to he e agencies again if doesn't get the funding for the border wall.

he is prepared to close if he and leaders are not able to reach an agreement. what does the threat mean for u.s. assets. this.ve more on thank you both for joining us. view the shutdown? > it is one of the three geopolitical factors that heads to the christmas crush with the shutting down and percent% tariff on goods and brexit. came together in quick succession in december. worked on and markets are moving up but i tempted to not take the money off the table. rancine: does that help with earnings? >> i think that you would

truggle to attribute were the ngs weakness to government shutdown. it is more sentiment. aluations were the presume player drag and we have recovery he last two and a half earthquak weeks say think it struggles to it was responsible but it is ore global issues that are dragging down. the key is how much can we see confidence and sentiment. it is a soft measure as opposed to hard. see recovery in sentiments and we can look forward to a earnings later in 2019 and early 2020. earnings urth quarter it is relatively meaningless. nick mulvaney says he doesn't rule out a does that make it hard for the companies to have

optimism? the sentiment and one of many issues trevor suggested on confidence and planning and hamstrung the environment. in three weeks we will know if president will declare a national emergency and funds the which i think is a possibility. experienced a serious amounts of political damage from the shutdown and to do that in three weeks. so we might experience a for what the ome wall looks like in three weeks. fra with brexit and trade issues is a drag on and holding companies back from planning. so the faster we resolve that better. francine: trevor, this is our and we are the day asking which asset is set to

most from the end of the shutdown. impact on fed policy? >> i think it does indirectly. enough softness for the fed to be on hold. seen a recession. we will see good retail. not seen numbers for a while so we will find the new schedule. we will find wages are growing strongly and gas prices tight and therket consumer will be ok. stimulus. added from my point of view there is a risk on ton the first half of -- tone that comes back into play. hike it year?d >> i believe they do but you to to believe they won't get it positive and economic recovery to a certain extent

hike.et the fed to i'm a little worried about next year. francine: do you think they will hike? >> i do, but i don't think it will be until later. month's meeting contained the risk and that is the equity market is on the ably focused biological sheets -- balance rumors nd there were suggesting the the market may be nticipating the fed suggesting an end to balance sheet contraction. december en that in where the equity market responded strongly to chairman was on uggesting it autopilot and earlier this month with former chair yellin and bernanke suggesting not autopilot. so there is a hyperfocus on the sleet and assumption they -- sheet but the balance the key riskenting in there meeting that you want to pay attention to.

you think here did the line for the fed is in terms of economic data. trade war with china? could brexit -- if there was unfolding that was no deal? deal with fed policy is they keep hiking rates until they have done too much. rearview mirror and they can't see the impact of the six or 12 months. so i'm getting more nervous on mainly because the housing data has been soft particularly survey data. that is usually a sign the fed funds are getting to where know and that is usually an indicator. fed is on hold for the time being but if the to be better out in december they will keep raising rates and the housing is in pain then the danger is you get a sharper

next year. francine: we will make a new chart and this is looking at the and merrill ca lynch market risk indicator. of future gains market volatility significantly down. >> consistent with what we have the hrlast three weeks as v.i.x. has s risen lod rated and part -- moderated. part of it is the assumption the ed isn't going to be as tight going into it year and provide support to valuation. anticipated is earnings trough. in contrast to 2018 where the the market is om earnings with peak and we had to contend with that, the trough is for 2019. so, that would suggest that you have an environment where somewhat remains suppressed if you are going to get confidence, will trough in recover inuarter and 2020. it is a big question mark and it the earnings at

season we are going through in the united states will tell us, will we see a trough. see better performance going fa 2019 from the -- going in 2019. question mark but the fed is another part of t. it the een a big part of rally. francine: what about the asset will be more volatile. coming up deutschebank set to further investments from qatar. s it enough to turn around germany's problem bank? ♪

francine: this is "bloomberg surveillance." i'm francine lacqua. said to get commitment from qatar looking to finances after they fell almost 50% the past year. likely to be is based through the qatar investment authority. we will bring in steve aarons frankfurt. why is qatar investing now? >> i think the share price is right? low, and deutschebank has two

or ting shareholders investment vehicles and qatar in davos to bloomberg tv that they are trying to invest invest in the german economy so this may be seen as invest in a y to very important element of the german economy. francine: how big of a deal is this for deutschebank? >> it certainly is helpful. hare prices went up today and deutschebank has seen a long is believed that it is on the right track and maybe hope it could turn it around and deutschebank needs ight now if they were to do a merger and we have been covering that speculation they want to capitalerger additional

soingprobably be required this have investment is helpful. francine: what is in it for a chunk come in and get in deutschebank right now? one person said it is probably the qatar point of view much a political as were as financial. they have done badly on the investment. shares at a much toher price giving them more help them recover losses but it comes to if qatar help of deutschebank it is something dear to the german government. they are concerned about deutschebank and for qatar to money saying we are ready to help when you need us political y big gesture and will probably be

seen positively by the berlin.nt in .rancine: thank you season power the venezuela rab as more back the new president. we will talk about what is next crisis. country in kicking off a busy week with stocks in the red. see the 600 down a half percent. they are focusing on a couple of monetary policy and global trade implications. oil below $53 a barrel. ♪ #

francine: economics, finance, politics. this is "bloomberg surveillance." let's turn to the power grab in venezuela. australia has joined the u.s.,

israel and several latin american countries in recognizing gaido as the interim president. this comes as the eu tightens its stance against maduro. for more on the latest from venezuela, let's bring in justin, bloomberg's managing editor for emerging markets. we have seen popular protests come and go in venezuela, but this is different. -- why istum so momentum so key? the first is that the u.s. has very much but it's support behind this opposition figure. that has been something that has ed byrepeated or echo other countries in europe,

notably, and in latin america as this is something of a break with the past. the second factor is that this is the first time in a long time that the opposition in venezuela has been able to unite to some extent behind a single man, somebody who brings all the forces together and is able to congeal the popular sentiment in opposition to nicolas maduro. at thee: if you look control of the military, does whoever controls the military win this? justin: that would be pretty much the way of things. you can say what you like about control of the justice system and of the state assets, but at the end of the day right now, it is a question of who controls the military, and that is what we are seeking with both of the tryingloggerheads here

to whip up support. with maduro, culling of the military to stay loyal and gaido trying to make efforts to bring them on his side remains to be seen how successful he is in the, but he has been distributing leaflets to the military. some seem to have come over to his side. that very much seems to be the critical factor. that will be the factor that takes it one way or another. francine: thank you so much. let's get straight to the bloomberg first word news. na: the u.s. lifted sanctions on three companies tied to the russian billionaire. the treasury department is .emoving restrictions congressional democrats tried to block the move, they questioned the administration's motives.

europe's great biggest nations are set to introduce a funding vehicle to help their companies trade with iran despite u.s. sanctions. the announcement from the u.k., france and germany could come as soon as today. to thee is seen as key eu's efforts. the u.s. pulling out of the deal in may. it has since reimposed sanctions. federal agencies in the u.s. reopened this morning after president trump signed a stopgap funding measure to end the 35 day partial government shutdown. the president told the wall street journal he doubts a deal can be struck before the next lapse in funding in three weeks. trump isaney saying prepared to close the government again if he and congressional leaders aren't able to reach an agreement. a new poll shows a sizable majority of americans think the u.s. is heading in the wrong

direction. only 28% think the country is on the right track. percentage inwest president trump's term. was taken before the end of the 35 day shutdown. the former starbucks chairman telling cbs he is seriously considering running for president in 2020. not only the fact that this president is not qualified to be the president, but the fact that both parties are consistently not doing what is necessary on behalf of the american people and are engaged every day in revenge politics. viviana: global news, 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. francine: thank you so much. the chinese delegation will arrive in washington later for trade talks. top economic aid

will be robert lighthizer and steve mnuchin on wednesday and thursday. if a deal isn't reached by march 1, the u.s. could raise its import tariffs on chinese goods to 25% from 10%. fresh data out of china shows profits for industrial companies sell for a second straight month. trevor and gina . there is like a million angles to this. what do i look for? gina: i think you focus on a number of things. i am more nervous about the peripheral impacts on europe. there is a triangle of trade. when you look at u.s. stocks, we have come a long way in the pricing weakness. direct exposure to china is very clearly concentrated, most profoundly in the tech sector.

the stocks that have the most exposure are trading at a greater than 15% average. chinese weakness impacts europe more than it does the u.s. we are not pricing in the slowdown in europe. for europe areis below those of china. business sentiment is worse than it is in china, and yet stocks in the u.s. that are most exposed to europe are still trading at a positive premium to their long-term average. i think you look for that triangle of trade to deteriorate further if we can't get some resolution. in terms of the numbers, frankly, if we just get through and solidify the numbers, even if we get a 25% tariff on products imported from china, companies can survive this. companies are able to pass on the gross margin.

the question is on operating margins. companies are spending too much revenue.to the probably now is really about sentiment. the uncertainty, the unknown is much worse than the known. even if we get a 25% tariffs, we can absorb that and move on. companies can plan for that, but they cannot plan in an environment where they don't know. francine: how quickly can sentiment turn around? trevor: i don't think we're going to get a deal. if we think about it, the 25% tariff is of low and if the u.s. is trying to get the chinese government to convince its companies to have a different attitude, it is not something that will happen overnight. i think america cannot afford to follow through with the 25% hit

because then they have actually shot the bullet. they have to keep this thing hanging over china until the intellectual property issue is addressed. francine: doesn't the president want a deal? trevor: it does, but it might be like nafta. there might be some sort of cosmetic success. he will declare every defeat of the victory. he will continue to get this thing taking over the market, but the really critical thing is china stimulus. in 2016, china was very weak. suddenly the pmi popped up in europe. started and i think you'll see a stronger 2019 that people are expecting to read francine: does the president really want higher stock markets? does it make it more likely that we will see an s&p rise this year? gina: i think you

certainly likes higher -- i think he certainly likes higher stock markets. luckily for him, this year we are off to a roaring start. i think he probably perceives this as a peripheral issue that is not that important to stocks until we get another failure. if we get another failure to find some sort of resolution, stocks and multiples probably do contract again, proving that trade is still is a case of importance for the equity market. the recovery so far this year is going to provide a little more cover for us to continue these trade discussions and continue to show weakness on any sort of resolution. francine: when you are saying that europe could be the one event that will hurt the most in this triangular trade relationship, is it sectors like automobiles in germany or somewhere else? gina: within the u.s. market, it is more defensive components. this is an area of great rest

because this is an area investors have fled, have shifted into and attempt to be quite defensive in 2018, therefore, it is an area of risk in 2019. areae same time, it is an of tremendous risk from an earnings perspective. in the u.s. market, it is more of. a defensive market globally, it is important for germany to show some type of stabilization. all of these things are weighing on the german exposure within the stoxx 600, which is clearly creating weakness for european assets in general. francine: thank you both for joining us. we will talk of them up about

europe and brexit next. stay with "bloomberg surveillance." plenty coming up, including brexit's next challenge. tomorrow, bp parliament will vote on an amendment to restrict theresa may's power. next.s coming up this is bloomberg. ♪

francine: this is "bloomberg surveillance." theresa may risks losing control of brexit and a series of votes in parliament this week. these amendments

could force the prime minister to suspend brexit or send the deal back to brussels to renegotiate. sun has reported theresa may has reportedly told her cabinet that she will not leave without a deal. trevor.th us, a number of things could happen this week, but what is her best case scenario right now? trevor: it is quite to be very difficult to see. the currency markets are frozen. sterling euro is at the 110-112 level. you could see a sleep with no deal and the pound go down. you could see brexit spending reversed after another referendum. this week is groundhog day.here we are again talking about brexit and meaningful votes. francine: does it move any markets? let me bring you over to my chart which is the guilt curve flattening. we did have a little bit of movement on eurosterling.

what does it impact? trevor: you have two key amendments. backstop.limit the if that were to pass, it would go head-to-head with the eu 27. the island is very resolute on the. -- that. if anything, the pound to go down on the. it's a cooper amendment passes, private has more control, maybe we have mps decide on going to the referendum versus remain. you can imagine that being quite sterling positive. they might both pass. francine: what are the chances of a second referendum, what are the chances of an extension? trevor: i think an extension is

quite likely because time is running out. if you don't have a no of brexit, you have to have a deal brexit. if you have a deal brexit, you have to delay article 50. that maybe referendum and i think that what happened in the longer term. whatine: first of all, question would you ask and how would it be taken by citizens of the u.k.? trevor: think the u.k. at the moment is highly divided. this have to be sorted out one way or another. my feeling is you may find people out of frustration deciding it has to be referendum that unblocks parliament. that is the best outcome. then you have another campaign runoff that will be another key development. make the mistake, if the withdrawal deal passes for some reason, it is not the end of uncertainty because there is still no sound all deal -- final deal worked out.

uncertainty everywhere you look at the moment. the referendum might be a path to some form of certainty. francine: thank you so much. withg up, we will talk oil the chief executive. that is coming up next. this is bloomberg. ♪

francine: economics, finance, politics. this is "bloomberg surveillance." we spoke exclusively to the chief executive in abu dhabi. >> this refinery increase capacity that is very important for us to balance our big exposure in the downstream, we grew a lot in the upstream, a lot of discovery, a lot of development. clearly with this volatile oil

price, we needed to counterbalance the upstream with a very strong downstream. we have a very strong downstream in italy, but that is not enough, so we have to diversify our downstream. best unique opportunity to grow our downstream capacity creating flexibility, more efficiency because we won a lot of new in developing assets and inspiration are set to not be dobby. in abuiration assets dhabi. s: the impact on your margins and break even. : this deal is important for us to increase our margins.

in the first phase, we were doing about 0.4 dollar per barrel. when we reached 1.1 million barrels per day, i think our toak even average will go $1.4 per barrel, a daily low breakeven. the increase in our capacity will be in the first phase about 35%. francine: that was our exclusive interview with the eni chief executive. let's keep the conversation on oil. trevor, what kind of price of oil does the world economy need? trevor: low. i think it is worth bearing in mind how crucial the oil price is. any reduction in the oil price is like a reduction in interest rates for global consumers. ,f you think back to 2015/2016

we had a big slump in oil price that year. u.s. consumer spending group absolutely surged the following year. you might be surprised how strong the u.s. consumer is in 2019 because the oil price has fallen so dramatically. it is the rate of change that matters to the consumer more than the actual level. francine: what is the oil price when it falls to magically happe -- falls dramatically? trevor: i think it is a marginal demand affecting things at the moment. bear market very quickly from october onwards. now, we are seeing a fairly constructive outlook for oil. the u.s. consumer is still quite

robust this year. you would expect oil demand to remain relatively firm. i think as long as oil price moves up gradually, it is still the next stimulus to the world economy. that probably means rates go up later in the year. francine: does this help with the european economy? can the oil price help? tovor: lower oil price helps stimulate the global consumer. a china recovery would be incredibly positive for europe. europe needs something like that because if they go into a recession, i think the politics, which are already quite toxic will get quite extreme. we are underweight in equities at the moment. we are overweight japan in emerging markets. i'm surprised about japan because we also heard from shinzo abe that inflation is

just not there after everything they have done. trevor: the interested to us is that it is a globally exposed stock market. it is a stock market that tends to do well when the dollar is strong. theging markets -- when dollar is weak. ina thed from g fundamentals of the dollar look pretty weak. as a result, we are not positioning ourselves one way or the other on the dollar. wencine: political question, have the european parliamentary election, if they turn populist, does it impact european growth? trevor: i think if there were lots of protests, that could have impact on european growth. i think the bigger question about populism is whether we get more europe or less europe as a result of it. if we get less europe and less cohesion between euro states,

then in the next downturn, the necessary bailouts will be resisted. i think that would be very destructive. francine: thank you so much. we continue in the next hour. tom keene joins me out of new york. we will be speaking to the global political analyst at citigroup. we are seeing a little bit of a downside when it comes to european markets, stocks kicking off a busy week in the red, potentially crucial week for global trade, but also monetary policy as it gets underway. this is bloomberg. ♪

francine: shutdown, the sequel.

opens, but the president is threatening to close it again if there is no funding for the border wall. deutsche bank is said to have secured a commitment for additional investments from stakeholders. shares tick higher. good morning, everyone. this is "bloomberg surveillance." tom and francine back in the warmth of our respective studios. we have a big week for markets as they look to global trade. themesny of the same going into the key fed meeting. this was a meeting that was going to be boring. this is no longer going to be boring. francine: let's get straight to the bloomberg first word news. viviana: the trump administration lifted sanctions against three companies tied to a russian oligarch.

he is an ally of vladimir putin. congressional democrats try to block the action. they cited concerns about the administration's motives at the time when there is an investigation into russian influence in the election. roger stone doesn't roll out cooperating with robert mueller investigation into russian meddling. determine,have to after my attorneys have some discussion, if there is wrongdoing by other people in the campaign that i know about, which i know of none, but if there is, i would certainly testify honestly. i would also testify honestly about any other matter, including any communications with the president. speakingstone denied to president trump about russia or a presidential pardon. the starbucks the ceo says he is syriza thinking about running for president in 2020 as --

seriously thinking about running for president in 2020 as an independent. theresa may could lose control of brexit in a series of votes in parliament this week. delta could force her to suspend the entire divorce or go back to the european union to renegotiate the deal. party arecs in her demanding she seek a revision to the irish border plan. global news, 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. tom: thank you so much. minute, to bitcoin in a which breaks down this morning. futures at -12. we are not through to record flatness, but this bears watching. they euro back up a little bit. oil with a nice move back.

the vix, 18.6. look where the dow is. tony will join us in the next hour. sterling, we will get to in a moment. bitcoin, after eight days in a row, and incredibly elegant chart breaks down this morning. it is not new record weakness, but i am on the bitcoin watch. technically, it's ugly. francine: this is what i'm looking at. european stocks down. i think they are basically looking at a crucial week for global trade, but also for monetary policies. the yen edging higher. i specifically wanted to show yuan.u o -- tom: back with the charts. this is the equity marketing.

a really important conversation coming up in the next hour. this is a correction, 10% down in january. this is a bear market, we never got there. down we go through the correction to an actual bear market on the dow jones industrial average. i will let you pick where you, everybody,rancine, all of bloomberg went to cash. look at this bounce. wow. francine: there you go. i don't think anyone in europe went to cash, but it is a good and beautiful thing you are showing it on tv. this has to do with brexit. there are various amendments they will vote on. i have person after person onset saying it looks a little bit like groundhog day when you look at the yield curve narrowing a little bit.

it is a crucial week for brexit and the prime minister appears to be holding her ground on plan.ents to her divorce she faces a series of votes on various possible alternatives to the deal currently on the table. speaker to parliament's to pick up which amendments to vote on. david, what are they actually going to vote on? amendmentsave two and that basically cancel each other out or make no sense if they both get voted for. david: it seems to complicate the process. we are not actually going to know which amendments are going to be selected until tomorrow. that is up to the speaker. he has a bit of a reputation of not particularly helping the government in this process. some of them are doubling up and repeating each other or cutting themselves out. broadly, we expect there to be

twice is made on either extending article 50 and ruling out no deal or instructing this is me to go to brussels -- mrs. may to go to brussels and demand a change to the irish backstop. the theory goes that that would be enough to get her to change the europeans' mind. we have heard repeatedly that they are not going to open the withdrawal agreement. francine: let's say they do reopen the withdrawal agreement. can they actually do anything on the backstop? the most elegant solution would be maybe a time limit, but the irish would never go for it. david: that is the big question. can weer suggestion is, have some sort of mechanism for brexit to exit it by themselves. one of the sticking points has been there is no unilateral exit. is out today in

the telegraph saying, if we can do is put in some of these safeguards and allow britain to exit unilaterally, everyone will it.y behind what is the change needed in order to bring all of the conservative party along with mrs. may? it has to be pretty much all of them and the dup in order for them to get this vote through. tom: as one example of the backstop, and what is in this time to keep up, the comments of the irish prime minister were absolutely extraordinary. i thank our team for distributing that so well. everybody in the u k and republic of ireland picked up on the. is that the touch point here? with all of the hot air that emma ross thomas has to cover every day, is ireland the may hasuch point that

to deal with? change -- emotions are running really high. the foreign, minister speaking on television over the weekend. you can see the irritation and frustration because the irish say it is britain's problem to solve, but the countries most affected by this is going to be ireland. there have to be a solution that is acceptable to both sides. both the eu and britain are tying themselves up in knots over this question. really, there has to be some sort of shifting of grounds on both sides of this if there's going to be any hope of this deal getting through parliament. the washington post, there was a big feature today on the speaker. it is hilarious some of the stuff he said with brexit and other stuff. in the permanent fixture next number of days, can he

actually shift the debate? david: he absolutely can. he is holding an important role in this debate. he is controlling the agenda of what gets voted on. he will decide on the amendments that get voted on tomorrow. fixture. a permanent he is coming to the end of his time as speaker and there will be another election. just for now, he is certainly in place. he is a real thorn in the side of the government. he would argue he is just sticking up for parliament. francine: what do these moves actually move? guilt, pound, eurosterling or dollar sterling? ben: i think it is really the pound that has been the beneficiary over the last week or so. i think you should continue to

expect to see that come through. francine: is it really a resolution? if this is the withdrawal agreement, then we negotiate the relationship. ben: this is really just us trying to leave. at this stage, i think when this was originally set out, the thing that people thought was going to be difficult was how much money? it is been the one issue everyone thought was not an issue that has turned out to be the big problem. it is just a small thing, but it is pretty difficult to fix because you can't come up with a solution that keeps everybody happy. francine: who else are we looking at? there was an interesting report from mrs. may that she

was not going to push her cabinet to no deal. philip hammond has said in that theirs declining to roll out resigning. the prime minister have to keep of people on board. she has two warring factions of for government. it has been an almost impossible task. francine: armie going to be wiser after the vote tomorrow or could we be back to square one? david: i think we probably will know a little bit more.up to now, we have known the president doesn't want . tomorrow, we might get more of an indication of what they do. none of these votes are technically going to be legally binding on the government. we will presumably get a sense of, is there a majority for

ruling out no deal. crucially, i think that the conservative party rally behind her deal? i think that is the key thing to look forward to tomorrow night. francine: thank you so much. up, the ing global head of debt and rate strategy joins us. we will talk about the fed. this is bloomberg. ♪

viviana: baker hughes plans to

eliminate its carbon emissions by the year 2050. the ceo speaking with bloomberg. toby 2030, we are going reduce by 50% the carbon emissions. as we go forward, a net zero i-20. 50 we think with this technology -- net zero by 2050. we think with the technology coming, this is very doable. two european oil companies are taking a 35% stake in abu dhabi's state-run oil firm. they will pay about $5.8 billion. uniqueound the best opportunity to grow our downstream capacity creating flexibility, more efficiency because we won a lot of new licenses.

developing asset, inspiration asset in abu dhabi. viviana: deutsche bank received new investment from qatar. two other investment vehicles from qatar also own a stake in deutsche. tom: thank you so much. markets.as at the i said earlier, it is extraordinary what we have seen, the volatility of a good market, bull market in the drop off to correction and bear market in the spectacular rebound of january. ben ritchie with us of aberdeen standard. is this for real? should i be lightening up or within the equity markets, this is give you confidence to participate the role of 2019?

-- through all of 2019? ben: i think we have seen a swing in sentiment. the end of september, markets were looking at higher markets. within three or four months, we back into the pit of a bear market and people are very worried about a global recession. i expect the reality is summer in between. fundamentals of the global sound, remain relatively but there are a number of issues out there. the chinese economy, trade deals with the u.s. and china, also hawkishness around from the fed and political issues in europe that have scared investors. i think the core of what is going on economically is ok. if we can get some of those political and economic risks away from here, i think we can get back to what is a reasonable picture. tom: the money question is a simple idea, a lot of the economics show slowing economies.

do you take a gdp analysis and bring it right over to revenue analysis and earnings analysis? absolutely. i think you are looking at what was the sensitivity be of various companies outlines. i think we have seen that in terms of market reaction. markets have moved pretty swiftly. i would say at least medium level recession into those numbers. you are looking at the more cyclical industrial names with earnings expectations down 25-30% in order to work your way back to a more normalized pe from where the prices have that. i think we are very much in wait and see mode at the moment. i think things could go either way with the global economy from here. francine: if we do get an to on trade between the u.s. and china, would it substantial

enough to overturn sentiment? ben: i think the fact that there will be, if there is an agreement, i think that is a big step towards curing the sentiment issue. i think companies are just concerned that there is a lot of instability out there. that doesn't help them when it comes to making big investment decisions. as a result, they are holding back. i think if we can get some constructive agreement, i think that would be very positive. tom: distractions of brexit in the coming shutdown as well. in our next hour, really thrilled to bring you tony dwyer. he has been phenomenal. -- wek at a needed update will get a needed update. this is bloomberg. ♪

francine: this is "bloomberg surveillance." deutsche bank is said to have secured a commitment for additional investments from qatar. isning us now from frankfurt steven arons. why would they be interested in deutsche bank? we don't exactly know the timing of this extra investment or the size of it but what is the attraction for qatar?

think qatar knows deutsche bank very well.they had been a close contact for a long time. qatar feels it is probably comfortable with the people they know their. it is quite an opportunity to -- it'se book price of lower than any other bank in the sector. it could be seen as an opportunity, and it is a the germanngle with government doing them a favor. francine: we know that deutsche bank in the german government have intensified talks. what is the german government want out of this? when did have a problem with the qatari investment authority being a big shareholder? steven: i don't think they would

have a big problem. i'm pretty sure there are contacts between the german government and qataris. i am pretty sure if they want to make an investment, then they must have good relationships with the german government. the qataris have long been investors in many blue-chip companies of germany. they want a merger? there are basically plans to prepare for a merger. i am pretty sure the qataris know about those plans. what they be in favor? it's hard to say. the know about this and the likelihood of this happening, i don't think there would be a lot of resistance. francine: thank you so much. radio,up on bloomberg grant thornton chief economist. we will ask her about the fed and dollar dynamics and earnings.

this is bloomberg. if i am looking at what your stocks are doing, they were of a bit on edge. there is monetary policy we are looking out for today. stocks kicking off a busy week and looking at some of the global trade issues. coming up, we will have plenty more on dollar and the brexit issue. we have that big vote in parliament tomorrow to decide the future of the u.k. and the eu. this is bloomberg. ♪

francine: this is bloomberg surveillance. -- tomancine from london and francine from new york and london.

adnoc's chief executive told bloomberg the move will drive efficiency across their businesses. rigorous ina very violation matrix centered around technology and the commercial motivation of those partners, we are announcing today a new 20% stake. with a both partners bring a great deal of value. they bring very sophisticated technical expertise. they bring operational expertise, helping us drive efficiency across our refining business, as well as helping us enhance value and increase our

margins. >> you are getting very close to eni. eni is a very important partner for you now. what is the draw with eni? what is the key thing with eni? eni has been able to demonstrate in a short time a truly genuine commitment to adnoc. we find them to be like-minded. they very much endorse, support and are excited about what is taking place at adnoc. there is so much in common what many and eni, other companies in the world, but they have been progressively , aggressively preksta -- pursuing opportunities. >> it is a competitive tender. is there another 5%?

is there room for another partner? 65% in adnocn refining. i would like to keep that for the time being. that does not mean that we will not be open to engage in another competitive bidding process to set down another 5% or 10%, given that the new partner will infirst like-minded technology, efficiency and help expand our market share. from the united arab emirates, the adnoc ceo. now for the "first word news" with viviana hurtado. viviana: bloomberg has obtained the defense department's annual assessment of cyber threats. pentagon'ssays the

cyber testing is handicapped by a lack of understanding. recruiting and retaining qualified people, both big issues. president trump's recent spat with south korea is putting a new strain on the two countrie'' seven decade alliance. the dispute is playing out as president trump prepares for his second summit with north korean leader kim jong-il and. more problems for nissan in the wake of the arrest of former chairman carlos ghosn. the exchange can -- the security and exchange -- the federal trade commission is investigating executive pay in the u.s. they also want to know if nissan maintained agricultural to prevent improper payments. the company says it is cooperating. in venezuela, both sides of the crisis are trying to win over the military, become -- the country's ultimate powerbrokers. industry --ering

amnesty against corruption or abuse allegations to any military member who defects. president maduro underscored the military support for him by watching a tank exercise. global news, 24 hours a day, on air and at tick toc on twitter, powered by over 2700 journalists and analysts in more than 120 countries. i am the vienna hurtado, this is bloomberg -- i am viviana hurtado, this is bloomberg. my first conversation on it as we moved to scarlet fu's coverage of it in a few days. then richie with us -- then richie with us. bond offerings last week, there seems to be a huge demand for debt out there. isn't that vote of confidence for what chairman powell is doing?

a -- therethere has has been a big change in sentiment. it is across the spectrum from .igh-yield to emerging markets the entire story is not down to the risk on. the italians originally agreement with the european .nion it is been a really positive start to the year and closer you are to the core, the more the talks have been difficult. away, it hasou are been good so far. tom: does this change the language of the fed? ignore he simply correction, bear market, ginormous recovery?

ben: i think they will try to look through it. this will give them a bit of breathing space. it gives them cover to let's see how things go from here but perhaps they previously overcooked the hawkishness. francine: what is a little bit of breathing space? it gives them the ability to be more data dependent and see how things go. we are going to be much more variable. i think it depends on whether we start to see the economy getting back on track and the markets behaving themselves. padhraic -- padhraic: there has been a lot

of discussion with the issue of slowing down the balance sheet reduction but there is also been talk about maybe reinvesting some cash into front and securities. it will only be an extreme circumstance where they -- we would probably be in agreement it is probably too lax this year but we have to get through the first half of this year. we are expecting that to determine what the fed does the second half of this year. tom: where are we on debt now in terms of issuance? drowning int issuance? padhraic: there is a lot of cash to be put to work and also typically in january there were a lot of redemptions in play -- there are a lot of redemptions

in play. it is always a very receptive month. it is risk off here but wait until january, things will change. this is a really good reason. so far, so good and i expect that to continue. it gets heavy in february and march in terms of new cash but january is great. tom: we will continue, padhraic garvey with us of ing and ben ritchie of aberdeen. give us more in spain, and today is the pushback. this is an extraordinary protest in one of the acclaimed squares image rid. these are tech -- squares in madrid. these are taxi drivers going after the technology of uber and others. it is a pushback, every company different.

the nicest solution worldwide would be a london cab. protests in madrid. this is bloomberg. ♪

francine: this is bloomberg surveillance. new yorkrancine from and london -- tom and francine from new york and london. this comes as the eu -- -- as the eu toughens its stance on the is really president maduro. maduro.uelan president

still with us, ben ritchie of aberdeen standard investment and padhraic garvey of ing. thank you for joining us. we have seen a couple protests come and go in venezuela in the past but this is different. >> we have so much coordination and pressure behind this. maduro is in a tough situation ,ere, especially with the u.s. european union and other latin american countries really trying to recognize him and force regime change. francine: if you look at the standoff, is it all about who controls the military? >> who has the support of the military and who has the control of the very few resources venezuela has. viviana, good morning.

, we had three guests back to back and the common theme was venezuela is far more damaged than businesses understand. their infrastructure is the worst in the world. is there optimism of any kind for a quick turnaround for the venezuelan economy or are is it going to be years and years of a workout? viviana: there is absolutely no chance for a quick turnaround. this is a massive reconstruction effort, almost a war-ravaged country. you have to start everything from scratch. we are talking years and years of economic mismanagement that brought one of the wealthiest nations to its knees. and whateed to see people will be hopeful and the incapableis

of implementing such changes. francine: they don't have much oil, but could they change that dynamic? venezuela needs to start producing again. is whether youn can quickly invest in this country and trying to move production. , give me aadhraic sense of what this means for investors in venezuela. i think venezuela is an example of an economy with severe idiosyncratic risk negatives. it is one of those areas that sends prices down for the rest of emerging markets and the rest of emerging markets look like they are in decent shape.

a rise in the oil price would would besitive -- positive for venezuela like many other countries who are oil exporters. veryuela, argentina, separate from the rest of the complex. tom: does venezuela have a natural ally in south america? is there someone from culture, religion, history, that they would ally with quick -- ally with? viviana: venezuela does, maduro does not. they are really trying to support them and give everything they can in order to get maduro's socialist regime out of control. once that happens, you will see way more goodwill and investment from these countries.

in total -- a notable exception is mexico which has been connected to chavez and maduro in the past. tom: there was talk in washington over the weekend, the debate of reliving some of our history on moving down to south america. military oru.s. diplomatic military mission the accepted in caracas? verynne: up until recently, that was taboo, given the history of latin america and u.s. intervention. this is changing quickly. remember that now you have friendly and more way more aligned with u.s. interests than we have seen in quite some time in latin america. francine: i will change part of the world and ask about greece.

it feels quite significant. be investors likely to receptive? ben: investors have very short memories. there is a price for everything and this will be a price at a level where investors are happy to take the risk. it does get taken down once you get beyond the ultimate price issues. francine: what does it tell us about greece? ben: it is making slow, steady recovery from complete basket case to something approaching invest ability -- investibility. there were some positive signs as well. francine: thank you all for --ning us, viviana rodriguez

benanne rodrigues, ritchie of aberdeen standard and padhraic garvey of ing global. this is bloomberg. ♪

tom: bloomberg surveillance. davos last week was extraordinary. the meetings at the world economic forum and everything was outside happy valley. that conversation driven forward. mr. mulvaney told fox news of the president's path forward. >> no one wants a government shutdown. it is not a desired end. when the president vetoes a bill put in front of them -- front of him on a spending package, that has the effect of shutting the government down. we did not go into this trying to shut the government down. tom: very good. davos of extraordinary who was not there and we picked right up on it. we look at brexit and the path forward. also the shutdown as well. it is almost on a given monday

that. posted not happen -- that davos did not happen. davos were on a break but the news did seem like it was down the mountain and who was not there. we had the venezuelan developments. chavez, the shutdown as well. as your last commentator said, that is likely to be temporary. is this enough to unstable any kind of global recovery francine and i saw two sides of davos. which is it from the citigroup view? tina: citigroup economists remain pretty constructive on the global economy and when i think about the political risks that could be unsettling, they are more likely to be unsettling fragment -- for financial

markets than disrupt the markets. francine: will could have a huge impact on the economy? -- what could have a huge impact on the economy? tina: they put out their global risk report every year, this exercise about what is likely to be impactful and they used to be always the bad risks like terrorist attacks or a pandemic. what we are seeing now, what i have been talking about is this paradigm shift in the nature of risk and it is about crisis reaction functions, as the u.s. moves away from a globalist stance and on what likelihood is there to be cooperation if we do have another crisis. francine: it is impacting sentiment as well, isn't it? tina: absolutely. francine: the shutdown is impacting chief executives putting money back into the economy.

are we really understanding the consequences of that? tina: we are just beginning to get there. in my conversation with ceos, there is a great deal of concern about a change coming from the u.s., whether it is the domestic political outlook. are we going to have another debt ceiling collision, this cycle of closing and reopening because the entire political process is held hostage, and brexit, and everything else. andmpacts hiring, capex confidence. it takes longer for that to impact investor sentiment though. tom: tina fordham, how do you recalibrate here? were -- maybe they write a december 17. how do you reset january?

tina: this is a big problem for analysts when the year has not concluded. i prefer to keep a running dialogue and focus on the structural aspects. i mentioned crisis response. for me, that is quite significant. it means any sudden event risks that do materialize like anezuela for example, or intensification of hostilities adventurism russian , it means the ability to rebound from those crises is weaker. that cannot be priced into markets -- i do not think that can be priced into markets. tom: is it every nation for itself? tina: i think increasingly it is. this is a consequence of governments that friendly have a lot less political capital --

that frankly have a lot less political capital. they are made to focus on domestic considerations. they are using less to solve global challenges, whether that is climate change or nuclear nonproliferation. you look at the leaders of the last decade, angela merkel and others, circumstances have forced them to focus much closer to home and they are getting punished at the ballot boxes when they don't do that. we have some upstarts as well. tom: we will leave it there. tina ford above citigroup, thank you. tony dwyer ofur, canaccord genuity. this is bloomberg. ♪

place, the xfinity xfi gateway. and it's strengthened by xfi pods, which plug in to extend the wifi even farther, past anything that stands in its way. ...well almost anything.

leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. click or visit a retail store today. comcast business built the nation's largest gig-speed network. then went beyond. beyond chasing down network problems. to knowing when and where there's an issue. beyond network complexity. to a zero-touch, one-box world. optimizing performance and budget. beyond having questions. to getting answers. "activecore, how's my network?" "all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast. tom: this morning, the shutdown is over for now. it is a bipartisan washington.

president trump goes unilateral and considers a quote, national emergency. laguardia is open. davos was so last week. deutsche bank's last decade. the qataris to the rescue. a bull market to a correction to a december bear market. debt-dwyer the balance. this is bloomberg surveillance. live from our bloomberg headquarters in new york, i am tom keene. francine lacqua in london. it was an extraordinary davos. francine: this is team surveillance. even when we fight, we get along. brexit is left, right and center this week. we have the government, the fed, a trade war. anwere just speaking to

expert in latin america who was saying they are talking about brexit because there just seems to be a million ways of doing this. it is a little bit funky, but it could have big consequences. on irelandocused after our conversation with their prime minister. right now with the "first word news," here is viviana hurtado. viviana: president trump has lifted sanctions on three russian companies. congressional democrats tried to block the action, citing concerns about the administration's motives at a time when there is investigations into russian influence in the 2016 presidential elections. the former starbucks chairman howard schultz says he is seriously thinking of running for president in 2020 as an independent. he says americans are tired of the current system and are looking for a better choice. some democrats blasting the

move, saying it could help elect president trump. theresa may could lose control of brexit in a series of votes in parliament this week. that is to suspend the entire divorce or go back to the european union. global news, 24 hours a day, on air and at tick toc on twitter, powered by over 2700 journalists and analysts in more than 120 countries. i and the vienna hurtado. -- i am viviana hurtado. this is bloomberg. tom: that going on the second board, futures at -12 -- bitcoin on the second board, futures at -12. the -- offind off to of the december 24th bottom. seeing more out of bitcoin.

francine: i am looking at dollars recovering a little bit. oil is retreating. at treasuries and yen inching higher. we talked last week in davos about china but if you look at why chinese stocks were up, the people's bank of china freed up a potential $30 million for bank , so the yuan on the back of that depreciating to its strongest against the dollar since july. tom: anthony dwyer will be with us in a little bit. the conversation moved forward friday into your weekend. we need to reset on a monday. let's reset with george stephanopoulos and his conversation with mr. stone. >> that is a question i would have to determine after my attorneys have some discussion.

there is wrongdoing by other people in the campaign, that i know about, which i know of none, i would certainly testify honestly. i would also testify honestly about any other matter including any to indications with the president. tom: joining us now is our chief washington correspondent kevin's really. steve martin on snl, this is not funny. what is the next step for mr. stone? kevin: he is going to fight this. i got a message yesterday from roger stone and he is calling this complete hypocrisy. tom: we heard that from manafort. is this going to be like manafort were they go on for a couple weeks and then it ends? , this in terms of roger is someone who is the crux of indictment --age 22 page indictment. video now,hing the there is an element of

showmanship to this. there is an element of him essentially digging in. i thought it was interesting to see the tweets over the past couple days from president trump in which she is trying to distance himself on the one hand from roger stone but roger stone and president trump on their public comments on what is going on are speaking in the same lane. tom: let me move on here. i found a really nuanced article about the other democrat party. the liberal types getting the headlines. , theen scott and box silent majority of democratic freshmen. the future lies with a larger group of democrats who eked out narrow wins in purple areas. passing targeted fix is to protect the affordable care act and malinowski says before we build any walls, we want to

focus on some bridges and tunnels in new jersey. they know they are facing a ticking clock before they will be facing the campaign trail again. how prevalent is this in washington? kevin: it is very prevalent in washington. speaker pelosi was able to keep the ranks together to win the battle but the war is far from over. there is a realization of that as democrats wake up this monday morning. the clock starts again not just for the 2020 cycle but also on the three weeks for the partial government shutdown. the thing to remember about house democrats is that they are all very different. they are very ideologically diverse. the districts that flipped in texas, the notion that those democrats are going to be able to vote against border security, a wall they can vote against getting away with -- a wall they can get it -- get away with voting against but border

security they have to take back to there's -- back to their constituents. there is that tension. we have not seen a real fight in which certain democrats want to deal with this white house, not even this white house but republicans. look out for that fight to see where folks really stand. francine: we still don't have the state of union tomorrow -- estate of the union tomorrow, right? kevin: correct -- state of the union tomorrow right? kevin: correct. opportunityly his to lay out his agenda, his policy for the next calendar year. we take a big broad view of it but it is important for the state of the union address to get into the weeds. on financial services, deregulation, housing reform, foreign policy.

all of these different minutia details. -- that is aferent real opportunity for the commander-in-chief to lay out and make his case. francine: only expecting for the government to be shut down again , and what is happening with the wall -- are we expecting the government to be shut down again, and what is happening with the wall? kevin: what i have noticed in talking to sources over the weekend is that republicans are still very fired up. the polls the came out over the weekend, yes the majority of americans do not want a quote, unquote, wall but you are still in the 40% range of people who want the wall and four out of 10 americans wanting a wall is still a large portion of america. republicans, there is a large population here that is with the president and republicans are aware of that. tom: kevin cirilli, thank you for a great monday briefing.

and eventual washington week -- an eventful washington week. us and patrick will join the senior fellow on venezuela. please stay with us. tony dwyer coming up. the recovery is done. the dwyer bounce is over. this is bloomberg. ♪

viviana: this is bloomberg surveillance. let's get to the bloomberg business flash. services provider baker hughes plans to eliminate its carbon emissions by the year

2050. -- toldtold simin l.a. bloomberg's alix steel. >> by 2050, we will reduce by 50%. -- a net zero by 2050. with the progress we have made, it is very doable and in line with what our customers are talking about. we will do it ourselves and then talk -- and then do it with our customers. italy's eni will pay about $5.8 billion. we spoke with eni's ceo. ,> a unique opportunity to grow creating flexibility, more efficiency. we want a new -- a lot of new licenses.

deutsche bank received a commitment for more investment from qatar. the money is likely to come from the country's sovereign wealth fund. two other investment vehicles from qatar already own a stake in deutsche. the german bank is trying to regain its footing after years of struggling. tom: francine lacqua in london, i am tom keene in new york. we need an equity adjustment. anthony dwyer of canaccord genuity. are hyperch notes detailed about the dynamics of the market. tony dwyer joins us this morning. let's go over the first principles. tony: the market is telling us something. we have more 10% s&p 500 declines and more vix moves this cycle.

we had 10. there were zero in 2007. there is a different dynamic here whether you want to say it is fundamental or not. our view is this is a market event similar to a 1998 or 2011 market crash as defined as 11 -- defined as an 11% drop. the mistake folks are making is that we assume the market is quote, unquote, telling us something. in business we look at the negative as dynamic and the positive as static. how do you respond when you see a company or a sector underperform within your ultimately bullish view? tony: it all comes down to fed policy. the question that we have to

answer now is the market crashed, so now what? as long as the fed maintained a dovish policy and cuts rates, you will have a pretty significant market recovery. if you go back to 1994, the fed double breaks. they adopted a more dovish view. you were almost in a recession, less than 1% growth, yet the market continued higher because of the perception of a dovish fed. francine: tony, how should i look at the fed balance sheet at this point? tony: this is a topic of debate on wall street. all of the credit folks i talk guys, do notbank understand this perception that quantitative tightening and the reduction of balance sheets has significantly affected liquidity. the reason for that is there is that ifexcess reserves

you shrank the excess reserves at the same pace that you are shrinking the balance sheet, there really isn't any kind of liquidity crisis. clearly the whole topic is created -- has created market volatility. from what i understand, and it is above my pay grade francine, it is really an application affecting liquidity. francine: over all, what are the markets getting wrong about the fed? tony: i don't think they are getting anything wrong now. what they got wrong before was that the fed did not care. this is something the fed does each cycle. they think there is a new cycle,m in each levered thinking they can invert the search -- invert the curve without affecting the cycle. was chinesele, it

buying and artificially suppressing the long end of the curve. this cycle is the balance sheet extension and artificially spread. the bottom line is it is never different. if you take short-term interest rates longer than long-term interest rates, you are going to shut down credit. tom: i want to show this chart as we go to our last question with mr. dwyer. correction, bear market, correction, we went down 20%. of we go. has all the easy money been made -- up we go. has all the easy money been made? tony: this reflects -- this reflex rally we have had. i still think you are going to get up. tom: are we double digits? tony: i think we are double-digit for the end of the year. tom: tony dwyer of canaccord genuity.

the middle child of new orleans. that did not work out. we will come back with tony dwyer. we have a few charts to show. power, gust -- the customs and border patrol former chief. nuancedan interesting interview given our path to a national emergency. this is bloomberg. ♪

tom: francine lacqua in london.

i am tom keene in new york. tony dwyer with us of canaccord genuity. if you would,hart it is individual stocks, just to upset tony. it is apple computer. i bring this up, there is always an excuse to sell any given blue-chip well researched fundamental story. what level of excuses right now? is it normal, or can we climb? tony: if i told you, going back to the market thing, if i told you that they market would be up 85% in a straight line and then correct 20%, what would you say? that's normal, that's ok. guess what happened. when you look at the nasdaq and the emerging economy. tom: how do we get back to

earnings and cash flow? tony: you always want to buy weakness. this is not a comment on apple. was i got wrong last year not the slowdown in earnings. we have not changed our estimate of 5% growth since we came out with it last summer. we have always expected you would see this slow down because of fiscal stimulus backing off and fed policy being pretty aggressive. when i got wrong was the valuation side of it. i thought everybody else would see that and be ok with it but estimates got ahead of themselves. we are backing off the earnings estimates. that slowdown is akin to so the other earnings slowdowns. tom: will the use of cash be the same? the we become addicted to use of cash assisting share buybacks and dividends? tony: of course it does.

if you look at what companies have done, they have used credit to buy stocks. there has been a pickup in capital spending. clearly there going to be buying back stock again -- they are going to be buying back stock again. -- an immediate look to certain sectors of the u.s. or whether it is longer-term. when the market was down 20% and we were hearing that it was telling us a recession was coming, which we disagreed with the entire time, the cyclical areas got totally smoked. my sector calls were horrible. you have seen a significant bounce because you are taking that recession trade off the table.

what the folks have gotten wrong over the course of the last 10 years is you have to have an inversion of the yield curve or a shutdown in credit that leads to a significant sustainable slowdown or negative economic activity. we just don't have that. when you get some of these 10% or greater declines and you are putting that session on, until you invert the curve, you are taking off. francine: what does that actually mean on where you want to stay away from? tony: more defensive areas, those that outperformed, this consumer staples, the sensitive -- the defensive areas are the ones that should have an underperformance if you are taking off the recession trade. tom: tony dwyer with us of canaccord genuity as we look at equity markets and his belief in an up-up market.

on bloomberg radio, we will speak with diane swonk of grant thornton. -- joining us on fed day on the fed meeting. this is really important. on the coast to coast feel of a new american economy. i adjust markets looking for a ihs first-quarter gdp -- markets looking for a 1.5% first-quarter gdp. from a beautiful new york, this is bloomberg. ♪

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

"activecore, how's my network?" "all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast. francine: this is bloomberg surveillance. tom and francine from new york and london.

looking tonk is bolster finances after their shares fell almost 50% over the past year. sources told us the investment is likely to be made through the qatari investment authority, the country's sovereign wealth fund. joining us now is our bloomberg columnist. why would they want to own deutsche bank if it is not for a political reason? >> you have to take into account that they have been an ambassador for other vehicles for several years now. this is part of an intensifying process of negotiation. that potentially being a means to recover some of that investment by creating a bigger bank that can tackle the very tough german market. francine: does that make sense? issa: what we are hearing that the difficult situation

that deutsche bank and commerzbank are in is forcing this discussion. what can we do to help these institutions? it is not obvious that it will --e a difference of germany state backed entities that have created very strong pressure on margins. tom: deutsche bank has a more than interesting -- let me get this up. let me bring it up here. . i am having trouble getting it up this morning. this is important. i want to be sure i get this up for elisa. this is a weighted average cost to capital from deutsche bank. this brings up the heart of the matter which is they have 90% in the debt market like any other bank. how close are they?

is going to come in and save the day which is fine but you get to a point where the math flips over and it becomes really harmful to the equity shareholders and the future of the bank. are we anywhere near that point? elisa: it depends on how you combine these entities and what model would emerge as a result. it would seem that for that bank , it would have to come with a lot of cost cutting in the home market. not to mention the fact that the recent experience of bringing together fewer banks with technology platforms is proving very difficult and costly and not all together that obvious. tom: do we have any understanding of the client agreement between qatar and the german government on this proposed transaction? elisa: my colleague does not

seem to point to that yet. obviously the next few weeks will be radical. we have earnings -- will be critical. we have earnings on friday. tom: it will be interesting to see the earnings. thank you so much. watch.ll be something to this is something francine and i heard consistently at davos, watch deutsche bank. now to viviana hurtado with "first word news." we obtained the defense department czechia assessment of cyber threats. they say they are handicapped by a lack of expertise and tools. recruiting and retaining qualified people, those are two big issues. president trump's recent spat with south korea is putting a

strain on the two countries' seven decade alliance. the dispute is playing out as president trump prepares for his second summit with north korean leader kim jong-un. more problems for nissan in the wake of the arrest of former chairman carlos ghosn. the securities is investigating whether the automaker accurately disclosed its executive pay in the u.s.. regulators also want to know if nissan maintained adequate controls to prevent improper payments. the company says it is cooperating. now to venezuela. both sides of the crisis are trying to win over the military, the country's ultimate powerbrokers. supporters of the national assembly leader are offering amnesty to any military leader who defects and is accused of corruption or abuse. president maduro underscore the military support for him by watching a tank exercise --

underscored the military support for him by watching a tank exercise. global news, 24 hours a day, on air and at tick toc on twitter, powered by over 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. patrick of the council on foreign relations has written a jewel, the sovereignty of wars. it is an exceptionally new ones on the 47anced view tension points around the world. tonyatrick joins us and dwyer a canaccord ingenuity -- canaccord genuity is with us. president lows slogans -- loves slogans. how does this president apply trump foreign policy to what we see in venezuela? stewart: there are a couple things going on here. although he tends to be insular

and isolationist, he does believe in restoring the notion of the monroe doctrine in our hemisphere. some of the language that the administration has used has been about democracy and human rights. as we have seen elsewhere, this is a selective approach, but , partly under the influence of marco rubio in the senate. he has taken a hard line. he has a hardliner as his national security advisor and now he has a hardliner with elliott abrams who has been appointed special envoy to the region. tom: you mentioned the monroe doctrine. russia and china with investment in venezuela. does that make them part of the monroe doctrine and will that be attention point -- will that be a tension point? stewart: i think it will be.

the russians are much more forward leaning in morning that the united states should not get oup.lved in fermenting a c they trumpet administration -- as teddyves that roosevelt used to say, there is an obligation on the part of the united states to intervene. the problem is there is a huge history of backlash against those sorts of attitudes within latin america. it is important to make it as multilateral as possible and be a administration is trying to do that. francine: how does venezuela end? are you expecting it to start stabilizing again? stewart: i think it is going to take time.

right now, the pivotal linchpin in the whole situation is the venezuelan military. while senior leadership has gone with maduro, there are a lot of jr. officers and there is precedent for this. that is what the united states is trying to do, but you create a major moral hazard in this situation because what happens if there is major bloodshed in venezuela? what is the obligation on the part of the united states if the people get cracked down upon by the military and there is bloodshed? will there be intervention by the united states? probably not but perhaps a proxy --ervention from columbia or said theyans have have to do it within the next week or they are going to recognize the opposition government.

i don't believe that maduro is going to try to cave on this. even if he gets an offramp in terms of some cushy place to go with him and his advisors, i see this going -- i don't think elections are happening anytime soon. tom: what is our american foreign-policy? i guess we are going to have a state of the union at some point. stewart patrick, what is the american foreign-policy right now? mocked quite a bit but there is a certain amount of swagger as mike pompeo called his department, the department of swagger. that is what you are seeing from the administration. you certainly get this from john bolton, the notion of we are america, the with it. we are not interested in international institutions. orouple real danger points vulnerable institutions including the wto which has come

under a lot of attack from the trump administration and also nato where it appears the president has discussed over the past. with his defense department colleagues why we should not get out of nato. i think it is not necessarily stabilizing this america first situation. there are mold board -- there are more bulls in the china shop. tom: stewart patrick of the council on foreign relations, thank you very much. tony dwyer with us from canaccord genuity. you have been listening. at full into a confidence in global investment. you are a domestic guy but is there opportunity? there is a terrific chart i get from my bloomberg terminal. it is the senior financial cds or you get the top 30 financial institutions and you look at credit default swaps among them.

you look for periods that were deutsche bank which was the topic of the last segment, where that is rolling over and conflict -- and creating a contagion effect. tom: we heard that in davos without question. tony: but it is not coming up in the cds market. that means less fear of being priced in. you are not showing a true banking systemic risk in the and in theet financial institutions in europe. the question i have about venezuela is what happens if europe actually recognizes the other guy? maduro has the power and the military. there was a lot of analysis on the unknown -- there is a lot of analysis on the unknown. tom: it will be interesting to see the overlay of foreign policy. i will try to figure out a chart to keep mr. dwyer entertained.

drivetime, bloomberg daybreak. digitally you can hear this in london and zurich and davos. stay with us, this is bloomberg. ♪

francine: -- viviana: this is bloomberg surveillance. i am to the on a hurtado. there is a deal to they that were combine key members of the soup -- of the semiconductor industry. the combined company would have annual revenue of roughly $3

billion. they both have the top three customers, -- bloomberg has learned they have fallen short of the remedy stock by eu antitrust regulators. to companies have agreed sell, signaling assets and longer licensing agreements. will cutk, tesla 15,000 jobs and close fish, meat and deli counters. the cuts were expected to affect the 32 largest stores. tesco has 440,000 employees. that is the bloomberg business flash. francine: thank you so much the vienna -- viviana. parliaments meaningful vote on brexit will be amendable according to theresa may's spokesperson. they also save the parliament

will have a meaningful brexit vote regardless of the eu. that is just some of the headlines we are getting from the bloomberg terminal. joining us now is one person who knows quite a lot about brexit. he is david merritt, head of our newsroom in london. what exactly are they voting on tomorrow? this is not the same thing we voted on two weeks ago. david: the meaningful vote means , if you like, the approval of parliament for the withdrawal agreement on the table. tomorrow it is parliament's chance to express its opinion. we know what they don't want which is the version of the withdrawal agreement that theresa may negotiated. tomorrow we're going to have a series of votes. they are going to lay out a range of options. is the year -- is there a majority in the house of commons for any of these? it includes a proposal for

extension, another vote for referendum, or is there a majority for a conversion of the withdrawal agreement, mainly the backstop. the europeans have 40 ruled that out but the thinking goes if parliament to show that there was a majority for that, that might be enough to reopen the talks. francine: who is going to be for getting rid of the backstop? david: we have heard from across the brexiteer spectrum, that is the key thing they want. boris johnson writing today that if you change the backstop, it is going to get the full support of everyone in britain. party that props up theresa may's government, they say if you can change the conditions around that backstop, they would come on board. change, a make this

lot of them are rallying around. why are they rallying? the alternatives are around delaying brexit or brexit not happening. that is very frightening to the brexiteers. far areid merritt, how the public from the elites in parliament? i understand there is some agreement but is the measurement year-to-year,ote, how far are the elites? david: a huge amount of frustration amongst the public that this is still dragging on and there is still uncertainty. there is a call from people in westminster for another vote. there is fear he and anger about that vote. they could be asked the same question again and that is what theresa may keeps telling -- wement, we have to would have a huge blow to trust

in parliament if we did not get some kind of brexit done. remain is slightly ahead, but it was just before in terms of the polls back in june, 2016 and leave came and one. if -- came and won. publico say the british would not just vote for that option? francine: david merritt, in charge of our european news. bloomberg users can interact with the charts shown. you log on and go to g tv to see some of tom's great charts. this is bloomberg. ♪

tom: our team in washington, kevin cirilli our chief washington correspondent start an eventful week as we move out

to any number of days including february 15 where possibly we would see another government shutdown. stay with us across all of our platforms on washington. chart,ow on single best tony dwyer of canaccord genuity is the king of managing the emotions of the dead cat bounce or as we call it the dead dwyer bounce. the depression on the left, the up wewar ii recovery, and go. how do you manage the emotion of the dead dwyer bounce? tony: it comes down to what causes a significant and sustainable drop in the equity market is the shutdown in credit. if you look at the last seven cycles, what has shut down the credit each cycle is the inversion of the 210 spread and stubbornly staying flat but positive until you invert that curve. tom: is the 210 spread now the

same spread as 1998, etc.? tony: if you are borrowing money at a higher rate than you can lend it out or you can't use short-term paper to lever long-term paper, you are not going to do it. each cycle has its own excuse that thefed uses reason the long end is artificially suppressed which creates a different cycle this time and that is what they have gotten wrong. let me be clear. you cannot fix leverage with excessive leverage. eventually it is going to go sideways. we are just not at that point yet. 2008 and evenom 2002, when you have the world come back after the.com -- after the .com, the last cycle it was

an inversion of the curve. we have not had that cataclysmic move yet. francine: where would it come from? i can't even say it. tom: she spent way too much time with me last week. francine: if you have an end of the world scenario, a recessionary scenario, where would the risk come from? tony: it would probably come from the shadow banking system. is what the fed talks about, the move into private equity and private credit, that the fed does not have the ability to track or regulate. it sounds terrible. i am not arguing they should regulate everything, it is just they have no idea. when more mortgage debt is based on shadowed banking -- shadow banking that it is on wells fargo or jpmorgan, it is hard to know when it is going sideways. you look at our data from brian

reynolds, our asset strategist, you are accelerating credit, not slowing it down at this point. it is good for equities which is why you see the chart of the day. tom: let's leave it there. francine: was that cataclysmic or what? tom: this has the 18 year in it. the morning after davos. i have not even unpacked yet. we will survive through it. ferro, rumor has it he landed at laguardia. bloomberg radio, we will do that next. ♪

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the u.s. government returning to full strength as the fed decides whether it needs it to turn off the autopilot. shootertop crane e.a. -- top trade negotiator goes toe to toe with the u.s. counterpart. and earnings extravaganza. one quarter of s&p companies report earnings this week to see how much earnings growth has slowed. daybreak.""bloomberg welcome, lisa. there is so much we are going to learn this week. >> and at least it is not 400 degrees below zero like it is in the midwest. let's get you caught up with what is going on in markets to start this big week. lot -- a lot of bearishness this week. we know trade talks are going to be held in washington,