francine: timing is everything. jpmorgan says the dead -- the feds dovish pivot could push the recession past 2020. president trump strikes a positive tone on talks with lunar yeare approaches. with the year of the pig be a trade deal? ryanair slumps. holds risks from unexpected brexit developments. are non-eu shareholders of which the u.k. will be a part, will not have voting rights for a amount of time you be forced to sell down to eu nationals.

francine: welcome to surveillance, i'm nejra cehic in london. in for francine lacqua. we started the equity session trading water the were now moving to the downside. off by 0.2%. we had that big jobs number out of the u.s. on friday, the reason to pause for the fed. the 10 year yield mukai or by five basis points on friday. the dollar on his third day of gains, up 0.2%. the reason we're seeing weakness in emerging-market equities and fx so far in today's session. plus to discuss in the week ahead. rate decisions from the r.b.i. among others.

we also speak to chris christie, the former governor of new jersey. that's 5:30 p.m. london time. we look forward to to the state of the union address from president trump as well, the we see anything on trade? plus bloomberg businessweek looks at the fbi investigation ato huawei's dealings with semiconductor company in chicago. let's get the first word news. the u.k. business secretary is urging theresa may to reletting no deal brexit according to the financial times. these comments coming as they said -- as nissan says they won't build the suv at a plant in sunderland. the times is reporting ministers are now considering withdrawing a 60 million pound report -- support package for the carmaker. donald trump at the present of china are considering a meeting

in vietnam at the end of the month. the post is reporting that the u.s. and chinese presidents are looking at holding a meeting on february tweeze seventh and 28th. a report out today sheds light on huawei. we are following in investigation into their dealings with the chicago area start up. here's the company's ceo explaining what happened. huawei want to work with us on private negotiation. they would have been in contention. he would work with any company within the limits of the law. but if you try to steal the technology, there will be recourse. >> president donald trump is standing by his plans to reduce the u.s. military footprint in the middle east. he says he must keep tabs on

iran. he says when it comes to the country, you will ignore the advice of the intelligence community. we were in many locations in the middle east. huge difficulty, every single one of them was caused by the number one terrorist nation in the world which is iran. when my intelligence people tell me how wonderful it iran is, if you don't mind, i'm going to go by my own counsel. itsn a swear would defend country in the event of a u.s. led invasion according to nicolas maduro. this is escalating protests over the weekend. marshers from both sides on the street. donald military intervention in the country remains of -- remains an option. the governor virginia says he won't resign over racist yearbook photo. fellow democrats are calling on the governor to step down following a national outcry over

photos from a 1984 medical school yearbook. he says the photos are clearly racist but the people shown in blackface and the kkk room are not him. according to the washington post, he is weighing his options with senior staff. in sports, the patriots. the rams 13-3 in low-scoring super bowl ever. tom brady extending his lead for ae most super bowl wins for quarterback to six. now the most that great a player in history. but like causing controversy with the u.s. corn lobby. it's called out competitors for the use of corn syrup. corn growers are disappointed in the company but the owner of that light says it fully supports industry and will continue to invest in it. global news, 24 hours a day and at tictoc on twitter have been within 2700 journalists and analysts in more than 120 countries. this is bloomberg. thank you.

some of us are still groggy in london. jpmorgan says the change in tone may cause investors to reconsider the timing of the investment cycle and shouldn't be driven by fears of recession. the fed signaled it is done raising rates for a little while. is, quote, coming around to the view that policymakers should wait until wages in inflation rise before hiking rates again -- rates again. join us now are our guests. great to have you both. me turn to you first. let's look at this issue of recession. where do you stand on the recession monitor? i would say i don't think we differ hugely from your lead-in from j.p. morgan. we were not of the opinion we

would see a recession this year. we still hold to that view and agree that one rate rise more is a possibility. where i worry, and this wasn't mentioned in the piece i read this morning, a lot of people are getting the opinion that perhaps the next move in rates is down and not up and i think we've got a long way to go before we get to that path. or an economic slowdown into 2020 but whether that turns out to be a full-blown recession, we will have to wait and see. nejra: paul, good day to you. had on friday, some are saying that solidified the view of a strong economy but perhaps justifies the pause given what we saw on the wage data. telling us hard data about the next move for the fed being up or down? paul: good morning to you.

it's an open question. we tend to keep the idea that with more rate hikes from the perhapsy have to digest a slightly weaker q1 in terms of growth but the market is strong enough to wear on more rate hikes. recessionee a coming when we try to computer probability. it went from 20% to 12% which is quite low. you're quite confident in the future. i'm hearing from both paul and you, is the market should be preparing itself for a rate hike or two this year. what does that mean for how you position in u.s. equities? are you starting to get defensive? julian: i think we are starting to get more defensive into 2019

anyway. what i was say about the market now, the debate is around if we say the consensus -- contents it forecast for the s&p 500 is hundred $73, it's around 16 times. the question is will we see any extension or are we going into slightly slower growth for the cycle should the market be trading at 16 times. this is going to be a debate for investors. a lot of investors last year talked about pe contraction. that's where the debate will be. overweight in the u.s. but much more defensively inclined. what about value of a growth? with the economy, it's growing reasonably. you need to be slightly careful about buying deep value. certain areas of the market will become more attractive.

oil companies in particular can become interesting if we see global growth begin to improve. need to be slightly nervous around some of the more deep discounts. looking at the cycle as we look ahead in 2019 come where the see the 10 year treasury yield in the year? paul: i think it should be a bit higher than the current level for two reasons. fed would nothe move from rates, the 10 year yield is to love by about 13 points. fact that weo the have a shrinking of the balance sheet of the fed and the expansion of the side of the public debt. so it should be a little bit higher. scenario thathe

the rate should behind once or twice, he can put even higher. -- it can push even higher. nejra: our guests stay with us in up next, a report sheds on chinese tech giant huawei. into ainvestigation chicago company and their dealings. in exclusive conversation with the ceo. recognizing the interim president. this is bloomberg area ♪ -- bloomberg. ♪

nejra: the crackdown on china's ei continues. bloomberg has been following an fbi investigation, specifically their dealings with a chicago start up. their efforts to obtain u.s. trade secrets. with huaweiaged since 2016 unlike many of the smartphone providers, it's gone relatively the same. organic outreach from technology scouts seen article reference to to the recent -- discoveries. interest in the technology. some of the materials, and therty testing, rest. >> at some point, something went

wrong give you cause for concern. in sending some of our samples for nondestructive sampling as we do with other potential customers, we received back on the second round of sampling a sample and have been damaged. damage in the sense that a large portion of the glass was missing and broken which was very concerning for us. ther seeing this portion of glass that was missing, they realized this is not some in that could be done in shipping. more so, attempted theft of intellectual property. >> you are thinking of the time, this could be theft. take me back to that moment. you receive for the sample has come back. damaged, in pieces. you're thinking what? >> the worst case. >> was the worst case? theft of ourht

technology in the race to bring to market before us. >> if they are successful, what happens? >> all of our years of research and develop the millions of jobs and the capital and human capital in the future jobs just evaporated. >> did you worry that huawei given its reputation deserved or not the companies have from china for ip theft that this might happen? >> we are always cautious and had reason toe believe by reputation to proceed forward a little more cautiously, certainly. get the sample back and find a damaged and do what? >> reevaluated our options. do we spend the amount to figure out on our own because of failure to reach out to those in our network?

that mean the fbi. >> you had a relationship with the fbi. >> fes chicago, yes. what happened -- fbi chicago, yes. >> what happened then? tothey very quickly came collect the sample and expressed willingness to cap -- to test it and conducted the test. they wereyou think interested? >> dimon as material is restricted so this material is very tightly controlled for been shipped us out of the country. mainly because the material is generally understood to have such a potential and electronics , mechanical applications, and others. so united states considers man of diamond technology to be a national security issue? notches nano diamonds but

diamond broadly speaking. when they decide they want to move forward with an investigation, what do they do? >> once they came to the termination of the cause, they respect to the company and introduced some members from the and thent of justice prosecutor from new york in addition to a few others. >> they asked you to do what? >> they indicated they would like to proceed forward in their investigation would like our in terms ofn in it information sharing and making ourselves and our material available for that investigation. samplen the additional plus of re: milk mitigations. the nondisclosure agreements and letters of attend -- intent we had with walkway -- with huawei. >> the sample years actually

left united states. how'd did you learn about that? had caught itwe on a call with one of our contacts with huawei. we had a follow-up conversation with them recorded in which they had in kid -- indicated they had --fact shifted from china shipped it from china. states, left united went to china, and came back broken, what does that mean? at the very least they violated export restrictions and shifted that shipped it overseas for testing. covenant in terms of bad faith negotiation and explicitly will agreement. >> it's difficult to know and you may never know exactly what they wanted to know what -- no

but what might they have wanted to know? >> benchmarking the technology, we are very well reputed in the market so in terms of the optical parameters, the strength performance, the quality of the material, i think that's a good representation of what a leading diamond material should look like. -- how wet, however came about construing it and the techniques are used to implemented and perhaps taking it a step further. applicability, those kind of rounds. nejra: that was bloomberg's reporter speaking with adam khan. you can read the full report of the allegations on the bloomberg. more next. this is bloomberg. ♪

nejra: the u.k. business secretary has urged theresa may to rule out in no deal brexit according to the financial times. comes as nissan says it won't build an suv at a plant in sunderland. it cited ongoing uncertainty about the split from the eu. our guests are still with us. paul, let me come to you. onot of people commenting the fact that the bank of england is in a brexit bind. we get a decision and forecast

this week. says the economics central bank was to prepare investors for the possibility that rates could go up as soon as may. could they? paul: i think it's a bit early. pound to very weak justify a rate hike. it's true that the u.k. economy poorly as theas european economy as a whole. too much uncertainty for the time being. it will join the other central bankers on the more emotional side. nejra: should you be selling the u.k. if you are uncertain about it? gone, ifhose days have i'm honest. overseas investors will be looking for opportunities to invest in the u.k. in the last

month when we saw there is hope that we might have an extension or that a deal be struck, we saw buying optimistic u.k. stocks by investors. they'll be an area they'll be looking at. ofrseas investors took a lot money out of the u.k. in the last 24 months. nejra: thank you for joining us. julian stays with us. it's the lunar new year, what would the market look like in the year of the pay? this is bloomberg. -- of the pig? this is bloomberg. ♪

nejra: economics, finance, politics. this is "bloomberg surveillance."

we are an hour and half into the cash trading section in europe. front, up a on the quarter of a percentage point. the cac 40 a bit weaker up .1%. we do have u.k. data breaking with u.k. construction pmi dropping to 50.6. estimateo missing the by 52.5. account holding losses against the dollar. it was already weaker going into this day. trump and xild jinping are considering a meeting in vietnam at the end of the month. they're looking at holding a and 28.on february 27 a report out today and bloomberg

businessweek shares on huawei. here's the company's ceo explaining what happened. huawei would have been in contention. we wanted to let them know we are willing to work with any company within the limits of the law. to try to steal the technology, there is going to be recourse. pegida and spain ido as thegua president of venezuela over maduro. donald trump says military intervention in the country remains an option. the new england patriots being

the l.a. rams, 13-3 to win the lowest scoring super bowl ever. extending his leads for most super bowl wins, six. bud light cousin controversy. competitorsing out for their use of corn syrup. corn growers are disappointed in the company. 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. say goodbye to the dogs. the 12th and last animal in the chinese zodiac is approaching. in the midst of a trade war and economic downturn, here's a look at what analysts are expecting for the rest the paid. -- year of the take. -- pig.

year.ar new holiday air passenger traffic growth is likely to fall short of 2018 with beijing's push to stimulate consumption unlikely to benefit airlines. china's social credit system. any wrongdoers will be barred from boarding trains and planes. still, more than 400 million real trips will take place with 10 new tracks being put to the million areucky 7 seeing trouble aboard. cyprus and south africa are some of the countries to relax visa requirements. when it comes to digital red packets, the competition among tech giants remains fierce.

when checked -- winchat is now the latest company to computerize envelopes. investors should focus on limiting losses in the year of the pig. that could weigh on high-end brands. bloomberg intelligence said luxury retailers are unlikely to replicate last year's sales gains. for a less expensive option, perhaps trey flowers, a whopping 10 million pitots are going on sale. ♪ still with us is julian.

fed, thatn't fear the along with u.s.-china trade tensions are your two biggest themes for investors. it looks highly likely from all of the mood music from donald trump and chinese indications that we will get a deal of sorts, and that will probably be around march and will be quite high-profile. i don't think the problems will have gone away. we had a piece of intellectual property rights and effects earlier. i think that is going to be one of the sticking points that probably won't be fully resolved. nejra: what does this mean for the dollar? i was reading a piece this morning that was talking about the number of u.s. companies coming up in citing a strong dollar is a headwind for learning. are we going to continue to see dollar strength impact u.s. earnings if these trade tensions rumble on? julian: yes.

with the fed on paths and talking devilishly, we are probably seeing the dollar toughen slightly which will probably bring an easing for companies for the first quarter into the second. as tensions rise again, we may see dollar strength again as protectionism raises its head. you think we will see china's economy react? julian: our view was unlikely we would see anything until the second quarter. i think it is fair to say that our best guess was some improvement for the second quarter on. there.stay the u.k. and spain have ido asized juan gua venezuelans interim president. this is international

of nicolas maduro. joining us now is our executive editor for international government and julian is still with us. guaidort of outreach is doing? what does he want from china? rosalind: he probably just wants to talk. haveson who does information has told us that has been initial discussion with the chinese embassy in venezuela. when he probably needs is just to open the door. china has been a very big investor in venezuela, but also a strong supporter of chavez and now maduro. they would have to switch sides if they thought that guaido

had a chance of forming a government. if he came into power, he would be giving with an economy that is in shatters. skyhigh prices for goods, difficulty for ordinary people, beyond the in the longer term, reconstruction. we're talking about projects that would require deep pockets and the great demand for immediate return on investment. nejra: how likely is it to actually step up to the plate as much as venezuela needs it to? rosalind: they have interest there to protect, the can probably write off some investments they may previously. they need oil and they want to secure supply and they have good investments there they want to protect. secondly, it makes sense for in whatbe present america would consider its own regional backyard. china has been there for decades just reminding the u.s. they are there, strategically.

having a relationship with the future administration would just make sense. nejra: we were just talking about the dollar. i may you think it looks unlikely to climb as we enter the new year, this makes you constructive on emerging markets. do you see any opportunity in venezuela given the backdrop? julian: i think for those very .igh investors we have tended to favor more asian areas for developing awayts and have shooed from latin america. changing.e that i think volatility around returns in the area and also you had a very strong rally, so consequently, i think we hold fast. are you looking to take

the opportunity in the first half of the year, then perhaps when we do get the fence in the second half, you look to fall back a little bit? julian: i think it is fair to we will have to see how those economies perform and how the markets perform. we may take profits, but i think you are right to be agile in those markets. very long-term, there is a place to be. nejra: thank you so much for joining us. rosalind and julian stay with us. this is bloomberg. ♪

nejra: this is "bloomberg surveillance." let's get the bloomberg business flash. viviana: wire cars searching. have notrom it fired found conclusive evidence of criminal conduct. the financial times reporting a senior company executive is suspected of using forged contracts for several suspicious transactions. the company says they fundamentally contradict the reporting. sony slumping the most in .requent five years there is also a full-year revenue forecast operating in common gains following to about

$620 million for the holiday period. a.b. in death has reportedly picked jpmorgan and morgan stanley for a potential public offering. the world's largest brewer could be considering hong kong as a venue, but a final decision has not been made. the ipo could raise more than $5 billion.bloomberg data showing only three asian share sales top that much. nejra: thank you so much. markets shame to 22 billion francs from the swiss private banks asset management. the chief executive says he is proud to be inflows.

i feel confident that we can deliver the money based on a couple of elements. we are positioned very nicely in the markets globally, we have also entered some new markets and we have focused really on the markets where we can make a difference. last year, we invested in thailand in japan. we will see some net inflows from there. onwe commented a bit more we'llofitability side, put the cost program in place, which is a combination of general expenses of personnel expenses to come closer to the 68% target. nejra: you mentioned some personnel expenses. the fight for talent in wealth management is well known.

your predecessor is said to have held talks with potential new hires throughout the industry towards the end of last year. are you worried about losing talent? --nard: we expect pete t we attracted more than 100 relationship managers to our platform, which shows the attractiveness of our platform. optimistic that we can deliver on what could be called the normalized hiring of about 80 relationship managers the year. manus talked about these stock drops last year, dropping more than 40%. it has recovered a little bit, but with where those stock

prices are at the moment, a concerned julius bar is a target at the moment? concerned. am not we lost a bit of our premium, but if i look at price-to-book, we trade as 1.5. price to net book is almost three. if you compare that to some of the competitors, it will be difficult for them to come up with a takeover plan and persuade shareholders. number two, in our industry, there are almost no untimely takeovers because it is a service industry where you need to have declines and people on board. with these two facts, i am comfortable and i think the risk for a takeover is low. the board in me want to continue to be in the driver seat. that was the ceo of

bernhard hodler. sustaineuro stoxx index a rally without a recovery in the regions banks? you can join the debate. still with us is julian. i have got a chart i want to show you which is the euro stoxx banks relative to the broader index. the question you posed is will this ratio ever rebound? let me ask you if euros in equities can sustain a rally without a rebound? unlikely.think it is will they ever rebound, i'm sure they will begin to recover. you need consolidation within the european banking sector and a continued right down to performing loans. we have seen some movement, particularly in italian banks.

mornings to be done. -- more needs to be done. i think german banks a lot of room is around possible consolidation within german banks. i suspect we're going to need to see consolidation in eastern european banks as well. nejra: how much can the ecb help? ultimately, then i got to be a role on the part of the management teams at the banks. so far, there has been quite a lot of discussion, but it is quite a big step particularly for these bigger banks to come together. the consolidation will mean jobs being lost in quite painful write-downs as well. nejra: we were talking about growth and value earlier, you were talking about how you look for the proxy for those often in banks and tax. tech.

what sectors do you think will outperform in 2019? julian: i think if we get a deal around a china trade deal with the u.s., that will be very helpful for german exporters. more cyclical manufacturing stocks will have a bit of a philip. -- fill up. you really need a bit of an improvement in the european economies. if that occurs, probably some stocks will do better. i think we are not particularly positive on europe, haven't been for the last couple of years. nothing is on the horizon that will persuade us to put more money in europe versus the states of japan or even looking back to the u.k.. have got domestic market that has been under a lot of pressure. if we were to get a reasonable brexit outcome, the u.k. could look quite interesting. interesting also

that you have brought up as one of the regions that could potentially favor over europe as japan. i was talking to a guest this morning that was comparing europe and saying it was on the brink of suffering a japan-ification. that a lot ofk work has been done around governments. we have talked in the past about that. i think there is more to be done. as always with japan, these reforms are more glacial than not. i still think it is an interesting play on china stimulus as well. they will be better as an economy if we see that the kicking for. -- if we see that kicking through. nejra: thank you so much. up next, we will look at the biggest movers this morning,

including ryanair. the ceo is stepping back from day-to-day management. this is bloomberg. ♪ ♪

nejra: economics, finance, politics.

this is "bloomberg surveillance." let's see what stocks are moving the most this morning. annmarie: i'm going to go with 11.5%.this isarly the company said they found no concrete evidence that has to do with criminal misconduct. it has to do with their singapore office where there were allegations of fraud. downside, down more than 4.5% this morning. they reported more than 19 million euros in net outflows. coming in quite soft. also a bit softer on guidance for the medium-term. nejra: thank you so much. we continue in the next hour. tom keene joins me out of new york.

speak to chris christie, the former governor of new jersey. don't miss that interview. lots of great interviews coming up. lots to talk through with the markets. we are talking follow from the jobs data on friday. european equities struggling for direction. this is bloomberg. ♪

tom: this morning, where did january go?

it is time for a february reset. the dow moves from their markets -- bear markets. nearing record highs. brexit, it marches on. the irish backstop is key. no word on when the prime minister goes to brussels. the experts get the super bowl way wrong. a defensive battle, brady on top. maroon 5. this is "bloomberg surveillance." francine lacqua off. francine recovering from watching the super bowl. she told me she was going to watch every play. likeine called in dead half of america today over the rep. lowenthal:. -- over the super bowl as well.

i was fascinated by all the discussions around the halftime performance and maroon 5. a number of artists who pulled out and then the appearance of spongebob squarepants. to go back to the u.k., looking at the boe, it really is in a brexit buying. february 13 is the key dates we are looking at. keenehe highlight in the living room was the appearance of spongebob squarepants. president is standing by his plan to reduce the u.s. footprint in the middle east. he tells cbs news he intends to in partresence in iraq, to keep tabs on iran. the trump administration is sending 3700 or u.s. to the outlook order with exit code. border with to the

mexico. tosan dealing the latest low theresa may and her brexit deal. ey are scrapping plans to build a new vehicle model in nikkei -- the u.k. may is expected to return to brussels in a few days to speak changes. jerome powell is reportedly coming around to the view on raising interest rate. fed is saying he should raise rates again. 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.

return in the market today is how i put it, a curve steepening over the last couple of days. good morning to chairman powell and the curve steepening. .55, showing a good equity market. 30 year bond doesn't move. the bloomberg dollar index on the front foot for the third day. we saw again on friday. underlying why we are seeing a positive in the wages data. emerging markets drop a little bit after a three-day rally. brent crude up more than 1%. the fight for also bores

oslosified today -- bors. thank you so much for joining us on the program. great to have you with us. it is a pretty complicated to ration that we are looking at. why did you decide to accept nasdaq's did over euro next? >> it is very complicated. it has been a strange situation. wasstart of the process organized by the investment bank. of directorsd decided to open up the process, we have been working with both nasdaq and euronext to compare the two offers over the last few. -- less few weeks.

nejra: in your discussions with nasdaq, do you get the sense that it would be in any way prepared to go higher to convince euronext to fold? bente: we haven't discussed the financial part of the offer. i think it has been very important for us to make sure that we had the best valuable position in capital markets going forward. nasdaq thattely the stands for the strongest value for prediction. tom: on christmas eve, there was basically a revolt of your shareholders. you just mentioned how you are looking out for the employees. are you in the shareholders on the same page this morning? te: i can't talk for all the

shareholders, but i do believe euronext before christmas but that was the only proposition. the obviously also thought it was a wide process. tom: how long do you expect this bidding war to go? will this extend out into february? te: it is very difficult to say because i think of euronext and nasdaq will have an application within regional authorities, which are the ones that decide at the last. the limitation is approximately four months. isra: i understand that it the norwegian authorities that will have the final decision, but let me ask if there had been any of the parties you have talked to at all.

bente: yes, but shortly. we have been in touch with nasdaq and euronet. tom: very good. greatly appreciated. the exchange heavily weighted to oil in norway. we spoke to lawrence kudlow on friday. coming up, chairman to the president's council on economic advisers. worldwide from london, from new york, this is bloomberg. ♪

tom: good morning, everyone.

francine lacqua watching every moment of the super bowl, called in dead. us to resetwith here on a friday. when i look at the february reset of the economy, the reset is for a slower economy. how slow is slow? i get italy in recession, euro, 1%. what do you see for u.s. economic growth? aaron: we have penciled in about 1.8% for the first quarter. in the second quarter, we are probably already re-accelerating as trade uncertainty begins to fade. tom: how do you change asset

allocations? i think on the back of the reset by the fed, it opens opportunity to at risk in emerging markets. we have taken opportunity in ,ome of our strategies particularly in emerging-markets. nejra: how much of that is based on the pause you may or may not expect from the fed this year? i think there are a couple of things going on. the deceleration we are seeing in global growth has actually more recently been lend more by developed markets and emerging markets. we had a lot of weak growth priced into emerging-market assets. on top of that, one of the big headwinds for emerging-market assets with the timing in dollar liquidity. the fed is certainly on ponce. -- pause.

dollar is drifting, and we do think that we are likely to get some kind of truce in the year in china. when you put together a relatively attractive valuation in emerging-market assets, i think a more positive growth relatively em speaking compared to expectations in effect on -- and good on pause is a indication for investors to go to em. you look at the jobs data that we got on friday, will you balance those two out? arend: when you look at the whole world, the external matters to the whole world except for u.s. beginning to look at the u.s. separately.

wait have is a bit of a disconnect between the labor market and everything else. housing is weak, investment is slow down. it is a little bit unclear what to make of that. even the employment data, there are puzzling things. ae household survey showed contraction on friday. i think it is a bit of a mixed picture. overall, the u.s. is hanging in there. nejra: that means we are quick to see what? arend: we have priced out the fed hikes, so that has been a big move in yields. at the same time, we have had a big loss of global growth momentum. if you think about euro-dollar, those have happened simultaneously. hikes,ice out these fed euro-dollar has done nothing. what is good to happen is everything is way to go in reverse. i think we're probably going to price that some fed hike.

we are also going to get the real acceleration in growth in europe by the middle of the year. gives us is a slow grind higher in euro-dollar. tom: i have to go sophisticated here. december down, january up. what do you see for february? david: i don't think anything is guaranteed. i was it was otherwise the case. i think you are right. we have basically a panicky selloff in the summer markets. back,e taken much of that if not all in equity markets. only two thirds of it back in credit within europe. i think that sets us up if we do get a truce in the trade conflict between the u.s. and china.

for markets to basically climb the wall of worry and grind higher, we have clearly had a very strong january. i don't expect that to be repeated in february. one thing i would also say, i do think investors right now that i have been speaking to haven't actually committed huge amounts to this rally. year atember that last the beginning of the year we had a very strong january and february. people got very aggressively positioning. after.very painful think a number of investors have not been as quick to commit capital to this rally, which gives me some comfort that we can kind of grind a little bit further even after what has been a very strong january. tom: good to reset with arend and david in the beginning of

february. tomorrow, it is a january event. david westin demanded the state of the union be in february. state of the union tuesday night with david westin and the president of united states. stay with us, this is bloomberg. ♪

viviana: this is "bloomberg surveillance." management changes on the way at european discount airline ryanair.

the ceo will move to the newly created role of group ceo. the chairman will stand down next year. ryanair is having a tough year. a series of strikes forced it to recognize unions and then there is brexit. in the event of a hard brexit, what that would involve is that our non-eu shareholders will not have voting rights for a. time and willd of be forced to sell down to eu nationals. the stock market route shaping -- shaving $22 billion off of assets. the soft -- the ceo saw one bright spot. >> we had a fantastic first half. it was more difficult in the

second half. very clearly, we lost assets under management. -- i'mk equity markets quite sure with the net that we figured. more than $17 billion is the second-highest we have had in bar.istory of julius showed weaker revenues and the playstation. extraordinary article in bloomberg businessweek. in theith us on huawei venetian hotel in las vegas. businessweek was downstairs watching a tiny company in the

federal bureau of investigations together.sh this has about 18 moving parts. arend: i was therefore an fbi sting operation at the venetian casino. it would bek advisable for me to explain how and that there, but i was about 100 feet away in the food court. the point here is that the fbi is investigating huawei's dealings with this tiny chicago orrtup that has perfected come close to perfecting technology that would supersede gorilla glass as the industry standard on smartphones. we know all of the narratives so far. the indictments that came out about huawei's efforts to steal u.s. technology.

you heard the story about t-mobile in 2012. this is further evidence, not that theyi did but may have been trying to pilfer american trade secrets. the government is taking this very seriously. nejra: good to see you. how did the small startup know that huawei was trying to steal its technology? arend: they were hoping to customer huawei as a just as it was hoping to cultivate samsung, apple, all of the world's makojor smartphone manufacturers. here's the company's ceo. >> in sending some of our samples for nondestructive sampling, as we do for other potential customers, we received back on the second on sampling our sample that have been damaged, damaged in the sense

that a large portion of the glass was missing and broken. after seeing this portion of the class that was missing, we realized this was not really something that could be done in shipping, but more so attempted theft. arend: they had no choice but to conclude that huawei was coming after the technology. nejra: is it possible that they were after more than just smartphone tech? arend: it is. this diamond felt technology they have been working on for so many years has applicability beyond smartphones. scenario, we have been publicly discussing some of the work that we are doing on the defense and aerospace side. they could potentially put them in the right direction in terms of what to optimize. context case under the

of corporate espionage, simply wanting something to differentiate, giving them the leading advantage. options -- two bad options. tom: what has the fbi responded? you said you don't want to devils how you were there, what are the confidence of the fbi this morning? arend: this is a live investigation. it is standard practice for them not to comment. that is exactly what happened when i went to them. tom: did you talk to huawei? arend: i made repeated efforts and they do not respond. tom: this is discrete and separate. erik: it is possible this is a tentacle of a much larger -- nejra: rigorous work.

thank you so much for joining us. you can read the full report on the allegations against huawei on bloomberg businessweek. much more coming up. we are looking at the markets of looking ahead to the president's state of the union address. we will discuss a little bit of europe. brexit always on the agenda. this is bloomberg. ♪ the latest innovation from xfinity

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like never before store. the xfinity store is here. and it's simple, easy, awesome. nejra: me nejra in london with tom keene in new york. -- i am nejra cehic in london with tom keene in new york.

we have had headlines coming brexit commenting on saying a no deal brexit should be avoided and in terms of what was discussed with angela merkel , saying japan has agreed to raise the level of that partnership and reached an agreement on intelligence sharing. tom: always interesting to see germany and japan meeting. here is viviana bank. . viviana: ralph northam meeting with senior advisers. fellowre calls from democrats to resign. he says it is not him in the picture. a report out today shedding light on allegations that huawei has been trying to steal u.s. trade secrets. an fbihatzker following investigation into its dealings with a chicago area starter.

this ceo accuses huawei of trying to steal the glass he invented. >> they wanted to work with us on product negotiation. it would have been in contention. we wanted to let them know we are willing to work within the company within the limits of the law. if they steal technology, there will be recourse. viviana: president nicolas resistis bowing tvowing to u.s. intervention. he says the use of military force in venezuela remains an option. his armed forces and militias are preparing for an invasion. the new england patriots coming out on top in the lowest scoring super bowl ever. 13-3.eat the rams only one touchdown was scored in the final quarter, tom brady the oldest quarterback ever to win the super bowl.

if his his sixth win in the big game. the super bowl is the most valuable sporting event in the world, according to bloomberg intelligence. slow, itgame was so was better to show these stills than the video. viviana: our editing team did a better job. global news 24 hours a day and at tic toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm viviana hurtado. this is "bloomberg." pants isgebob square what the super bowl has come down to the. pick it up on brexit. nejra: i get it. urged theresa may to roll out a no deal brexit. come asrk's comments nissan said it will not build and its u.k. plant. reporting the ministers are considering with drawing a 60 million pound

support package for the japanese carmaker. kapteyn andrend david riley. when i look at pound volatility, supply volatility has been falling. our the markets mocking them's -- walking themselves into an issue? there is an issue. what is being priced is the u.k. will not crash out of the european union on the 29th of march without an agreement, without a deal and a transition. i think the market is pricing low probability of that occurring. it is assuming there will be some form of article 50 extension and eventually, something like theresa may's

current deal. i think there is a danger rather where anreferendum opinion poll showed it to be a close outcome, where the market opted for the one they preferred to happen and priced in a chance the e.u. would vote to remain in. it is hard to trade sterling at this point in time. is also hard for the bank of england to know where to go from here. no change expected to rates but in terms of the messaging, should the bank give hawkish messaging a stone wage growth which is at his best -- messaging regarding wage growth which is at its best? arend: then we are seeing that wage pressure and we will start to see them resume hiking.

if they get another outcome and we do not get the withdrawal agreement or they get something worse, they are in wait and see mode. focus willion is the be on the contingency planning, what do we do if you get a bad outcome. today, airish story nice summary of the limitations dublin has. message?ublin's what will it do to the irish economy if we get a no deal or something like a no deal? our calculations on ireland are similar to what it does to the u.k. ireland is affected by having such close trade ties. they are trapped and hoping the rest of the e.u. does not throw them under a bus. tom: do you believe that? what kind of bus is it, is it a

london bus or a dublin bus? arend: for now, it looks like the e.u. 27 is hanging together and sticking to the backstop arrangement. no one knows. it requires one sentence to change and you are under the bus. tom: this is brilliant but this is important. who is the leadership of ireland speaking to? brussels? do they have to go to tokyo and say step in here and make europe europe. arend: germany is the one country that has sounded as if they want to be flexible. havef the other countries toed the line and said, the nonnegotiable. in some of the speeches that merkel has given in germany, she suggested that both sides should

come to compromise. ist suggests that if there one country that is willing to move, it is germany. if i were in dublin, i would be speaking mostly to the germans to make sure that line does not shift. nejra: to bring the conversation to europe, when we look to the ecb and what we might hear, does this make you overweight european banks in terms of credit? banks,i do like european for europeantlook bank equity and earnings is not that great given the overall macroeconomic outlook. have -- thehey underlying fundamentals continue to improve. the ecb is going to provide additional liquidity for banks.

providing dovish policy support to the euro area and tying it into that forward guidance around rates and that will ease the potential refinancing that banks will be going into billion next year. the kinds of yields you're getting from european bank champions, it is a good place to go and the ecb will provide support going forward. nejra: great to have you. rileykapteyn and david staying with us. coming up, invesco chief global market strategist will join bloomberg at 10:00 a.m. new york time. this is "bloomberg." ♪

nejra: i am nejra cehic and london with tom keene in new york. world leaders have recognized juan guaido as interim president as he calls for a transparent relationship with china. he is promising that any agreement made with the regime of nicolas maduro would be honored as long as they were done lawfully. joining us now is bloomberg's executive editor for international government. great to have you with us. is it that we are

going to get the support from china were guaido? ros: they have been supporters of prior regimes. lot of money,a but a lot of oil and have a lot at stake. they have been careful in their comments to date about murder during -- about maduro. they pointed out they did attend his inauguration but they have not said they support him and his administration. what we are is an indication to how heth guaido and see would feel about ongoing chinese investments in the country if he does take power and the country enters a reconstruction phase. you need money and deep pockets for projects. nejra: was bluebay one of the firms that made money out of venezuela?

we have seen a recent gain in bonds. have you benefited at all from that? some of the dedicated emerging-market hedge fund strategies, there was a position taken in venezuelan sovereign because of the gains that would accrue from a regime change. that is what the market has been trying to change in, -- pricing, what is the likelihood. that would lead to a restructuring of the economy, new investments, a release of sanctions from the united states. we are cautious on venezuela and that is true within our strategies but where we have opportunities to have -- to be tactical, we have been. is an think there

important article that goes to the heart of this matter away from what the fancy people are doing. in caracas, on the slums. , are do the slums stand they supportive of maduro or are they like germany, france, tilting to the new guy? ros: there have been protests and they are ongoing. this is a large group of people who have been suffering for years from power outages, skyhigh prices for basic goods. they have been frustrated with the regime and what they have received. hold onhas been his things like the military, the courts, and other institutions. maduro has been quiet through all of this. he is not throwing a match into things by trying to arrest

guaido. the pressure is on the opposition to keep things going. he has been quiet. have aes guaido resonance with the poor in venezuela and those in colombia wanting to go home? does he have a theology or are they looking for something new beyond maduro? ros: he does. we have seen opposition leaders only for that aligns to collapse. they have struggled on many occasions. he is different, young, charismatic, carrying a message of change and being per magnet -- being pragmatic about the challenges venezuela faces. he does resonate with people. what is his vision if he does get in power because that is when the hard work would start. nejra: let me bring you in.

to 2019, you ahead talk about a going from bad to worse, does that include emerging markets? arend: it has gone to worse. we hope it gets better. because the trade cycle is behind a slowdown, that is affecting a lot of open economies, many of which are in emerging markets. it is starting to get better. china is a separate story. one reason it is going to get better is that commodity prices have stabilized. ofn you look at the fading facts of commodity prices having you getn, by the time to the second quarter, you see global trade bottoming. nejra: you put commodity prices as a big reason to why it is going to get better but china is separate. does that mean the effect of the stimulus we have seen will not

be enough? arend: the slowdown in china has nothing to do with global trade. it is self-induced because of the crackdown on shadow blank -- bank lending. on top of that you have the tariffs, which is unique to china. a lot of fiscal stimulus is being unleashed. it has taken a long time for that to show up. where you would expect to see it is in the credit data because it is the credit sector that finances the government and we are not seeing it yet. we are going to get a soft landing in china. our trajectory is different than what is happening outside of china. will make an effort to get out on twitter this superb ,tory in the caracas slums maduro is despised. thank you for joining us.

we are going to continue on the u.s. economy, u.s. politics, the brookings institute before the state of the union. this is bloomberg. ♪

viviana: this is bloomberg surveillance. i'm viviana hurtado. over a slow boris got more intense, publishing its formal takeover offer. moments after your next underscored its determination to buy the main exchange. your neck obtained the backing up more than half of shareholders. china's top movie picketing platform struggled in his debut. it is backed by tencent. bloomberg speaking to the ceo about the plans. intoom the business sports, advertising, e-commerce. that is not enough. expand our to business vertically along the value chain. not many companies can do that. corn lobby turned

up thumbs down on one of the super bowl commercials. it does not use corn syrup while rivals do. growersonal corn association tweeted american corn farmers are disappointed and would love to discuss the many benefits of corn. that is your business flash. tom has an opinion on this. tom: the horses going through the field. that worked. the best was the game of thrones ad. there is the bud light guy. this core and ad is like, what do think they spend on that. viviana: i can tell you. just over $5 million. tom: game of thrones comes to bud light and they go after the corn industry. corn in not worry about

king's landing. let's do a february reset. it is february, the smartest thing i heard was from my colleague who said we are not going to have a clue what to do until march. it is so unstable after that december that you are waiting until february or march? david: i do think a lot has hasened and the fed reset been crucial. you are right that march is key because the market has priced in weakness out of china for the first quarter. what the market is looking for is ongoing policy easing from beijing. that should start feeding through to the data in the second quarter. the market has priced nothing from the ecb until its march

meeting and then the focus will be on their forward guidance on things like bank financing. in march will be interesting and crucial in terms of the relationship between the u.s. and china in terms of trade. the story you have been running, intellectual property and forced technology transfer, you have got that in the background which is heating up. the market is hoping we will get some kind of truce in terms of terror's. if we do not, -- in terms of tariffs. if we do not, keep on grinding. nejra: could the emerging-market trade turned around by march? why such a high conviction in em? in terms of the emerging markets, we have a situation where investor positioning is light at the moment.

into theot had inflows asset class that characterized last year. 2018 was characterized by people with money getting out. is,erms of where the fed where valuations are with respect to emerging markets, we are set up for the emerging-market rally to continue into march and beyond. then, you start getting global factors like china, like trade relationships whether the fed comes back into play. that is a story for q2. term, you have to be invested in emerging markets. nejra: could we be less gloomy come to two? arend: the one thing we worry about is that february 17 is the deadline to conclude the investigation on car tariffs. i would be shocked effect

concluded saying everything is fine. while the music now is good in terms of progress on the u.s.-china relationship, we are not sure what is going to happen on the u.s.-european relationship. tom: this has been wonderful. we will get to march fast. thank you so much for the ubs markdown on global economy. david riley as well. we appreciate it. coming up, a lot to talk about. michelle meyer will be with us, bank of america. we will talk to her about housing, on the spongebob squarepants appearance at the super bowl. super bowl.

tom: this morning, where did january go? it is time for february.

bear markets from to correction, nearing record highs. february, in like a lamb, we do that in march. brexit marches on. the irish backstop is key, no word on when the prime minister goes to brussels. -21, the experts get the super bowl wrong. brady on top. apologies to george carlin, here is a partial score, maroon 5. bloomberg surveillance live from new york, and i'm tom keene. nejra cehic is in for francine lacqua. francine watched the entire game, she emailed me. the rams could not move the ball. she said i cannot come in tomorrow. nejra: i wish i could have watched the game. sleep butve got zero

i was fascinated by the discussion about the halftime performances, with stars pulling out. how was the halftime? , wherere in my yeaear where his aerosmith, where was tom petty, i would have taken bruno mars. here is viviana hurtado. trump ispresident standing by his plans to reduce the u.s. footprint in the middle east. he tells cbs news he intends to maintain a presence in iran. he says he would ignore the advice of his intelligence officials on iran if there views ran counter to his. a report today sheds it on allegations that tech giant huawei has been trying to steal

trade secrets. erik schatzker following an investigation into its dealings with a chicago area starter. the company of trying to steal the glass he invented. >> they wanted to work with us on product negotiation. would have been in contention. they we wanted to let them know we are willing to work with the company within the limits of the law. if they steal technology, there will be recourse. the latestssan doubt blow to theresa may enter brexit deal. scrapping plans to build a new model in the u k fighting doubts about the splits .bout the she is expected to return to brussels to's see changes. the new england patriots coming out on top in the lowest scoring super bowl ever. they beat the rams 13-3. only one touchdown was scored in and the game was tied going into

the final quarter, tom brady the oldest quarterback ever to win the super bowl. ii is his sixth win in the big game. for those of you who thought it was too slow, tom keene likes that. this was before your time. thank you so much. lots to talk about, let's do a data check. we will get through this quickly. futures up three, the curve steepening. same old thing. the vix showing a good equity market. sterling 130,000, .56. nejra: the dollar starts off february on the front foot. a little bit of weakness in european equities. emerging-market equities snapping gains.

we did have a rally. 8.ent crude 63.0 cirilli, the new york post getting it done. this guy has almost as many tattoos, the maroon 5 guy going naked. the final insult, patriots win. it is remarkable the career that mr. brady has had. kevin: it is like you are trying to get me in trouble. , i am transparent about it. congrats i guess. , they were never underdogs. tom: how much trouble will be president get in with his state of the union tomorrow night? kevin: i was talking with

officials on friday about the tone they are going to try to put out. according to the white house, they are going to be uplifting, they are going to try to put out a vision for the country that is positive. they are also going to talk about the wall. what i am gathering is that they are going to tell democrats you can either work with us or not. it is going to be one or the other and you cannot say you're going to interview us under oath with lawyers and say you want to make a deal. turn now, we spoke with margaret brennan of cbs. here she is with the president on speaker pelosi. >> she is costing the country billions of dollars because what is happening is when you have a

border and you have drugs pouring in and you have people over the country because of people like nancy pelosi who do not want to give proper border security, she is doing a disservice to our country. president after the that there is only one topic. is it a one topic state of the union? kevin: you are going to her about immigration, the wall, form policy, the decision to from the middle east as well as that decision to get out of the treaty with onsia and trade policy and the issue of china in particular. my sources feel that is one of the unifying themes that they can come together. tom: thank you. greatly appreciate it, particularly the brady analysis.

michelle meyer did not watch the super bowl. she was piecing together the american economy. about the great state of the union is it brings in any president who wants to do a victory lap. can the president look forward to a victory lap economy in 2019? michelle: it is about the messaging. even though we are having a moderation in growth, the economy is progressing. the labor market is strong. some statistics, the unemployment rate, the job creation numbers, all of those are good metrics that he can talk to. nejra: good to speak to you. was this labor report almost perfect in terms of supporting butviews on a good economy

that wage number pointed to a fact that the fed should be pausing now. michelle: the job numbers were strong. i think the report was strong, even the wage numbers. the month over month numbers slowed. last month was revised up. at the trend, it is showing a tighter labor market, wages are creeping higher and that is going to continue. what does that mean for the fed? butfed took a dovish pivot they did so because they were concerned about what was happening at the end of last year. they were getting signals the economy was weakening. they had risks from the global economy. i see this as more of a pause, they are going to wait. if the data continues strong, they are going to have to start talking hiking again. tom: interesting february to say the least.

onto march. meyer, your many emails we must speak on housing. we must speak on the state of the union. -- leadingn leave it our coverage. 8:30 tomorrow night. this is "bloomberg." ♪

viviana: let's get the business flash. management chain is on the way at ryanair. michael o'leary will look to the newly created role of group ceo. the chairman will stand down next year. ryanair is having a tough year, a series of strikes forced it to

recognize unions, then there is brexit. the cfo warns a hard brexit could have an impact on british shareholders. >> in the event of a hard brexit, our non-e.u. shareholders, the u.k. will be a part of that, will not have voting rights for a period of time and will be forced to sell down to e.u. nationals. viviana: julius baer will make even deeper cost cuts, lowering its financial targets, shaving $22 billion off of assets last year. the ceo saw at least one bright spot. >> we had a fantastic first half. it was more difficult for the whole market overall. we lost in all assets on the management through the market developments, the weak equity markets. i am proud with the money figures, $17 billion is the

second highest number we had ever in the history. viviana: shares of sony fell the most in about 3.5 years. the electronic maker reported weaker profits in the playstation business. sony also reduced its annual revenue forecast. goldman sachs and nomura are among those who cut their price targets on the company. that is the business flash. tom: thanks. what do i get the most mail on? that would be on the fed and the job economy. let's bring up a chart. i through this out on twitter last week. employed,compared to a normal trend over 20-25 years. we get an ugly financial crisis and we get an improvement which is out 4 standard deviations.

on the american labor economy, nobody buys the idea we are probably employed. michelle: it is a tight labor market. -- we are fully employed. michelle: it is a tight labor market. you can look at job openings, we are running at high levels. looking at the unemployment rate, we are below what most people consider to be full employment. the trend, the three-month moving average. tom: the moving average is elegant, they are sitting on each other. if the market is so good, you assume the fed will raise rates. what is the ramification if the fed goes up another notch? michelle: i think the fed is going to be careful in terms of how they do it. i do not think they are going to quickly change course and shock the markets.

it will be gradual. data dependent and if the data continue to show a strong economy, where pressure start to build up on the price right, it is justified. provided that risks mitigate and financial conditions are accommodative. nejra: i talk to people who think that the next move could be a cut. if you're looking at the data and using think the next move could be a hike, what would you and the fed need to see in the data? wage growth? michelle: it is not what you need to see, it is what you do not need to see. what the fed is worried about is a slowdown. that theorried challenges are going to feed into the economy. they want to make sure that is not happening and they are worried enough about that that

they have said let's assess, let's see how the u.s. economy can fare through these challenges and if we get to the middle of the year and the recovery is ongoing and some of , it doesk factors wane set up for a rate hike and the markets can take it because they will have gone and passed some of those risks. it is not the right time to come out hawkish. it is the right time to be supportive and let the recovery continue. nejra: is the u.s. consumer strong enough to offset the risks from the rest of the world? michelle: a lot rests on the shoulders of the u.s. consumers. i think it will be able to see continued consumer spending which will provide hope for the economy. rising, but they are

rising and they are more broad-based wage growth. the labor market is strong in terms of the perception around the ability to find a job. even with the stock market correction, it has come back. consumer confidence, we want to monitor that. tom: this is important. bank of america is the heritage of nailing the economic slowdown we had. what i would notice is real rates are a fiction compared to what is coming out of your mouth. what you're saying has nothing to do with the real rate structure. where our normal real rates? michelle: maybe it is optimistic relative to what is priced in. i would not call it overly bullish on the economy. it is still growth returning to 2%, just above trend. it is not a recession.

as long as you are saying it is not a recession, that seems to be positive. that is the story that starts to change in markets. tom: i have got to see real rates adjust and we are not there yet. optimism in this morning. we will continue and dive into the housing market. coming up, his expertise is managing the presidents message. there are a lot of different messages including from david malpass. kevin hassett, noon. this is "bloomberg." ♪

nejra: i am nejra cehic in london with tom keene in new york. bloomberg businessweek has a report today that sheds new light on huawei. the allegations that huawei has been trying to steal u.s. trade secrets. erik schatzker followed an fbi investigation into a chicago akhan semiconductor bank. . eric joins us from new york. tell us what you learned. >> the fascinating aspect of this report i have assembled was

the opportunity to witness a sting operation unfold at the venetian casino in las vegas. the fbi took a sincere interest in the allegations that huawei was trying to steal this y's technology. this company has come close to perfecting a method for laying down a diamond on glass and it would transform the smartphone industry. this could replace gorilla glass and this could usher in a generation of faster, smaller, thinner, stronger consumer electronics. that is what is at stake. when this company discovered that huawei was trying to hack the trade secrets that enable reportednology, they it to the fbi and the fed started this investigation. it being this about

after more than just smartphone technology? there are some people who do wonder are the chinese trying to steal trade secrets, is it about commercial espionage or something more nefarious. it is a valid question and i would like you to hear the ceo speculating to what he thinks huawei was after. scenario, wecase have been discussing some of the work we are doing on the defense side. it could put them in the right direction of what to optimize and that is the worst case from a weapon standpoint. g tohe best case, somethin differentiate from samsung, giving them that advantage. is one of those

options, neither of them is good. corporate apps to be in a rush -- corporate espionage means it would be getting its hands on a competitive technology. military espionage means this could be put to use in something that could be used against american interests. comment, thehas no eastern district of new york has no comment. does huawei have a common? get: i tried repeatedly to huawei tom: to respond. they didn't. -- huawei to respond. tom: they didn't. eric: no, they didn't. tom: is that the stands? were you eating a gelato? eric: i was on the job. tom: what does he want out of

this besides the copyright ownership of his glass? to make sure the chinese are not getting their hands on his te technology. they are trying to build a business. if they succeed in reverse engineering the diamond technology, they do not have a business. tom: does apple want this? eric: this is something they are exporting with all of the major smartphone manufacturers in the world. tom: gelato stand. on thehis out on twitter reality of corporate copyright in america. ♪

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: bloomberg surveillance. nejra cehic in for francine lacqua, exhausted by watching the snoozerbowl.

here is viviana hurtado. viviana: governor ralph north a meeting with senior staff members amid a controversy over a racist photo. he is rejecting calls from fellow democrats to resign. he says it is not him in the picture. the trump administration is sending 37 hundred more troops to the southwest border with mexico. 600 troops are there. they will provide support to customs and border. soldiers will lay wire on the border. bowingnt nicolas maduro to resist u.s. intervention. present from signaling he is confident a transition to power is underway. he says the use of force in venezuela remains an option. his armed forces and militias are preparing for an invasion. jerome powell is coming around to raising interest rates.

saying powell is excepting the idea that wages and inflation should rise again before boosting rates. kashkari calls the u.s. economy fundamentally healthy. global news 24 hours a day and at tic toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm viviana hurtado. this is "bloomberg." i like that you did that. we need to do a victory lap for mr. kashkari. guess what? he has been more right than gauging dovish and hawkish. we gauge the state of the union, a perfect guest. the goal of the president is the politics, turn around the vector of deteriorating polls. how does he do that? >> the president needs to think about what he talks about on a

regular basis or what he does not talk about that the public likes. the president has going for him and economy that is doing well. he needs to stop talking about immigration, his wall and he needs to start talking about things the americans give him credit for. tom: do you see him -- do see in the indication he can do that? there are two parts, the first is a victory lap in which the president runs down a list of things he has done successfully and then he moves on to policies he would like to see. the president needs to talk more about the economy than immigration. he is so committed to this issue and he is so committed to his base. say the president should address issues that americans care about, housing is one of the things that jumps to

the forefront. piece previewing what might come from the state of the union and it said it will not focus on housing. should he? john: housing is an important part of the american dream and it is an important part of the everyday economic decision-making that an american makes. presidents in general should talk about this issue. president trump should. we do not have a lot of insight into what the views on housing happen to be. it is hard to imagine they are going to become a part of his state of the union. nejra: would infrastructure be safe given it is seen as a rare spot of bipartisanship? john: infrastructure is important. it is an issue with bipartisan support. it is something he can talk about and have nancy pelosi

clapping for that issue. it is something that the american public wants and it is something he can win on and win with democrats on. speaker mentioned pelosi. fascinating this year is the response of the democrats to the state of the union. there are four or five people who give this response and they go to a woman who ended up at yale law. stacey abrams career path is remarkable. what does that signal to from biden to the gentlewoman from the bronx? john: stacey abrams is such an important choice, such a contrast with the president, not her tone woman, but and the way she talks about policies and politics is going to be an important way to

differentiate nachos democratic values from the president but democrat approach from the president. given the trouble that governor northam has been in virginia, up being ans ends ideal person. is liberal, what does progressive mean right now? is the democrats frame getting to the beginning of the primary season. how do you define liberal now? john: it is interesting. it depends on who you are talking to. liberal is no longer a dirty word. we have polling that suggests more americans than ever are self-described liberals. is somethings want that is more fair and promotes equality economically. those are the things that are allowing people to call themselves liberal end have a

party that is excepting them. -- and have a party that is accepting them. tom: david westin with our coverage on the state of the union. right now, michelle meyer with us. john said, it is about the economy. for the rest of america, it is rental housing. this is how you got famous. buy or rent? is itle: my response depends on the individual, on the regent. there are so many factors -- on the region. there are so many factors. it is still attractive to buy given mortgage rates are low. the equation is shifting. prices have increased relative to income growth. it is starting to become more challenging. tax season, what does bank

of america say that a lot of bloomberg people are paying more taxes because they lost their deduction? that is a profound effect? michelle: it is in the goes back to regional differences. when you look at what the tax reform did, it made it challenging for the more expensive housing markets because you do not have that property tax deduction. it means there will be downward pressure on prices, you will not have the same volumes. tom: are you seeing that? michelle: you are. westchester and in new york city and that is a function of tax changes. you can make a case on the more affordable housing side, tax cuts have been beneficial because people have more money. tom: westchester is a suburb of

new york where everyone has an ice rink in their backyard. nejra: i knew of it from the series friends. i want to take this more macro. when we talk about housing, we have got to bring long-term interest rates in. do you see much prospect of long-term interest rates rising? michelle: there is always risk. end are goingong to have her in this range, 270 -- however in this range, 270. part of it rests on what we see for inflation. if we are in the camp that inflation will edge up but we will not see a spike. that means it will be moderated and global forces in general are

suggesting more moderation. nejra: to sum it up, if you look ahead to u.s. growth, are we talking about above trend? michelle: on balance, we are talking about trend growth. into the second half of the year, the condition suggest more moderation because you have fading of fiscal stimulus. the economy is plugging along. this adjustment from almost 3% growth in 2018 which was not based off fundamentals to an economy just above trend and continue to slow down. tom: thank you so much. we will come back with michelle. this is important. got to go upmarket and become the chairman of papa john's, that is what jeffrey smith is doing over at star board.

have read the story, i have got to go to papa john's. becoming the chairman of papa john's. we will have more on that. this is something typical we see. he and star board value take a position in pepperoni with mushrooms to go. this is bloomberg. ♪

viviana: this is bloomberg surveillance. i'm viviana hurtado.

boorse gotver oslo more intense. its formalishing takeover offer. moments after euronext underscored its determination to buy the main exchange. euronext obtained the backing up more than half of oslo bours shareholders. china's top movie ticketing platform struggled in its debut. it is backed by tencent. bloomberg speaking to the ceo about the plans. >> from the movie business into sports, advertising, e-commerce. that is not enough. think about that. we are able to expand our business vertically along the value chain. not many companies can do that. viviana: the corn lobby turned a thumbs down on one of the super bowl commercials. the ad emphasizes that in heiser does notnheuser-busch

use corn syrup while rivals do. the national corn growers association tweeted american corn farmers are disappointed and would love to discuss the many benefits of corn. $5 million plus for a 32nd spot. that is your business flash. nejra: thank you. i have got headlines to bring you on the u.k. the first one coming from the u.k. government spokesman saying that the nissan investment is disappointing after nissan cited ongoing doubt about the uk's split from the e.u. the u.k. government response is that that is disappointing. other headlines is that the u.k. government is aiming to bring the brexit deal to parliament as soon as possible. it rules out calling a general election.

the government is working to mitigate disruption from a no deal brexit. a number of headlines coming through. theresa may is to visit northern ireland tuesday. that is ongoing and the discussion is interesting. we are hearing from the spokesman that theresa may spoke to the spanish prime minister on venezuela. the u.k. is considering sanctions on the government. that, france, spain, the u.k., and germany have recognized guaido. this as he calls for a transparent relationship with china. he is promising that any agreement made with the regime of nicolas maduro would be honored as long as they were done lawfully. joining us now is bloomberg's emerging markets editor and michelle meyer is with us as well.

great to have you with us. ,arches on both sides fascinating pictures to see. we have seen venezuelan bonds rally. is this a time when investors will be looking to take profits? >> it is the start of the long waiting' period for investors. the regime change is the easy part. change happens, the long road to restructuring begins and that is going to take a long time. it is going to be more complex than ukraine. bondholdersltiple and venezuela has been defaulting in 2017.

all that means is that it is going to be a process and for those willing to be patient for that long, this is an attractive place. $.30re getting the bond at $21. there is going to be a long waiting period. tom: there is g20. i was suggesting when you add in south america, there is g 50. who is the institution that will come to the rescue given that there is a 50 nation interest? sri: ultimately, the regime change has to happen from within. the people are with the opposition leader, guaido. maduro controls the courts and

military. and those supporting the opposition leader are not enough. russia and china are going to be players because they hold between them something like $60 billion of debt in venezuela. even if you look at the european union, the e.u. is not unanimous in welcoming the opposition. there is not going to be one institution or mechanism that is going to make this happen. it is going to be fractious and opinion is divided. the pressure from within venezuela has to make this happen. tom: what is the summary on what it means for the south american nations? what does it mean, this turnaround, for the adjacencies? sri: venezuela is a small part of the emerging markets

spectrum. for the wider asset classes, until,ll not be affected if things go south, it could affect sentiment. is playing a smart game. he does not want to antagonize china, russia. to benefit from u.s. support. he is playing a balancing game and if he continues to play well, he might succeed and that might be good for bond investors. tom: thank you so much. greatly appreciate it. we are going to continue with michelle meyer, lots to talk about, i will find a chart to dazzle her. coming up, katie nixon. futures, a nonstory this morning.

not much moving with a little bit of curve steepening. headlines.terling this is "bloomberg." ♪

tom: bloomberg surveillance, tom keene, nejra cehic in for francine lacqua, francine watching every minute of the super bowl and she called in this morning. michelle meyer, upper early with bank of america and a single best chart on our economics. she wants to talk about how it ties into confidence. down we go, correction, bear market, in december. we have bounced back. does that mean confidence has bounced back? michelle: it is a factor. we looked at the reasons behind moving consumer confidence and the biggest reason is the stock market. tom: it matters. michelle: and that is followed

by the unemployment rate and gasoline prices. the number one factor is the stock market. we should see confidence come back. about when people talk the fed becoming market dependent rather than data dependent, they are not missing a trick michelle:? -- a trick? michelle: it appears they are reacting to the data we have seen. they are thinking about how the market filters into the economy and a conduit for that is confidence. market corrections that start to weigh on economic activity. you have to wonder what the market is telling us. the fed wants time to see how it filters into the economy. relieved byey are how the stock market has rebounded. nejra: that rebound that tom has

shown, is that enough for the fed to start thinking about hiking again? michelle: i do not think they can flip back the other way. they came out with a dovish pivot. powell was unwilling to say the direction of the next move. i think for the time being, they are going to keep this -- talk, they are going to talk about patients. in the march meeting, they have to release a summary of rejections. by late spring, maybe we start to hear more talk about the possibility of hiking. tom: we have so much time to go. you are killing me. bring up the dots. you can only do that, he was on the sidelines falling asleep. the market is one million miles,

aren't they? michelle: and that is the challenge for the fed. in the last meeting, it was just powell commenting. in march, there will be dots. tom: should brady retire? come on. he looked tough last night. michelle: i do not think so. stay with it. keep going. tom: i hope he does not retire. kevin cirilli, thank you so much for joining us, he did not want to appear today as michelle meyer did. we will drive forward the conversation with jonathan ferro a bloomberg radio. this is "bloomberg." ♪ erg." ♪ i'm a veteran

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may not be a recession year. president trump prepares his speech to congress. we break down the areas of compromise and conflict. nissan ditches the u.k. , andompany scraps plans theresa may's plan b is too little, too late. david: the day after the super bowl, the lowest scoring history -- scoring in history. it was not that thrilling. alix: i went to bed early. did youas super into, know your beer contained corn syrup? there was an ad from a meetingusch where of a crew