worries over its business in india. hiring growth in january could slow to 165,000. china trade promises. chinatalks progress and bows to sustainably buy more to. goods -- vows sustainably by more u.s. goods. david: it is jobs day as well as earnings day. i will start with cigna. aey had a slight beat by penny on their earnings per share, a slight miss on the revenue. in thetock is down premarket almost 2.5%. that may be because of disappointing projections. the government will be changing to rules if it has its way

eliminate rebates for medicare. stock was down in response to that news after the close yesterday. almost 3% on that news. i'm looking at honeywell. the aerospace unit is benefiting they like boeing and 3m, have been international demand picture that is holding up well. growth rose 6%. --id: breaking news alix: you have the jobs, you have earnings, s&p futures down 2% after the best start to the year since 1987.

euro-dollar up .2%. euro inflation slowing for a third month, but core inflation rising to a three-month high. pmi's continued to disappoint from italy to germany. citi cutting their buy rating on treasuries because of the oil price in venezuela. its best record since january -- david: cory booker has announced he will run for president. not a huge shock. he is the former mayor from newark. he's been a senator from new jersey for several years now. harris has also announced. now booker has announced that he will run for the

democratic presidential bid. alix: how many does this make? eight or nine? david: we have a year to go before the first primary. they getonder how weeded, if the democratic party comes together or splinters. when is crunch time? new hampshire starts at running. you get to south carolina and then you have super tuesday. by next march -- alix: 13 more months. ok. david: time for bloomberg first take. we are joined by carl riccadonna and rachel evans. let's go to jobs. we will take a look at what is expected right now.

165,000 jobs added. that is the consensus. average hourly earnings staying where they are. not that there's a strong different signal there. our forecast and came up with a stronger outcome in that front. there's a big miss relative to our consensus call. thingss a signs of two -- the government shutdown dragging on private contractors because government workers who were furloughed will be kept as employed and the other, if we see some adverse weather affect. we could see people who worked shorter hours or didn't work because of severe weather. that activity can sometimes disrupt the normal flow of job growth. alix: there's contractors --

carl: that will be in the private sector employment numbers. watching that category to see if there is a compelling story. alix: the best january since 1987. rachel: investors ending the month looking upward and forwards. as theyren't as excited were in the past. the federal reserve had some big news, still evaluating whether this means a whole change in policy going forward or if the pause is temporary, whether a cut or a hike could be next. powell said he will look at inflation. people will be looking at hourly earnings. in terms of whether people are looking to trade off this -- amazon, really interesting

quarter, really interesting chart reaction. hours, for the last 24 it dipped down after the earnings came out. what was your biggest take away? , it is the india piece tough to tell what's going on there in terms of the growth market. that will make it harder for amazon to sell into that market. revenue growth is slowing down. that's an interesting take away for me. the headline number has been fine. if you look at what they are projecting going forward, that has been taking a hit. david: the tech area has been so dominant. it is still growing, just not growing as fast. a proxy for the global economy. rising input costs,

predominantly labor costs, that's a major theme for 2019, which people are attempting right now but as the year wears on, inflation pressures will put jay powell and team back on a tightening course. this is not the peak, just a pause. david: he said trade was a big issue. they have their eye on china trade. president trump had this to say from the oval office. >> we have made tremendous progress. that doesn't mean you're going to have a deal, but i can say there's a tremendous relationship and we've made tremendous progress. david: what about china and trade? deficit withde china has gotten wider over the last year. the tariff and trade measures have had little impact. china has let the currency devalue, which has largely

offset the costs of the tariffs at the macro level. little impact of consumer inflation, not that much impact exporta inc. as an powerhouse. i don't expect to see much change to that going forward. we are talking soybean imports and whatnot. this is not doing anything to economice malaise in the rust belt. alix: china imported 10 million tons from the u.s. a year ago. 5 million is peanuts. china, itf flows into may not be a lot, but totally different story with emerging markets. rachel: 10 billion flowing into that moneyrkets --

is going to emerging markets. of funds allocated toward china. you are making a bet on china. you look at china specific funds , no flows last month. people are getting a position on china. carl: very risk on after a risk off q4. alix: find all the charts we terminaltb go on the -- g tv on the terminal. taylor has a roundup. taylor: you mentioned honeywell. we've been looking through the press release and getting some comments. shares rising after they spun of f two businesses in october.

there themes, e-commerce and defense coming in higher than estimated. they gains they are seeing in the commercial aerospace business -- orders up 15% this year. this is on the heels of the optimistic picture from boeing as well, citing strength. -- cignas falling. alling.f managers have passed that to consumers. that is being blamed for rising drug prices. this proposal could be devastating to the current pharma ecosystem. rising, a bit less so, sales guidance coming in a bit better but their key cancer blockbuster drug came in much better than expected.

that is the biggest drug within the human health division, making up 20% of revenue. gardasil revenue was up as well. that is the largest drug they have in their vaccine business. that makes up a percent of their revenue -- 8% of their revenue. more on theg up, expectations for january's job numbers with the city research global chief economist -- citi research global chief economist. live from new york, this is bloomberg. ♪

viviana: this is "bloomberg daybreak."

the slump is getting worse at deutsche bank, reporting revenue shrank for the eighth straight quarter. that will complicate christian sewing's plan for cost cutting. the government brokered merger with commerzbank is possible. shares of amazon falling in premarket trading. they gave a lukewarm first quarter sales forecast. that has raised concerns about rising costs,, slowing retail growth and a murky outlook for business in india. apple temporarily pulled important app development tools from google. google developers had their access restored last night. apple did the same thing to facebook after discovering the social network was using app development to collect user data. thing all good economists appear to agree on is

the strength of the u.s. jobs market, with expectations today added 165,000 jobs last month. forecasting 210,000 jobs added last month. catherine mann, the jobs market seems to be robust. up what the unemployment numbers show us. how big a determinant is that of your overall view of the u.s. economy? catherine: the strength of the u.s. economy is being generated off a strong labor market. it is showing up in wages and employment. that means consumers have money to spend. january numbers will be a bit difficult to interpret. we have four variables. rate, theipation household survey and the payroll survey and unemployed workers during the federal shutdown are

treated somewhat differently and then we have wages. alix: when we get the numbers, where will be look for the shut down? catherine: payroll will treat the workers who are supposed to get their backpay as being employed. the household will treat the workers as unemployed if they say they were unemployed. there's always some difference between the household and the payroll survey. this is just an exacerbation. david: what about secondary effects? how about the people serving them lunch, parking their cars? catherine: those would be treated as unemployed in the household survey. in the payroll survey, it would matter whether or not those and notere hourly

working that week. alix: claims numbers jump higher. do you treat any weakness in the jobs market is temporary? catherine: it will be hard to tell. that is part of the challenge. this is the challenge of not having the data. when you have crosscurrents to begin with and then you have data that are contaminated by other events that are unexpected, it makes it even more difficult to figure out what's going on. david: the jobs data or hard data -- what are the soft data? is thatsentiment, indicating there may be clouds on the horizon? catherine: consumer sentiment data, that survey was taken during a turbulent time, during

the shutdown following the december stock market turbulence. there are a number of factors both real and timely that will affect the consumer sentiment. whichr or not these data come in and are crosscurrents ,ut are going to be negative how much does that further cloud the sentiment assessment going forward? it exacerbates the slowing of the u.s. economy. even though the delta is slowing, the economy is still incredibly strong. that's domestic resilience coming from an extremely strong labor market. alix: let's talk about labor force participation rate. slack then wemore might have thought -- van we might have thought -- than we might have thought.

japanine: it's not just with regard to europe as well. the u.s. is one of the few countries where labor force participation has fallen. in these other economies, it has policy changeshe were to encourage labor force participation in europe particularly for women and in japan for older people. the issues in the u.s. are with men who areime age still not in the labor force as much as they would have been in a previous time. there's still room to bring those people back. it's possible the continuing tightness in the labor market will bring those people back. david: there are government policies that can do that. women were underrepresented in japan. in the u.s., the problem is the reverse. are there things we can do to

bring the men back in? catherine: that is partly a business proposition. going out and hiring labor and doing some training. people have been out of the labor force. there's also changes in the handling of previous issues that some people have with regard to incarceration or drug dependency. these are issues at the business side of things. for government policies, there is a role for them to play with regard to subsidies for education or bringing people back for training for the types of jobs being opened up. it's a combination of what business needs to do and what the government can provide through education financing. alix: catherine mann will be sticking with us. coming up, amazon's incredible growth machine, raising concerns

about first quarter forecasts. this is bloomberg. ♪

alix: tough 14 hours for amazon, falling in the premarket after reporting a tepid first quarter forecast. still haven't been able to recover from that level. it raised concern on the slowing retail growth and a murky outlook in india driving costs. this is a change in revenue we've seen in deceleration in the last few quarters. dan morgan joins us now. buy they the dip -- dip? >> good morning. happy friday. i heard you talking about the concerns of future revenues in the first quarter.

we've owned the stock for a long time. it is a stock that people can look to buy on weakness. it continues to be on our buy list. they had tremendous strength and a lot of their core primary growth areas, advertising and the u.s. cloud. those are two areas that did extremely well in the first quarter. david: they did well in advertising and the cloud. are you concerned -- they are selling more stuff provided by third parties and they have a lower margin? interesting, you look at the operating margin, it was a bit below what they had in the third-quarter, around 6.5% dropping into the high 5% range. there was a bit of slowdown in

terms of revenue growth and international in both north america from the first quarter and year-over-year sales growth. we are seeing a bit of compression there on margins. they still beat. they had a great beat in terms of operating profit. it was well above what the street was looking for. a strong quarter. it doesn't really matter what these technology stocks come in with. wall street is so skeptical, they have to hit on every knee-jerk. catalystbe the next was going to be india. how do you get the next catalyst? me, the core retail business -- i'm more excited

about what's going on in advertising and aws. those are higher profit margin areas. those are the real things to look forward to in terms of amazon. the core retail business will always be the low-margin business. you are right about india and what they are doing and rationally. internationally. alix: thank you for joining us. china up, the u.s. and site progress in trade talks -- cite progress in trade talks. this is bloomberg. ♪ i'm a veteran

and the army taught me a lot about commitment. which i apply to my life and my work. at comcast we're commited to delivering the best experience possible, by being on time everytime. and if we are ever late, we'll give you a automatic twenty dollar credit.

my name is antonio and i'm a technician at comcast. we're working to make things simple, easy and awesome. unstopand it's strengthenedting place, the by xfi pods,gateway. 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. alix: this is "bloomberg daybreak." happy jobs friday, everybody. the best start to the euro since -- the bestties start to the year since 1987 in

equities. as european banks continue to get hit for the second day, deutsche bank woes way on that weigh on that sector. headline inflation slowing for a third month but core rises in europe. pmi's across the board came in weak. a lot of selling, a 16 basis point jump, the most in a month. cutting -- they want to be selling treasuries because oil could keep on climbing and that would change the inflation expectation in the market. headlines fast and furious. over the weekend, there could be some severe developments.

doorilitary going door to -- david: it is pretty bad down there. cory booker is the latest democrat to throw his hat into the ring. the junior senator from new jersey announced he's running for president. he said the nation needs to see its leaders and feel pride, not shame. one of the mysteries of the political crisis in venezuela. gold shipping out of planes from cargo caracas landed in dubai. the trump administration warning the investing community not to deal in commodities that may be stolen from maduro. learning the u.s. will

suspend its obligations under the 1987 deal and eventually scrap it altogether. the agreement was seen as a pillar of international arms control. the administration claims russia has violated the treaty for years. the u.s. and china say there's been progress after two days of trade talks in washington. spend onromising to u.s.-made goods. president trump threatening to increase tariffs if there is no trade agreement in a month. for now, he sounds encouraged. >> we've made tremendous progress. i can say that there is a tremendous relationship and warm feeling and we've made tremendous progress. viviana: global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. david: the u.s. and china may be making progress in trade talks,

but the chinese economy continues to slow. still with us in new york, cityrine mann cit of citi research. pmi's have been coming down in china. catherine: the slowing of the chinese economy has three elements to it. ,hen was the engineered slowing credit controls -- one was the engineered slowing, credit controls. there were concerns about the pricing of real estate. there were concerns about theoyment security because private owned enterprises were bearing the brunt. now, we have the trade on top of that. there's a triple whammy hitting the chinese economy. there's a lot of different policies trying to change that trajectory. david: how much of it is trade

and how much is endemic? exports are trailing off. hard toe: it's really distinguish between how much exactly came from trade, but trade really came in at a difficult time for the chinese economy anyway, certainly exacerbated what was the slowing anyway. it makes sense for them to look at taking that difficulty off the table. alix: another story we are watching -- deutsche bank. time is not on the side of christian sewing. matt miller to the company 's cfo. matt: how much pressure do you feel from the german government to show them targets or go into merger talks? ofwe feel we are in control

our destiny and executing against our plans. we are proud of having achieved in the milestones we did in 2018, achieving financial milestones we promised the market. we intend to do the same in 2019, leverage all the work we've done with the businesses, serving clients, executing our strategy. all of the stakeholders around us should see us execute on that and that puts us in control of our destiny. matt: is there some strategic help that merging with another bank would offer you in terms of revenue? >> i'm not going to comment on specific items. there's a lot of talk in the sector overall that over time, mergers in the european banking sector would be sensible for a variety of reasons. we have tended to agree with that.

what form it takes and how long it takes to do is anybody's guess at this point. matt: previously, deutsche bank had said no merger talks until 2020. is that still the line? >> we've been clear that we have homework. we have executed on that homework and we've seen evidence of that. we will continue to see evidence of that in 2019. matt: could you rule out a merger this year? >> i think i've answered the question about our general view of consolidation. we are focused on executing on our plans. we will demonstrate our progress over time. matt: what about the external issues like trade, the european economy and brexit? how much of a difficult variable are those? >> we operate in the environment, whether it's the

underlying economy, working with clients to support our businesses and the interest rate environment as well. we swim in those tides. we have to draft our business model is to reflect the environment, the opportunities and the challenges. we've been working through that. it has not been easy. i would cite the interest rate environment. when you are paying for cash versus earning on it, it is a huge difference but it's part of something we work through. alix: matt miller to the deutsche bank cfo. us, catherine mann of citi research. what does that mean for the ecb? catherine: the ecb is challenged because it has the asymmetric

objective, close to but below 2%. that leaves them with less room to maneuver when core starts to rise. normally, we would think that's a good thing because returning the tightness of the labor market would benefit the workers. consumption in europe is strong. it is to keep europe balanced against external weakness. we would like to see more robustness in the labor market in europe, more wage increases. if that passes through to prices, that's a good thing because it represents strength. david: we are seeing a strong labor market. what accounts for the fact that you have wages going up but you don't have inflation going up? catherine: oil has been very weak. the pass-through of oil to headline inflation is strong in europe and the u.s. alix: when you walk it forward in terms of growth, pmi not

great across the board, german orders at a six month low, how much of that will be domestic and how much is trade how much of that will be domestic and how much is trade? much of that will be domestic and how much is trade? catherine: between the u.s. and europe, there are trade issues in the background. if there was a change in that climate, you would see a turnaround in the overall pmi's in europe and the overall prospects for european growth. we are looking at the balance. how long can domestic consumption carry europe forward? that is a headwind. david: german has been an export driven economy. any prospect that they could and get chinese route consumers buying more things? catherine: some of the weakness

we've seen in germany has put fiscal policy on the table. it has been off the table for a long time in germany. now, it is part of a regular conversation. there's concern about whether or not there is more infrastructure to do. the discussion is turning to tax cuts. alix: may be and commerzbank maybeet together -- deutsche bank and commerzbank will get together. on monday, the conversation seems to be they will be diverging. what is the conversation now? catherine: we've got a lot of different pieces of information from the fed statement. saying diplomatic way of -- catherine: for both of the central banks, what's happening in the global economy is a key ingredient. the u.s. tends to not look at

that as closely as the ecb. this is an important headwind affecting the growth rate. they both are facing external headwinds. the u.s. has the additional issue of financial market turbulence. that is less of a concern in europe because credit is still strong. the u.s. has two challenges, external and financial, strong labor, strong domestic. david: thank you very much, catherine mann of citi research. from sport betting to big tech ads, we look at big money and the super bowl in today's wall street beat. this is bloomberg. ♪

viviana: this is "bloomberg daybreak." hour, thein the next paycheck ceo. hedge fund manager david einhorn trying to make up for a bad 2018. greenlight capital rose 13% to post the best january in its 23 year history. last year was the worst for green light. airways will consider buying more superjumbos if the price is right.

ceo says airbus has not --ered reasonable pricing nissan and renault stepping up their investigation following the arrest of their former leader for financial misconduct. automakers are looking at fees, up to $20 million a year with boeing consultants. alix: we turn to wall street beat. it is super bowl, super bowl, super bowl. betting big on super bowl 53. legalized sports betting bringing in $4 million -- joe theismann's investment playbook. and big tech's super bowl game play.

the biggest players in tech spending hundreds of millions on tv advertising. atlanta,ining us from jason kelly, i've super bowl bureau chief -- our super bowl bureau chief. we have bets on the game. jason: this is huge, david. good morning from beautiful atlanta. it is jumping. the betting scene will be massive. $6 billion of bets may be placed on the super bowl. that's because the landmark decision from the supreme court made it legal in six states. david: not all of it perfectly lawful. more of it can be lawful this year. side, on the legal

casinos think it will be $320 million on venue. we talked a lot about that yesterday. alix: are you betting? i don't have a lot of skin in this game. i'm looking for a good game. alix: joe theismann talked about how he's investing. thing i'm looking at is the cannabis industry. deltaryptocurrencies, airlines and warren buffett. jason: it was an amazing conversation. by and heann stopped started rolling. he talked about cannabis. he was very serious. he was getting alerts on his phone about canopy.

he's talking about crypto, quoting the price of bitcoin. injury,rience of that the most famous fracture in the nfl -- he talked in detail about what it was like on the field, what joe give said to him -- joe gibbs said to him on the field. david: how did he square investing in cannabis and bitcoin on the one hand and following warren buffett? cann: i don't know if you quite square it. he's an intellectually curious guy. he loves him some warren buffett. that this is a

guy who spends a lot of time deeply researching what he's going to invest in. definitely paying a lot of to those new trends. david: we all look forward to the ads during the super bowl. the tech guys are going in. a 90-second and a -second ad. jason: it is amazing. there's some rich irony here. these are the companies that have taken so much digital ad revenue away from traditional means. we are talking about the super bowl. everybody is watching the super bowl.

that's how go daddy became famous. amazon, google -- sounds like facebook is sitting out this year. ago: reminds me of 15 years -- tv is dead. it's all going to be online. we are still here. david: live sports are not dead. over: the media is all downtown atlanta. a lot of tv stations and radio stations. david: what is the line? what is the over and under on this thing? who are you rooting for? i think it is patriots 2.5. i had dinner with my parents last night. rams went tothe the same high school as my

brother. i have to go for the rams. alix: david? david: patriots. tom brady, michigan. alix: that's right. go cats. david: northwestern is not playing in the super bowl. you can bet on them, if you want. dailynto businessweek from 2:00 to 5:00 eastern time. apple punishes google. googlemporarily blocked from testing apps over privacy concerns. alix: check out tv . watch us online, click on our charts and graphics and interact with us directly. this is bloomberg. ♪

david: there's a major battle going on between apple and facebook and now google on the other. it started with facebook being discovered they were paying let them have full access to their iphones. apple saying we don't like that at all. tim cook going after facebook. on monday, this is what he tweeted out. let us all insist on action and reform for vital privacy protections. apple says you can't post directly anymore. google had a similar thing going on. google, same thing with you.

you can't post apps directly. alix: isn't it resolved now? david: it will be difficult if they can't post directly to them. it will be hard. there's a larger issue here. system iselieves his a closed system, it is safer. he thinks that is better for people. it is a competitive advantage. facetime bad the bug happened earlier. david: unfortunate timing. people could listen in on your chats. not so good. alix: coming up, the latest jobs numbers a little over 30 minutes from now. don't miss that. in the markets, the best start of the year since 1987. now, we are taking a bit of a pause.

european equities off .4%. european banks continue to get hit. take a look at what's happening with euro-dollar. headlinesflation coming in soft -- headline inflation coming in soft. italy and germany coming in weak. orders and germany hitting a six in germany- orders hitting a six month low. the 2-10 spread a bit lower. this is bloomberg. ♪

alix: jobs count down. hiring growth in january could

slow to 165,000. china trade promises. trade talks progress and china vows to sustainably buy more u.s. goods. spend more, grow less. more negative guidance than positive. x on earnings out just moments ago -- exxon earnings out just moments ago. news, you have exxon earnings per share of $1.41, capex of $7.84. alix: they made $6 billion in the fourth quarter. a good chunk of change. the earnings blew past estimates. not sure if the comp is going to be legit.

the real interesting story will wind up being on the call. they've had a lot of earnings and production misses. can they move out of that into a new area? the worst annual performance since 1981. investments they've off.will start paying thatoduction comes online, will be a different story for exxon. david: what will they do with all that cash? alix: investors really want the buybacks. the company saying we will not cave into this. we are going to reinvest. a wait and see when it comes to the jobs report. s&p futures down 6%. number?hold in the jobs euro-dollar up .2%.

headline inflation coming in weaker, but the pmi's continue to disappoint, particularly in italy. 10 year yield goes nowhere. oil could see an increase due to venezuela. breather after its best month ever. david: it is jobs day and earnings day. taylor: cigna and cvs shares lower. cigna's 2019 profit forecast missed estimates. 3.4%.dical costs trend to president trump wants to curb the rebate program and pass that to consumers. that is being blamed for

increasing drug prices. well ines lower as sympathy. 2019 sales guidance coming in better than expected. drug came inr rival top five $500 million in sales -- topped by $500 million in sales. exxon, a big beat. reportedch shell yesterday, setting a high bar. i'm focused on capex. they didn't believe the oil rally in q4. we will wait and get on the call

and bring you updates as they happen. alix: permian production was up 90% year on year. it helped drive their overall production growth. they bet big and it's delivering big. challenge in december isn't getting better going forward. this is the percentage of downgrades versus upward guidance revisions. they haven't changed. greene.us now, megan what have you learned from earnings season? >> the outlook is definitely negative. some people have called for earnings per session -- recession. they've come up 13.5%. revenues have trail that. that is the much more interesting piece. here, why areon

these estimates down so much? because the economy is slowing or the i input costs are going up? david: it is not quite apples to apples. megan: there's a lot of massaging that can happen in that way that can't happen with revenues. we learned ine terms of companies passing through cost increases and margins? firms aren'tlly, feeling like they can pass through the costs. -- hear oncalls calls more and more firms complaining -- we are still not seeing much pass-through. we live in the age of amazon and walmart. firms don't feel like they can

pass the costs to the consumer. david: does that take away the concern with concentration? concentration has gone up substantially. megan: they are contributing to this concentration issue. you get these superstar companies and workers can't compete for wages. david: the concentration affecting the buying side rather drive pricesou down. megan: it depends on the industry. in retail, prices are being driven down. in health care, prices are driven up. alix: what has been the biggest question mark for these companies? megan: growth and inflation,

probably more on the growth side. that's why there's so much concern around and earnings recession -- an earnings recession. alix: if you did poorly or barely beat, you are getting rewarded. megan: maybe what firms are doing now, companies are kitchen bading it, putting all the news at the beginning of the year. will beegan greene staying with us. headlines --the what's going on? the latestry booker democrat to throw his hat in the ring. the junior senator from new jersey announcing his running for president.

that he is running for president. the trump administration will ake steps to pull out of medium-range nuclear missile treaty with russia. they will eventually scrap the deal altogether. the agreement was seen as a pillar of international arms control. the administration arguing russia has violated the treaty for years. both the u.s. and china have said progress has been made after two days of trade talks in washington. beijing promising to substantially expand purchases of u.s. made goods. the two sides are planning more discussions. president trump threatening to increase tariffs if there is no agreement in a month. >> we have made tremendous progress. there is a tremendous relationship and warm feeling and we've made tremendous progress. viviana: global news 24 hours a

day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. alix: china promising to buy more u.s. goods. the u.s. saying there's progress in those trade talks. us.n greene still with 5 million tons of soybeans. that will cut it for you? megan: definitely not. that is a drop in the bucket. i expected that china would delineate the stuff they would buy from us in the u.s. would and off on trade for now -- the u.s. would back off on trade for now. feeding tons of coal into the furnace to stabilize the economy, the u.s. slows down, i can't imagine going into

an election year without the administration picking another fight. struggling, is going down. megan: december was unambiguously awful. some numbers suggesting stimulus is starting to hit. underestimate how much china has been doing. in addition to the monetary stimulus china has been offering, they are leaning on the banks, giving them liquidity. there's a ton of fiscal stimulus going into the system. some estimates have it at 4% of gdp. like tax deductions on childcare, education, mortgages, rent, that's huge.

me how muchask china will do to stabilize the economy, the answer is how much it takes. alix: what is the pass-through for them? they will put their money where their mouth is. economy?a reflation andn: we saw this in 2009 2012. china bailed us out. if china accelerates this year, that will help germany a lot. it could mitigate the global slowdown we are seeing. think it mitigates the slowdown we started going into this year. david: will china cut its rates? some predicting they will cut rates. megan: it is possible.

they are using helicopter money, though. because the banks have a balance , they are reticent to lend it out. alix: how does the trade conversation wind up changing? when do we start to hear more things about ip? 2gan: going into the march deadline, they will come to an agreement, that will stand for a couple months. then we see trade re-escalate. alix: what will we be prep for? >> the markets will be pretty euphoric off a deal.

i don't think it will last for very long. alix: 88 million tons of soybeans. that's how much china bought last year. to in thealked they would like it if they bought 5 million more tons. coming up, just under 20 minutes away from the u.s. january jobs report. we will get a read on hiring with marty musee, the paycheck ceo. this is bloomberg. ♪

alix: u.s. jobs expected to rise for the 100th straight month. one hadts looking for 65,000 new jobs -- 165,000 new jobs. ,oining us now, martin mucci the paychex ceo, and megan greene of manulife asset management. megan: the fed blamed muted inflation for the turn. maybe they will take that back. we will see. the weather will be a factor in january. it always is. quirksill be a bunch of

to look through in this report. david: last time, we saw a big uptick in the participation rate. megan: that is the big question. if we run the economy a bit hot, maybe we will get people off the sidelines. down, weu.s. slowing are probably running a bit less hot. david: how do you see it? you are writing this paychex -- those paychecks. martin: these are employees under 50 -- we saw a slight uptick in the growth rate. we think there is bit of a positive there. wages only going up 2.5%, that is a bit concerning because we expect them to be a bit stronger. alix: what have you noticed from the shutdown? you look at what companies are saying. martin: one in five small

businesses, under 100 employees, were directly impacted. impacted were directly by the shutdown. use saw that certainly around the washington, d.c. area. a lot of federal workers out. that certainly around the washington, d.c. area. looking forward, will there be another shutdown? federal workers not buying services, they are not able to get small business administration loans through. there's a number of things that could slow down small businesses with the shutdown. ofan: do you have any sense what impact the weather will have? i'm wondering if you have any insights into that and payroll

-- in payroll. martin: there have been temporary shutdowns of businesses. you will see weekly hours down in january. that could impact that somewhat. i don'tis online today, think it will impact it too much overall. about 20% said there was an outlook change to the downside. 13% to the upside. what was that? martin: i'm not really sure. we didn't get a lot of great feedback on that. it could be a shift in buying patterns, a shift to certain fromcts or services

competitors impacted by the government to others that are not. i don't think that gave a positive outlook going forward if this happens again. some will be positive about this. alix: when it comes to wages, , is that still what you are seeing? martin: definitely. there's a lot of minimum wage increases that went into effect in january. you are seeing those lowest wage earners getting the largest workerss, but salaried below 2% for the average hourly earnings increase. earners getting the biggest increases around 3.5%.

when you roll in the tax reform, the average person saw 5% increased overall net pay last year. david: are they having difficulty finding the trained laborers they need? martin: it is still the number one issue with small businesses. they don't have as much work our flexibility, benefit packages and recruiting powers. this is still the number one issue for businesses, finding the right people. businesses small have declined taking on work because they don't have the people. david: thank you so much, martin mucci, paychex ceo. megan greene of manulife asset management sticking with us.

markets weighed on hiring managers. this is bloomberg. ♪

david: president trump came to office promising jobs would be his top priority. jobs in steel and coal and manufacturing in particular. >> i said i would be the greatest jobs producer god ever created. factories are coming pouring back into our country. we will build our steel industry back. the steel folks will be very happy. we will cancel the job killing restrictions on the production of american energy, including shale, oil, natural gas and clean coal. ready, because you will be working your assets off. to make such an incredible

hisstment, the chairman put faith and confidence in the future of the american economy. if i didn't get elected, he would not be spending $10 billion. david: that last reference was foxconn. stock on howo take the president's policies are actually working. this chart shows what's happened with steel employment. on the left, employment coming down. on the right, how many hours you need to produce it. megan: we've seen this in the past couple of months of data. which iss have fallen, what the economic theory

suggests should happen. it is behaving exactly as we expect. tariffs, had the therefore the raw materials go up and they cannot pay their workers. what was supposed to help them didn't quite pan out that way. megan: they go to other countries for steel and avoid the u.s. altogether. it shows up in the jobs data with a significant lag. david: how about coal? going back into the mine? megan: nope. we are turning away from coal to other sources of energy. tariffs aren't going to address that. that is an unstoppable trend. you hadou had -- alix:

natural gas stuck in the ground. that could strengthen the nuclear coal conversation. david: it's all about the weather. once again, the weather explains what's going on. president, to the manufacturing. manufacturing jobs have come back a little bit. megan: a little bit. it's not clear that is a reflection of tariffs so much as a reflection of a continued onnd, not a new one based new policies. david: the rust belt, they have not come back. closures.saw gm plant we have seen that in certain

parts of the country. this is not based on policy. this is just a continuing trend. if farmers feel better, they can sell their goods. does that change? megan: you might get a slight boost to the economy if there's a detente on trade. david: we've been shipping a lot of soybeans. alix: maybe they will pick up. megan: we saw this before the tariffs, a massive front running of the tariffs in gdp growth. it will be coming back. david: they have created a lot of jobs. there's no denying that. that otheruld argue administrations have also created a lot of jobs.

this is a reflection of underlying economic strength. alix: one minute away from the jobs number. let's check in on where the markets are. earnings coming in, best start to the year since 1987. s&p futures down .5%. bankean banks -- deutsche fixed revenues did not hold up. --ot of eco-data coming in euro-dollar up .2%. core inflation picking up, but pmi's disastrous anywhere you look. a lot of selling in the bond market in italy. yields up 18 basis points. will happen when the jobs number comes out? .45%.down

payroll is expected to come in at 165,000 jobs with the rate holding steady at 3.9%. we turn to bloombergs michael mckee who is live at the labor department. michael: the labor department still showing little impact from the government shutdown. unemployment does pick up to 4%. in january. created december's job numbers were substantially revised lower, to 222,000 from the initially reported 312,000. still good, but that is the biggest monthly revision since 2014. revisions or up a 10th on the month. no contribution from minimum wage increases. they are up 3.2%, a healthy number. hours worked unchanged. 170 5000employment,

federal workers reported being on temporary layoff, enough to push the federal worker unemployment rate to 2.6% from 2.2%. discouraged worker's rises substantially to 8.1% to 7.6. categories of drive -- of job creation, 900 of those in primary metals, 3000 in metal fabrication. 52,000 construction jobs. interestingly, construction pay dropped 5.4. no big holiday layoffs in retail. coal mining's job fall by 100 and for those of you nerds who are missing your gdp figures, a proxy for that, weekly hours were up 3/10 to 110.9. reaction, the dollar off

the lows. not a lot of real movement during the curve continues to flatten in the u.s.. megan greene, you're a nerd, so here's your chance to say. megan: this is a blockbuster jobs report oath in terms of hourly earnings and in terms of hours worked. for all of the concerns about underlying weakness in the economy, of which there are not that many fines in the hard data, this suggests that is right. the economy is strong. will be interesting to see what the fed does. for all of the worries the fed will not be hiking rates, i think there is an argument the data will justify that. david: it is an interesting question whether mr. powell would've said the same things the same way if he had these numbers before hand. megan: exactly. construction and manufacturing are high wage/high our jobs.

the trend has been adding jobs in low-wage sectors, but this is bucking that trend. david: we keep adding these jobs way past the point we thought we have be exhausted. the labor force participation rate is still inching higher. that might suggest more excess capacity. megan: it means we might be able to pull people in from the sidelines and that is the fed plan. i think we need to rethink our definition or estimate of full employment, which the fed has revised a couple of times. i think they want to revise it again. alix: mike, what about you? theyel: this is the month do the annual benchmarking and compare the numbers they have estimated to figures from unemployment filings. they have lowered the civilian labor force by more than 500,000. you cannot compare the december and january numbers as you would

any other months. it does suggest an even tighter labor market in the sense there are fewer workers available to come back. the fact we still continue to create that number of jobs remains impressive. this is the 100th months in a row of job creation, a record. david: i want to come back to the revision issue because some people are saying watch it. as you said in last month's take thei think if you first reported number from last year and put it together with the estimate here and compare it with the actuals, we are still up. it is a bigger number. the number we came down last month is not big enough to offset the month in which we have exceeded what was expected this month. it is still positive. michael: it is all very complicated. the tinfoil hat crowd sometimes gets excited. what we are doing is

substituting estimated data for actual data and it does show changes. however, the changes for 2018 are minor, the lowest since the 1980's. nothing in that. the december and november numbers have not been changed because they are still working on those figures. nothing to see here is the case. monthhard to compare a over month change from 2018 to 2019. the three-month average is 241,000 jobs which is robust. david: we welcome bloomberg intelligence chief u.s. interest .trategist ira jersey let's answer the question megan posed which was what does this mean for the fed? ira: the fed did not want to be as dovish as they were. this does not change the fed outlook in the near term.

the fed is going to be on hold. we knew that employment was the bright spot in the economy. i think that for the fed they want to see a preponderance of all of the other data. new orders data to start turning before we start talking about the hike. i think what is important is you look at aggregate labor income, you take everything you look at the paycheck of the economy and that is growing at the peak of the cycle. it is now at 5.5%. we have not seen that kind of growth in wages since the middle to thousands. this is 12 to 13 year best levels for the job market. alix: when we had that huge move in the dollar and yields on wednesday, fed chair jay powell spoke, you are selling the dollar, we are seeing that reversed, yields are just up by one basis point.

does the market need to rerate even more or are they going to be waiting for the extra data points? ira: i think the market needs additional data. the front end is what is most sensitive to the fed move. over time as we get better data you will probably see steepening in the yield curve. with a fed that will continue to be cautious, even if they do hike one time or two times late in the year, it is going to be hard for that front end to move. 10 year yields moved a little bit further than they should have. our model suggests that 3% is closer to fair value, even given the lower data. david: when you put this with inflation data, significant real wage growth. how long can we keep that up, keep increasing wages over 3% and have the inflation rate where it is? megan: a great question. there used to be a great relationship between wages and inflation.

it is a great question and no one has an answer. wage growth is supposed to seek into inflation. we have disinflationary forces in the economy. i think we'll probably continue to get wage growth pick up a little bit. inflation will remain soft because of house prices, which i do not see changing. we will get wage growth without inflation and maybe the fed will use that as an excuse to remain dovish. david: michael mckee, one of the things that stood out to me as the underemployment rate. people want to work more than they are working. you put that together with labor force participation going up, what does that say about slack in the marketplace? michael: it does suggest there is some room on a month-to-month basis. you never want to make a big change, but this was a fairly large increase. it may show more people coming

back into the workforce. it does suggest that if that continues or if we do not see it come back down, there is room to hire more workers. it can also mean there is a skills mismatch, a big debate among economists about that. people available for jobs but because they do not have the right skills, they are not getting hired. david: thank you so much. megan greene, i jersey, and michael mckee. the economy added 304,000 jobs in january. you had a revision lower for december, but as megan pointed out the three-month moving average still coming in strong at 241,000. a big jump in labor force participation rates. the highest in over five years. ,verage hourly earnings december was revised up to 3.3%. manufacturing gains soft and a

little bit but the market moving -- the market moving as you would expect. just one or two basis points and s&p moving higher. it is all modest considering the big move we have seen this week across asset classes. david: these back to back job reports are extraordinary. i thought it would come down because of reverting. alix: more slack. david: let's get an update on what is making headlines from outside the business world. viviana her toddler is here with first word news. president trump says he never spoke to roger stone about wikileaks. last week asested part of the special counsel investigation into russia meddling in the 2016 presidential election. the president also telling the new york times he has been reassured he is not a target of the special counsel pro.

the presidentn wants more disarmament in his summit with him john. .- with kim jong-un tim esmay no public commitment to disarm since agreeing to work -- kim has made no public commitment to disarm since agreeing to work toward that last june. while nicolas maduro and juan guaido jockey for power, 20 tons of gold are piled up for shipping. there is speculation the gold may be headed to divide. the trump -- two dubai. the trump administration morning not to deal in commodities that might be stolen by nicolas maduro. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm viviana are taught a -- i'm viviana hurtado. david: breaking news.

officialeo making it the united states will withdraw from the intermediate nuclear forces treaty that has been the mainstay of nuclear disarmament for 30 years. the united states claims russia has been violating it. russia denies it. president trump his administration of threatened to withdraw and now he is making it official. a lot of people are concerned about this issue geopolitically. alix: still earnings trickling out. chevron up over 2%. earnings coming in at $1.95 a share. record production in the fourth quarter and the for your output they still see of 4% to 7% growth. were down 74%,gs and downstream earnings were also hit as well. because out tax reform you do not have the tax reform boost. those part of the businesses

wound up seeing a big decline. that is an interesting conversation we will be having. david: with quite a few companies, not just with them. as we take a look at what happens to those tax cuts. let's give you an update on honeywell. out with their earnings, a mild beat on both earnings and revenues. stock up about 1.6%. the honeywell ceo is talking on the call. on the one hand he says yes to be prepared for an uncertain economic environment, on the other hand they do not expect any material impact from the higher tariffs. that call is going on as we speak. they are up 1.6%. .oming up, ge's crown jewel we take a look at the company's aviation unit in the final day of our inside ge series. richard, thewith group vice president. this is bloomberg. ♪

kailey: this is bloomberg -- viviana: this is bloomberg daybreak. i'm viviana hurtado. coming up on daybreak, larry kudlow. alix: the u.s. economy added 304,000 jobs in january. jobless rate moved higher because you had a jump in labor force participation rates and the highlight is there was a jump in primates labor force participation rates for men. the area of the market that have been left out of the job market, they came back in full or force which has helped the jobs number .nd help put wages up to 3.2% the market taking all of this in stride. david: that is a great point. prime age men, that is what

we've been waiting for. very important. time for follow the lead, a deep dive into the stories making headlines in moving markets with the insight from industry veterans and insiders. all this week we took a look inside general electric and now we take a look at its aviation unit. chairs yesterday ge's surged with the aviation posting an increase in revenue which set ge to close out its best month since 2009. shares rising 34% since january. joining us from washington is richard aboulafia, teal group vice president and brooke sutherland. brooke, gives an insight into how important aviation is to ge. brooke: this has been the workforce for ge for the past couple of years. revenue has been strong posting great numbers and it will become more important to ge as it moves

forward with its plans to spin out that health care division. you'll be left with a two-legged stool. they will also have renewable energy but that is a smaller business. the real question is can aviation keep up the momentum and can they continue to keep it competitive? until yesterday there was some speculation they might try to sell off the aviation unit. was that a wise decision? richard: i think so. it represented a potential source of cash, but it would have jeopardized the market standing of their commercial jet engine unit. you have this wonderful relationship between people who finance jet purchases and people who build new jet engines. even though it was a partial way out of their financial issues, in the long-term it would have damaged their competitive interest in the commercial aerospace market. alix: was it possible to sell g

cap -- to sell gecas. there was talk of private equity firms could come up with a big enough equity check. richard: that is a legitimate question. this was a very big player in the aviation business. there was talk they could break it up or sell parcels of aircraft. the market for jetliners is still strong. i think we might have moved past the great days of purchasing jet portfolios, that is to say leasing assets. there were great moments a few years ago. it might've been possible then to purchase the whole thing, somebody, chinese capital, but now it probably would've required a breakup and that would've diminished the total value. alix: as you look at aviation down the road, there is been speculation about spelling's middle-market aircraft and whether that will materialize.

do you see ge being competitive given the challenges it has elsewhere? richard: there are only three engine primes in the world. each of them have very big problems. issues,ugh ge has major so does everybody. it is an interesting moment of time, looking at 797 and ma. you can see the impact of gecas. when a company like ge goes to talk to boeing about providing a power plant, one of the key arrows in their quiver is to say not only do we build a great engine, but on top of that we have this leasing unit that will guarantee you an upfront order for 50 or 100 of these, thereby bolstering its business case. having gecas as part of ge aviation, you can see how this adds to the competitiveness. david: is a good business, they

will hold onto it. it will help them stop the bleeding. but they have to grow the business as well. can they grow this substantially and how? richard: this is a big issue. 797 plays a big role in that. frankly is the ramp on the single aisle narrowbody families. they have a 50% position on the a320 neo series. they have a 100% position ongoing 137 max. max. boeing 137 those programs are ramping up nicely. there is talk of going beyond 60 jets per month to perhaps up to 70 and maybe even beyond. , anything that makes the commercial jetliner market looks good mix their growth prospects look good. one problem is they also have an 777usive position on boeing

on the current generation and the next generations and that is been hit by headwinds. david: richard, thank you so much for being with us. teal group vice president. brooke sullivan has been with us all week long. she is a bloomberg opinion congress -- a bloomberg opinion columnist. alix: more on what i am watching, next. this is bloomberg. ♪

alix: here is what i am watching. amazon earnings. that stock down 5%. joining us is a loop capital market senior research analyst. he reiterates his buy rating. what is the street missing? >> i think sales are clearly slowing but part of that is the law of large numbers. amazon did $233 billion in large sales. it is hard to continue to grow

at 30% or 40% year-over-year. there is a shift going on in the retail side of the business where more their sales are to third parties. amazon does not record the entire sale price, they just record a portion of the sale. that is a much higher margin business for amazon. the last thing they're missing is amazon is becoming a profitability machine. markets continue to expand year-over-year and their cash flow is exploding. david: one of the things that has happened is they have moved it advertising. will they start taking away from facebook and google? anthony: i think eventually. they are still behind in terms of capabilities on the advertising side, but i think it is a matter of time before they become a significant impediment or to facebook and google. right now they are the number three player but pretty far back from facebook and google. alix: what will be the next catalyst for them? anthony: i am waiting for the

next big whale, the next big opportunity they go after. it could be the health care industry. it could be something else. think about the saying your profit margin is my opportunity. alix: a fair point. anthony of loop capital markets. let's check out the killer job numbers. the unemployment rate moves higher but that is ok because the labor force participation wrote rose as well as prime age male workers came in to the job market. that does it for bloomberg daybreak but coming up on the open, larry kudlow, the national economic council director. this is bloomberg. ♪

jonathan: from new york city, i'm jonathan ferro. the countdown to the open starts right now. ♪ jonathan: coming up, payroll

friday giving another big number. hiring topping -- wage gains cool. data in asia painting a much uglier position. just as trade negotiations in washington claim to be making substantial progress. in the market this friday morning, good morning. januarybehind a monster and starting february with a monster payroll report. yields ticking higher by just a couple of basis points. .65 on the u.s. 10 year let's begin with the payroll report. joining us from the labor department's michael mckee. a big topline and a big revision. ,ichael: 304,000 jobs created but as you mentioned we had a big revision to the december numbers. that originally came in at 312,000 which put