francine: meeting soon, the white house says trump will get together with xi jinping two in the trade war. global stocks rise. capitol hill reaches a tentative deal on border security that would keep the government open. forecast in its first earning since these scandal. we are live. if you're watching from asia, looking to bloomberg surveillance. these are your markets. receive a little bit of a liftoff when it comes to

european stocks. his little bit of renewed optimism that we can reach a deal but -- deal between the u.s. and china. that 10.28elds percent. pound at 12845. frome three hours away that all-important speech from theresa may. it was rising before theresa may is updating lawmakers on progress in the brexit negotiations. of all talk to the present seem a lot at first we get to the first word news. kyl bassett sees a recession on the horizon. the founder of payment capital management says the fiscal stimulus will wane and the democrats won't let trump use the economy any further. activityk economic will wane in the back half of

2019 and by the middle of 2020, will most likely be in a recession. tomike pompeo has come close issuing an us or them ultimatum when it comes to huawei. is top american did matt making the pushback against the company a key theme of his trip to europe this weekend. lawmakers have criticize philip payment and the budget. could deliver a deal dividend for the economy at after he said they avoided no deal divorce, it should not be described in those terms. the finance ministers is crushing out without a deal should be the -- would be disastrous. >> in no deal brexit would be horrible for everybody. whether it's u.k. are europe itself, it something everybody dreads and nobody wants to go there. >> the u.s. said to be response toa joint

cyberattacks allegedly conducted by china packer. evidence last month of both software and hardware. was of the center of u.s. indictments in december. the issue can be discussed at a scheduled eu china summit in april. global news 24 hours a day on air and at tictoc on twitter. have a more than 2700 journalists and analysts in hundred 20 countries. this is bloomberg. markets rising this morning as the trump missed ration says the u.s. president was to meet with china's xi x inping, quote, very soon. you the biggest story moving the markets is negotiators have reached a tentative deal to avoid a new government shutdown. the agreement is to give the president farm -- far less money than he originally demanded. he wants as much as 5.7 billion. paso,ng at a rally in el

trump play down the expectations of a deal. i don't know what they mean. progress is being made significant. what did happen is the democrats are being hit really hard on the concept of releasing criminals into our society. that has not been playing well. so maybe progress has been made and maybe not. for more the stories were joined by her bloomberg team. the stephanie baker. what are expecting to come out of the talks this week? >> very importantly, the signal is from white house staff, president trump is still on for meeting the chinese president some phase. that's important sign. means he's giving support for some of the outcome. termsain in the dark in of what kind of a deal may be

agreed. our own colleagues in washington at theing both sides are very early stages of hammering out a common document. common ground that both sides will agree to. the signals are quite positive. a extensioning at to the trade truce in a couple weeks as opposed to an outright deal. is the agreement to of art the shutdown a done deal? >> it looks like it is. republicans have said that trump will support the deal the trump hasn't tweeted anything about it. he hasn't come out anything exquisitely. almost 1.4 billion, this is less than the 1.6 billion that senate democrats approved before the shutdown. billionless than the 25

that many senate democrats foroved of in exchange citizenship for young, on document immigrants. it does get trump away out to say i am building my wall and democrats can say, it's not really a wall comments offense. it comes down to semantics. whether or not trump will back it and declare state of emergency to get more funding for the wall remains unclear. >> think you for joining us. a storm of the biggest global risks and what investors should be looking out for. leader of ace milan football club. , thank you for coming on. get oil, it's moving on the back of a shutdown. but his oil the ultimate test

about whether there is growth or a recession? oil,: with these prices of around $60 more or less, oil would be a propellant for growth. because the price is relatively low there should be no reason why the economy should not profit on prices that are relatively low. i don't expect prices to go any higher this year. being, ther the time shale in america continue to pump more than ever. the agreement between russia and saudi arabia is holding. forprice of today is everybody, consumers and producers. francine: first oil prices were going to 200 and they're going to crash. is a different environment from when you are in charge? i don't know when it's to do with demand for coming from emerging markets but how much

can you explain this? paolo: the new thing for me compared to my times is the agreement between russia and saudi arabia. francine: unprecedented. paolo: unprecedented. the two biggest producers in the world excusing america stick together and decide what they should be following in terms of price of oil makes it big difference. volatility is relatively high but within a range of relatively small. for a long time prices are going when hundred $48 to $31. we've seen this kind of movement which was before unthinkable. francine: was the one question you get from chief executives was often? will there be economic fundamentals or politics? people investing less. paolo: in oil or in general? francine: paolo: in general. people are expecting the china

to be softer this year because the chinese economy is not performing as well as it used to perform. chinese economy is so large that it's unthinkable that such a large economy can grow 7% or 8%. we should be accepting a more normal rate of growth. year's india. india is performing very well. it's the new economic power that is growing. i'm fairly optimistic about this year. i'm not among those who think this year, the slowdown will be very strong. francine: tuc chief executives making deals and you think they dealslding back? paolo: continue to happen all of the world. big deals. consolidation in many industries is continuing. the only place or maybe there is a slowdown is the u.k. for the uncertainty around brexit. if there is no deal

brexit, and i don't think anybody may be apart from the prime and's or has the answer to that, what impact is it on the rest of europe? paolo: continental europeans believe it will be no impact. in my view, there really cannot believe that there'll be a no brexit. brexit, they're working on this scenario. in general, european economy, european politicians think. brexit will be either software postponed. we will have some time also speak about football or soccer as matt miller calls it area keep it here on bloomberg surveillance. we'll focus on italy as assets continue to rally on put a car optimism but is that optimism wanted?

we discuss that next, this is bloomberg. is bloomberg.

>> why do like italy? >> i had a very good experience there. all doors were open for a foreign investor coming from egypt. >> what kind of assets would you like to buy? >> they're going to privatize all the real estate. assets --real estate some of the best real estate assets in the world. francine: the egyptian billionaire giving his bullish view on italy.

the market has been rallying as they put a cloud look brightens for investors at the deputy premier and the regional lines pulled strongly. let's get back to the present of ac milan. as we are listening, you are reminded me that you are involved in that deal back in the day. what do investors misunderstand about italy right now? we have noise, we have been reworkthat they want to it for the italians because it couldn't the should be launch the treasury coffers. should that were investors? paolo: what should worry investors is the the china, is a fact. economy has been recession in the last quarters. i don't see the economy moving up in the next few months so this is a worry for foreign

investors and italian investors and for everyone. drama, it'sitaly all around the management of the bank ability -- bank of italy. the management has not been appointed by them but by a previous centerleft government. they hold these managers responsible for the banking crisis, in particular the two ignition banks. but it'sfficult to say not under attack the institution itself. will we see fresh elections with a government that actually gets rid of five-star? would that be a comfort to investors? paolo: the general view is that until the european elections at the end of may, nothing should happen. mr. serving a new one elections not sunday, continues to say

change, go ahead, nothing has changed. is thet is this election photograph of a new situation. it is doubling around 3334%. the prices halfing. it may be losing going down from 33 to maybe 23. strongter-right is a majority which gives them an eternity. in terms of election, we should always remove that it -- in italy, elections are called by the present of the republic, not the prime minister. what the president would do nobody knows. generally speaking they do not want to call elections. you worry about the recession? you have a law that might have to be revised because of economics. how do you fix italy right now? this isthe -- paolo:

the real worry situation. if the economy can use to go down, we have to make new magic. we took engagements towards brussels that if the growth the country would not be in excess of 1%, we should increase tba. a series of economic measures. francine: the strong words between france and italy hurt investment between the two countries? some investments. of and ring the for example in france, they pulled back from a potential alliance with an italian. the french companies are very strong in italy. very strong presence. i do not think this litigation between france and italy will go anywhere. when they finished, the two will be friends for the last saturday years and there's no reason why we should to a kind of obsolete

nationalistic fights. you think is just rhetoric for the moment? how do you explain it? view,re's been in my to makeere people want some title in the newspaper. no more than that. the support of the five-star, i understand the scandal is provocative for french politics. i also the talk to about football. elliott to go racing 16 months ago and promised to revamp the finances. where are we with that? on a: when you're sitting football team coming up to climb to mountains at the same time. the mountain of sports result because if you lose all the matches, you are going nowhere and the mountain of the economic result because with the financial fair play, you cannot put new money to buy players or

pay players. the two things have to go ahead of the same time. for the time being, the sporting is up. as in the fourth position so it can play next year. wefar as the economic front, have an issue around financial fair play that we inherited in the past. we are dealing right now we expect to start a solution in the next few months. there any appetite for people to come in with or outright by the club? francine: i don't think is there -- i don't think there's any appetite to sell in this condition. we have a new chief executive. a super expert in football. have milancting to growing and going back to where it should be. enter the sporting results at least. francine: francine: -- francine: thank you so much for joining us today, the president of a

similar and. up next, theresa may speaks of parliament today with fears of a hard brexit grow. he tells next, this is bloomberg. ♪

francine: this is bloomberg surveillance, i'm francine lacqua in london. the u.k. prime ministers back in

parliament today forward center she saw her brexit deal heavily defeated. she will address lawmakers as she seeks more time for renegotiation. she what to house of commons on the progress of talks. the you says that the need to find a solution and it's urgent. let's bring in our reporter. to find agoing solution, what is come from? it's not -- it's not renegotiating with the eu. she's trying to renegotiate with the eu. she went on friday. her brexit secretaries meeting yesterday. is goinghere progress to come from his with an parliament. francine: will she have the numbers? >> at the mont she doesn't so this week she's trying to ask them to give her more time. she's working on a proposal. she's trying to chip away. to vote of mps refused

for it weeks ago and if she can get those numbers down and make the number smaller of those who rebelled against her, it makes it harder for the rebels to rebel because they become one of the very few who are voting against the deal that will be to a no deal brexit. francine: is a no deal brexit more likely? the million-dollar question. nobody knows what the prime minister would actually do. as a few investing articles out of the last four hours tried into this -- inside the mind of theresa may. two years ago she said i wouldn't take the country off a cliff like that but now people aren't so sure she will he would jump. francine: when do we find out? >> we have a vote coming up at the end of this month. she's meeting. the mission eu council meeting in mid-march. it could be as late as that that she decides whether or not she's going to extend article 50 which is essentially delay and brexit. that's were lots of people think is inevitable now.

if she can't get anything through by the end of next month, she will have to delay article 50 by two or three months and then basically where are in a holding pattern where we are trying to get something done. francine: thank you so much. report fore nissan fiscal earnings after the leaders of arrest. life in the carmakers headquarters in japan and plenty more on that. our reporter will be reporting from there all day. that's coming up next, this is bloomberg. ♪

♪ economics, finance, politics, i am francine lacqua in london. let's get straight to the first word news. kailey: the trump administration

says the u.s. president wants to meet with china's xi jinping as we fast approach the march 1 deadline for ramping up tariffs. kellyanne conway says he wants to meet with his chinese counterpart very soon. talks take place in beijing this week. negotiation is have reached a tentative deal to avoid a government shutdown. the deal is set to give the president far less than he demanded, $1.4 billion. trump says the shutdown was important to highlight the issue of the border. >> if we did not do that shutdown come up with would not have been able to show this country, these politicians, the world, what the hell is happening with the border. that was a very important thing. kailey: u.k. lawmakers have criticized philip hammond in a report. he said a divorce agreement

could deliver a "deal dividend" for the country. said the company is getting ready for all brexit outcomes. >> a few weeks of stock outside the u.k., so basically our stock ,hiskey, valentines, our gin which is produced in london. we are importing a few of our best-selling products in the u.k. like absolut vodka. kailey: the british government is being sued over its award of a ferry contract in the deal does in a no deal brexit. -- in a no deal brexit. the companies that run the channel tunnel accused the government of the secretive and fraud process. the government minister has been called to resign. 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 am kailey leinz. this is bloomberg. francine: thank you so much. nissan motor reported its first set of earnings since it's former chairman was arrested. and took $83 million charge forecasted earnings to fall to the lowest level in six years. joining us outside of nissan headquarters is stephen engle's. how bad are the results? stephen: they were pretty bad. missre expecting them to the consensus estimate from analysts, and they certainly did . they ratcheted down their fiscal year forecast to the lowest level in six years. this is on the aftermath of the carlos ghosn sag net -- sag us. --aga.a s

they are seeing slowing sales in china and the united states. unit sales in the united states in january fell 19%. he might need a lot more patience from top executives and investors as they go through a bit of a slump in the united states. they want to boost profitability and not necessarily rely on top line squeezing incentives they have been doing in the united states. against the backs drop -- backdrop of all of this is the carlos ghosn situation. they will take a ¥9 billion the renumeration of carlos ghosn. francine: where does this leave the alliance? get the we are going to

chairman of for no, -- renaud, the new chairman, will be in japan, the first face-to-face meeting with the ceo. it is very interesting. both sides have been talking about how the alliance is a great asset and they want to preserve it going forward, but it is clear, and i was in the press conference with them in the last couple of hours, and it is clear that he wants either more say for nissan in that alliance, which nissan feels is an inequitable partnership, or more independence for nissan, which contributes more sales and profits then renault. ,e danced around the question would they be welcoming a single individual as chairman of renaul

t and nissan. he was noncommittal and it is widely believed the sun does not prefer a single gentleman. we will see more information coming this week as they meet face-to-face thursday and friday. francine: thank you so much, stephen engle in japan. let's get to one of our other top stories. sees the u.s. entering a mild recession in the middle of next year. he spoke with bloomberg earlier about fed policy and his global outlook. asia andyou look at the subcomponents of chinese industrial components, four out of five of them are in negative territory. in dili -- italy entered a recession. germany looks like it will be in a recession in the next three to six months.

the u.s. has positive stimulus coming from the tax cut that we believe had a $250 billion impact last year and will have $400 billion total this year. the delta from last year to this thelus $150 billion and next is -250 billion. 2020, we are of most likely to be in a recession. given the conflict between the democrats and republicans in congress, my guess is the democrats will not let trump stimulate going into an election year. they are saying behind the scenes he has taken the economy hostage and they are going to let him shoot it. i expect the u.s. to be an mild recession by 2020. has powell gotten the message? saying they an f,

-- when they continue to hike. kyle: we have the worst december in stock market history. that dropped 16 points in a month. ,he month they took lehman down when the u.s. banks were insolvent and we were worried about aig, we lost more than 10% that month and were down more december.n look at what is happening in china and asia, southeast asia. look at what is happening in europe. the u.s. stimulated at full employment with our tax cuts, that stimulus is about to wear off. in the last three recessions, we have cut rates 500 basis points. weeks ago, san francisco put

out a paper on the benefits of negative interest rates. i hope that is not where we are going. this point of normalization should have happened long ago, not now. they were late in the cycle at raising rates and now they are stock. when we get into even a small recession, i do not think we have the arrows in the quiver. let's hope we learned something from japan and europe about negative interest rates. they destroy the banking sector and do not help the economy. 2020, interest rates could be a lot lower than they are today in the u.s. >> when it comes to u.s. stocks, is it more likely we will get a revisiting of the september highs or december lows first? -- the markets will rejoice to the fact that we get

a to quarter win on a trade deal. by the end of this year, the u.s. market will be lower than it is today. francine: that was kyle bass at hayman capital management. reportsods maker carry -- scherzer falling. this is bloomberg -- shares are falling. this is bloomberg. ♪

♪ this is bloomberg "surveillance." let's get to the bloomberg business flash with kailey leinz. taken an 83an has now in dollar related to the pay

of carlos ghosn. the amount could change depending on how the investigation proceeds. japan's third-largest automaker is trying to get past the scandal but it earnings are overshadowed by problems with h french partner. results last week may provide some brief expense. the company grow at the past is -- fest pace since 2012. the ceo is open to talking with investors. >> i am open to dialogue, including with elliott. we have had active dialogue over the last few months, it but governance is something that has been improving and will keep on improving. governance improvement is an less process, to be fair -- endless process, to be fair.

governments will keep evolving. kailey: reddit users are not happy with one new investor. tencent invested $300 million. reddit to depict images banned by sensors in beijing. the site has an outgo -- outspoken and sometimes controversial community. activism blizzard sank to the lowest in two years, tumbling over 50% since october. they are planning layoffs that could number in the 100s as part of a restructuring to increase profitability. they will report today. itsis said to have cut forecast for investment bankers in asia after a storm of equity offers last month hurt fees.

they have been reduced 8% with managing directors hit the hardest. executives ofior their pay rise 6% last year. the last kering is major goods maker to report 2018 earnings and its numbers are unusually strong. another signal that chinese appetite for luxury remains healthy. fourth-quarter sales at gucci rose 20% on an organic basis, shares slightly higher after trading down 3%. kering is them later of the u.s. consumer goods team. it was surprising to me, because gucci did so much better than expected but shares were down. there was an initial drop in the shares that have regained

a little bit of their ground. some investors were expecting a hadle bit more after lvmh such a blowout period. people have gotten's desk gotten used to really strong earnings and sales growth from this brand . their china performance is good but people have gotten used even better than this, so there was a bit of a letdown. the shares have regained some of that ground. francine: what do these earnings and loadsowns gucci, of high-end luxury products -- what does it tell us about the larger industry? eric: the higher end luxury market is strong. there were concerns about slowing iphone sales in china, but it seems like from watches to gucci shoes or bags, people are still willing to splash out on that, even if they are not

spending on iphones or cars. francine: thank you so much. let's talk about the intersection of tech and retail. spent 20guest has years in the industry as an entrepreneur and a venture capitalist. they have taken online positions and far-fetched and food delivery. "surveillance." we had some pretty difficult figures for apple out of china. how do you do with that market? -- edmund: it has done very well thanks to the repositioning of gucci, to attract a millennial customer and chinese customer. at the intersection is the

chinese millennial customer who is drawn to that brand. we see that through the research . that is a customer driving a lot of market demand and that brand is at the top of the pyramid. it is quite remarkable by any standards. what is in fashion becomes out of fashion and we do not tend to see this looking at that point. francine: how do we used a relevant? there are waves. frederic: to stay relevant, the strategy that lvmh has been carrying is smart, to build a time, ao so that any the one.brand could be with gucci, probably the hottest band coming the -- brand coming

behind. francine: is it the trade director or marketing strategies? frederic: you see brands combined both. brand.invented to gucci others are left promoting the designer versus the styles. consumers are hard to predict. francine: talk to me a little bit about felix capital, when youlook at the portfolios, are going into one or two more areas, men's health and e scooters. frederic: that is a breath of interest. we are interested in how technology changes the way we live. we have talked about fashion, the media, food. if we take mobility as an example, we have seen the rise

of uber transforming from a nap in san francisco -- from an app in san francisco to something globally. now we have the electric scooter category. there is less pollution, less traffic, and that might become a key tool in the cad toolbox. -- city toolbox. francine: do you look at companies that hedge each other naturally or are you waiting for the company that becomes huge? frederic: we are not looking for hedges. we are looking for a composite that might become very large. like the wellness men's brand we backed and we have a software brand. we will be bidding possibly around those things. we want to find the company that

might be adopted by the most people in the platforms have to be the best. isncine: the ideal scenario that it gets bought out by someone bigger or is that something you would not want? ,rederic: yves saint laurent eyeing the public voice. -- im the public voice. wants to remain independent. we are happy to support administrators. francine: do you have anything else coming up? you have men's health, e scooters, health. is there something you do not have that you want? frederic: wellness generally we are interested in. we started with men's wellness. there is a beauty segment that is trans formed -- transformed the younger customers. francine: thank you so much for

coming on, the managing partner at felix capital. later today we speak to david herro, ceo ed harris associates. do not miss that at 1:00 p.m. this is bloomberg. ♪

♪ economics, finance, and politics, this is bloomberg "surveillance." markets rising on trade optimism in the hopes of averting a government shutdown. let's take a look at the stocks to watch. annmarie: we have to start with the stoxx 500. this is the online trading platform for investors. 2019 profits will be marginally we travel to the

downside, down 4%, seasonal earnings had a loss that doubled. this is due to the hot weather in the u.k. that cap travelers at home -- kept travelers at home. brexit has been weighing on their plus -- profitability and the devaluation to the pound. michelin has been rising all morning and we are also seeing per rally up as they say they will boost profits. for the tires that need to be replaced, that will offset the expected demand. a bit of a mixed picture but lots of good individual stories. francine: we were just talking .o eric pfanner about kering this is the owner of gucci, up from 28%, sales to clear high bar set by lvmh.

a conglomerate when it comes to luxury and gucci owned by kering , impressive growth at 28% at analysts are disappointed. now they are up 3% so maybe they are seeing something else. "surveillance" continues in the next hour. we will speak to the iea executive director and the democratic congressman for new york. that interview at 5:00 p.m. london time. this is bloomberg. ♪

♪ francine: meeting soon, while the white house says trump wants

to get together with xi jinping to end the globe -- trade war, stocks rise. tentativell reaches a deal on border security to keep the government open. nissan cuts its forecast in its first earnings since the scandal erupted. good morning, everyone. this is bloomberg "surveillance." francine lacqua in london, tom keene in new york. we are expecting theresa may to speak in about two and a half hours and waiting to see whether she can get a majority. tom: you wonder if she will jumpstart the debate forward. i do not even know where we are out to. give me a date, a benchmark. francine: i do not have one. march 29 is the endgame. we think there is a vote around for board 24th. your shut in the u.s. has been afforded. -- averted. tom: at least for the next 20

minutes. francine: let's get to the bloomberg first word news. kailey: congressional negotiators have reached a tentative deal to avoid a government shutdown. giver security is said to the president far less money billion.emanded, $1.4 he sought as much as $5.7 billion. trump says the shutdown was important. >> if we did not do that shutdown, we would not have been able to show this country, these politicians, and the world, what the hell is happening with the border. that was very important. kailey: the trump administration says the u.s. president wants to meet with china's xi jinping as we quickly approach them are's deadline for ramping up tariffs. -- march 1 deadline for ramping up tariffs. the latest round of talks takes place in beijing this week.

u.k. lawmakers have criticized philip hammond on the autumn budget. he claimed that a voice could deliver a "deal dividend" for dealountry, but a no divorce should not be described in those terms. theresa may will address the house of commons today. 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 am kailey leinz. this is bloomberg. tom: thank you so much. equities, bonds, currencies, commodities, very equity based in dollar-based. euro, 112.73, down on support. new euro weakness. the vix 15.18. euro.n like the

index, 97.09, says it all. francine: this is what i am looking at. you are half-asleep. you never sleep. i am looking at pound, which is quite significant when you look at what we expect from theresa may. overall, the stocks are up and bonds are slipping. they're looking at the end of the shutdown and markets are showing a little bit of relief. if president trump wants this, we may get something and european stocks are gaining some 0.6%. looking at the renminbi talk, 6.7837. tom: decade-long weakness on the euro, irrefutable, down we go. it is cyclical. we are here with some support at 112. down below is the parity.

parity break through 1.00? we are nowhere near that, but there is a 10 year trend of euro weakness. francine: i like that. i am looking at chinese bonds because my question of the day is one will china defaults cause contagion? hillary clark put this chart up for me or she chose data from china bond. the yield spread minus raided notes, more than twice the level of a year earlier. it is a good way of seeing how much default angst there is in china. tom: we could talk about the united states and all the knock on effects with china as well. stephanie baker is our bloomberg senior writer and in the current karen -- curren

joins us. any ability to gain the shutdown or is the president the determinant factor? stephanie: he definitely is, and has been silent on the compromise deal they reached late yesterday. as we now, he can flip and change his mind at the last minute. republicans think he will back it. newscastery, the fox , has called it a garbage compromise. we know how that can get trump worked up. .o one wants a shutdown it was a political loser for trump. it is hard to see this deal as anything but a loss for trump. it is worse than the deal he could've gotten before the shutdown and worse than the $25 billion senate democrats were willing to give him in exchange for a path to citizenship for young undocumented immigrants. -- do weme go to you

see a president who in any way wants to engage in this arcane art of negotiation? i have not observed it yet. do you see it on the washington things that you look like? does this president want to negotiate? hashanie: i think he obviously sold himself is a great negotiator, at least in terms of washington politics. i think you misread the situation. he should have gone for a deal last year on the wall, instead he waited until democrats took control. that was a fatal miscalculation. he does not know the inside the beltway politics well enough to negotiate a deal. enda way in on the china talks. francine: will president trump meet president xi?

enda: the signal is they plan to meet soon. the mating is offered at the request of president xi himself, -- the meeting is offered at the request of president xi himself. time, then it's to be a degree of caution and all this. the trade dispute is much more than the goods deficit and cover structural issues that will not be covered overnight. in washington they are reporting that both sides are in the early stages of drafting a compromised document they can sign. the mood is good but we have a while to go before a conclusive trade deal. francine: do we have insight into whether president trump once a quick fix or whether he thinks this is the right time to get real concessions that will help the u.s. longer-term? isa: the march 1 deadline

what obviously everyone is looking towards. there is a feeling among all we wills watching this, get the full scale deal that president talks about in his tweets. allowing u.s. companies to roll more freely in china, allowing them to protect our technology and not have equity caps and the rest of it. it is probably stretching things. perhaps, there may be an initial deal and then we move beyond the march 1 deadline with an extended truce for a longer framework to negotiate water issues. -- broader issues. there always is the risk that it falls apart. francine: going back to the shutdown, can the president get behind this if he decides he is ok with this and does not call

for an emergency status? can he defend it and saying -- in saying he got what he wanted? stephanie: i think he will try to end it will get down to the issue of semantics. he will call it a wall and the democrats will say, we agreed to border fencing. both will try to sell it as a win to their base. this is much less than he campaigned on and is a fraction of the wall he promised. mexico is not paying for it. he is open to attack on this. tom: stephanie baker, thank you so much. curran as well. an important conversation with robert menendez in the 2:00 hour of newbob menendez jersey on the new democratic party. this is bloomberg. ♪

kailey: this is bloomberg "surveillance." nissan came up short in its first earnings report since the arrest of the former chairman. in a desk earnings missed estimates and they cut their forecast. they took an $83 million charge related to carlos ghosn's compensation. users are notdit happy with a new investor, tencent. they depicted imagery band by sensors in beijing. they have an outspoken and sometimes controversial

community and has long been banned in china. ubs cut its bonus pool for investment bankers in asia after a slump and equity offerings third-quarter. the pool has been reduced about a percent with managing directors hardest hit. this is a reversal from last year when they saw bonuses rise 6%. that is the bloomberg business flash. tom: i want to show a chart which folds into equities, commodities, and bonds. this surprised me. this is u.s. trade weighted real broad dollar. strong dollar up one standard deviation over the 50 year chart. the plaza accord on the left-hand side. it is a strong dollar, which is a good entry point on equities with edmund shing, and maryland watson joins us today.

watson joins us today. to begin with euro and this one do onr, what do you currency as you try to find coupon in europe? you are a european investor, it is important to be aware of the hedging costs. if you are looking for chief funds, wesee -- key see opportunities in euro credit and also elsewhere in asia, and in dollar denominated assets. it is important to be aware of the hedging costs, because it is about 3% which is a lot. it is important to be aware when you are looking at that coupon, what the investor gets back. tom: maybe you do not have hedging costs and equities but you have the currency translation.

u.s.well that due to the multinationals? edmund: he cannot say it is too small because on the s&p index, 40% earnings are overseas. clearly it has had an impact, navy not as much as currency does in asia or the u.s., but an impact. the real issue not be the currency by itself. it will be where the currency goes. it will be much more about the debt mountain the u.s. has to deal with in the coming years, what does that do to the currency? that is more of an issue in terms of stability. francine: what does that do to the currency? .dmund: it makes it go down the dollar is way high and everyone is been bullish dollar. we are pretty bearish because we think eventually the debt mountain comes to bear. someone will buy this u.s. debt. they are running massive but --

budget deficits. it is only going to get worse. a think everyone is going to buy their debt. they need people to buy their debt. someone has to buy it. not the russians, not the chinese. the domestic u.s. investor? let's see. francine: where do you see dollar going? marilyn: we also see it appreciating. it is very strong. there was a bit of a pause after jay powell was suggesting they might be pausing for extended periods of time. the u.s. is in the late cycle of the business cycle. over the medium term, the dollar will appreciate. francine: what happens if we have a trade truce? does it mean the fed is back at hiking? marilyn: far to bring early to

say. -- edmund: far too early to say. upe inflation is not going despite the rise in wages inflation and the u.s. is getting help from the oil price. it was coming down considerably in december and the feedthrough will be negative for the next few months. they have a window where they can sit and do not much. tom: where is blackrock on the concept of lower for longer? we had gary shilling on yesterday. formals blackrock's statement on how low and how long we stay with this rate regime? marilyn: i also think they are going to stay lower for a lot longer. is core view at the moment to have a pause of the first half of this year. as edmund said, the fed will be very patient and are in no rush.

when you see the development of inflation, the development of global factors, global trade, the development of the u.s. economy and activity, potentially in the second half of the year you could see a further hike or a continued pause. areou look at the ecb, they in no rush to do anything either because the bank of england wants to shore up the economy. we think on the margins they will. when you look at the global economy and developed markets, we are in a completely different regime from the past and we will see rates lower for longer. points will also be much lower. tom: james bullard and his idea of regime change. drive forward this conversation in the next half hour. we are taking a recalibration to think about it, december, ugly.

january, edmund shing loaded the boat. dow., up in the we will speak with david herro who has been beat up in the international markets. stay with us. ♪

♪ francine: this is bloomberg "surveillance," tom and francine from london and new york. theresa may is back in

parliament after she saw her brexit deal defeated. she will update lawmakers on the progress or lack thereof, of brexit talks, and will outline a motion to find more time. the e.u. says the need to find a solution is urgent. edmund shing and marilyn watson are still with us. what do you do with brexit right now? play a very simple cable or a lot more fundamental? edmund: there are some things you can do despite the uncertainty. our central view as much as you can have one, is that we have an extension and move toward a second referendum. even if you believe other things, one thing we like as a trade around brexit is to buy dividends on the ftse 100. you have a natural hedge with the currency. if you have a hard brexit, the currency will drop sharply but

the ftse will do quite well because it is paid in dollars and translated into pounds. you have a nice discount as people do not want to touch u.k. assets. this is one way like. francine: how do you look at brexit actions? every day that passes, are we closer to a no deal brexit? marilyn: our core view is we will find a way. delay and/ora extension of article 50 and some sort of deal will be found. we are seeing more noise in terms of negotiations and tension between the parties in the u.k. as well. as every day passes, we are getting closer to the deadline. to argue more on the global portfolios is to trade the pound , so we would be tactically trading it again with our core view being that some sort of

deal will be found, even if it is an extension. we are going right up to the wire and there is no clarity whatsoever. tom: your research note is wonderful on flows. what are the flows of money in and out of the united kingdom now? what do they tell you? edmund: international investors are avoiding u.k. assets like the plague. every time i come to your side of the pond, we hear the same thing -- why are you here? i do not want to talk about europe and i do not care. it is a nightmare and there is so much confusion politically that the u.s. and international investors do not want to talk european or u.k. assets. francine: thank you both for joining us. edmund shing and marilyn watson stay with us. coming up, a conversation with the iaea director. we will look at the price of oil

and other commodities. one of our single best chart's that tom will bring up a little bit later, oil is rising from a two week low amid a deal to avert the u.s. government shutdown it seems to be revealing -- assuring investors and asset classes and boosting financial markets. we will have a look at oil, financial markets, in default in china. this is bloomberg. ♪

tom: good morning. you are looking at an ascendant dollar. prime minister may to speak in a number of hours.

your first world news. here is kailey leinz. >> trade talks between the u.s. and china are underway in beijing. president trump wants to meet .ith season things soon a reunion between the leaders could help bring in official and to the trade war. president trump threatens to double tariffs on chinese imports if there is no deal by march 1. mike pompeo has come close to a suing in us -- eschewing an us or them. the chinese tech giant could limit the availability of u.s. tariffs. the few muslims in the u.s. congress has apologized. .mar has come under fire she reforms what she

is called the problematic role of lobbyists and politics. global news 24 hours a day, on-air at tictoc on twitter, powered by more than 2700 journalists and analysts, in over 120 countries. i am kailey leinz. this is bloomberg. tom: it is always a joy and important, the dynamics of supply and demand of oil and the -- wef oil to speak to are thrilled he could join us today from berlin. it is simple. oil has a new cartel. it is written in the papers. opec does not want to talk about a cartel. is there a new cartel and what is it? >> it looks like the opec others and russia and are moving together politically

and in terms of production aspirations. this is true but the effectiveness of this grouping is another issue altogether. after they make the agreement in vienna recently there was an impact on the practice, but the impact must cross the don before recovering. there is a de facto grouping of rushing and others. how effective is this grouping? from sameult coming in the united states? i look at where oil is and how oil fits into the global economy now. on an asymmetric basis, is there

a risk to the downside? anrolled over on the -- on inflation-adjusted basis with all the synthesis. is there simply a risk to the downside on the price of oil? there of course on the downside -- there are of course downsides and upsides to oil. the upsides of the process are coming from the geopolitical concerns, the middle east including iran. the downside is because of the slowing down of the global economy. it is impact on the demand. especially the chinese equivalents. economyt the chinese this year will be the slowest in the last three decades and we should remember that china alone

was responsible more than 50% of the global oil demand in the last 10 years. the downside impacts on the from theay well come slowing down of the global economic especially in china and other emerging economies. ieacine: does that mean the is reducing the costs for oil demand growth due to signs of the economic weakness around the world? it is early to make a about the revision on .he oil market the i am talking is, if economics slow down, indications come in from china, from

telephones to construction. china,ee a slowdown from this may well hit impacts on our demand's expectations for this year and maybe beyond. do you think opec cut enough production to prevent a buildup in surplus? opec and russia and the $60rs are trying to push where they are but we should not risk is responsible to the -- and more importantly, it will be more responsive is it is out of the finishing a huge amount of new pipeline capacity coming in the united states.

this capacity of the stakes will make the year's oil industry quicker and faster -- a faster way to respond to the changes. exportersdition oil should be careful once today, they should be careful twice tomorrow. towards the end of this year. how much gas you think germany will import going forward and how big of a role will lng play in that? fatih: it is a good question because i am in berlin with a thean economic minister and deputy secretary of energy. we discussed the global energy

markets, europe, the united states and others. to be honest, in the next several years, europe has will it be a continuation of getting gas from russia? or lng, including the united countries, such as -- and others. it is high time for europe to diversify. the lng most out of vein coming from the united states mainly but also from process arecause becoming slowly but surely competitive for you in germany

in particular. francine: thank you so much. the iea executive director joining us from berlin. economy --the german our guest telling us about the needs of germany to diversify. we ask him about lng. this is bloomberg. ♪

bloomberg surveillance, francine lacqua and tom keene with the show. we will get to kevin cirilli, scheduled to join us. now on europe and on the challenges we see across the continent we welcome all of you

watching on the continent in europe. marilyn, the issue -- jonathan ferro has made clear to me there is a profound demand for fixed income. let's start with principles. why is there a huge demand for credit debt in europe? there is a huge demand because investors are looking for yields to master liabilities where they can find it. because weit space have seen with the actions of the ecb, then yields are low or even negative in some cases. with the changing demographics, when you look at the demographics in europe, they are aging and investors to have liabilities to match. we are seeing a positive tone to the market. in they in the u.s. but

eurozone as well. has something to do along with the interests in the u.s. we see a huge demand for yields but only from european investors, but also from foreign investors. they have a huge demand. tom: particularly in europe, are we meeting our actual assumption? whether it is full faith in creditor, yields are low. the real yield is shockingly low. our pensions in europe making their actual world assumption? marilyn: it is difficult to get to those yields and meet those targets. they are having to diversify and look at other assets. one of the potential outcomes from the qe stimulus was to push investors down the risk section

as well. you can get the yield. that is what you see demands or peripheral europe, for italy, but you have to be diversified and nimble. francine: do you like italy? >> i think it is fantastic. francine: not for a holiday. if you are looking for yields, there is a leg up because people expect some kind of election that get rid of the five stars, that have a from a market. are they getting it wrong? is quite likely. when we come back to the political landscape in italy, it is clear that when you look at the government they do not share many principles in common. cellini would like to be the prime in us or without anyone next to him. he is frustrated having to be

dee equal minister next to maio. maybe the european parliamentary elections will be a catalyst. francine: what would it look like? hadave heard noise we treated gold because it belongs to italians. would investors feel comfortable with that? it depends because solving a would not be able to rein by himself. people would see that as a market from the coalition. that would be a good impact. francine: tom? do a lot of derivatives now. can we trust the pricing of -- when i see deutsche bank?

is the market not deep enough? we need to be careful. when i look at cbs you start to see a lag. cbs beingnt would be a more liquid instrument, i am a little uncomfortable with that because at the end of the day, the cast market should really be more concerned is that is what is going to count in the long-term. there is a lag between the two. i am not sure what to think about that. what i do think is cbs has repressed lower's of the risk of rally is being affected less on the cash side. thank you both. coming up with jonathan ferro on guest.n, our

this is bloomberg. ♪

kailey: this is bloomberg surveillance. another sign that china's goods remain healthy. sales the final three months of the year rose a better-than-expected 28%. demand from chinese clients remains extremely dynamic. u.k. lawmakers have criticized philip hammond. the u.k. chancellor claimed a divorce agreement to deliver a deal dividend for the economy mp said the damage and no deal should not be described in those terms. the company is getting ready for all brexit outcomes. are filing a few weeks worth of stock outside the u.k. valentines, -- produced in versa,and divide

selling. francine: thank you so much. in itscame up short first earnings report since the arrest of donald good in november. the carmaker took an $83 million charge related to the conversation. it also forecast earnings to fall. to catchalways great up with you. how much does this have to do anymore?ot being there >> you can feel carlos ghosn's ghost in that room today as they spoke at length about turning the page and wanting to forge strong relations with the alliance partners moving on from the sag a, which is in its 86 day since carlos ghosn was

detained in tokyo back on november 19. well.s headlines as a lot of media was here because of carlos ghosn's alleged lifestyle. his big marie antoinette themed wedding and versailles, but really -- one at to focus on the path forward. they have a lot of hit -- they have a lot of headwinds in them -- the market globally. also, you have the brexit issues , the plant, one of the biggest auto plants in the u.k. sales --not juicing nissan are not juicing sales. the sun, aside from the carlos

ghosn woes, are having trouble now. francine: where does this leave the alliance? alliances -- the alliance, it is an interesting question because the french government wants to see it go forward. nissan wants to strengthen the alliance but it once a more equitable partnership. the french government owns 50% of renault. renault owns 43% of nissan. the sun owns 50% of renault with no voting rights. a want a more equitable partnership. this question about the leadership going forward, who is going to be the chairman of nissan now that carlos ghosn is out of the picture? will it be renault's newly appointed chairman coming from michelin? he danced around the question. he said, concentration of power

in the hands of one individual is not necessarily what we want. you ceo either nissan is trying to strengthen the alliance but at the same time once more say -- if not, perhaps more independence. francine: thank you so much. bloomberg's it stephen engle joining us from japan. singh. is edmund when you look at carmakers, does it have an influence that carlos arrest? still an we are at the end of the global cost cycle. auto sales in china posted negative growth for the first time in many years. the u.s. is at the end of the car cycle. the credit cycle is also at the end.

the auto sector globally wrote on the back of easy credit and financing and that is coming to an end. dieselgate. it has been a perfect storm for the global car industry and we are not out of it yet. what danomes down to oprah said in his book. it is the age of oversupply. productivity over of nissan and the alliance saved them out of bankruptcy. within the broader context of industry, in the next year, if it an age of oversupply we are dealing with? tom.d: you're right, we have had a rejuvenation of the global carpark in the global growth engine that was china for auto is a slowing. the other problem is we are transitioning towards a different mobile where cars are

even uberized rather than bought as they are today. there is that change that carmakers are struggling with. having settled with that, the sector evaluation is cheap particularly for europe. we have had a lot of bad news. some of that is starting to insipate, for example, germany. some of the slowdown in our sales should -- reverse over the coming months. tom: can you rely within the addiction of europe, can you rely on dividend is the major part of total return? edmund: i would not rely on that ofause you are at the end the car cycle. there is an investment that needs to be made by carmakers to move towards the eb market and in europe.

they are doing it. volkswagen is bringing out a new platform for 2020 which is any the platform. that is going to cost a lot of money and cash flows could decline as opposed to accelerate. tom: thank you so much. greatly appreciated this morning. really now, the dow up 7% as well. coming up in our next hour, gideon rose will join us. with a timely -- on the new nationalism, the nationalism of a new america. 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. tom: the dollar dissented against the euro as the euro considers stagnation and

slowdown will limit chairman powell's degrees of freedom. shutdown averted in this hour, the fiction and nonfiction of your american political story. gideon rose on the new there is thend thundering silence on all things brexit. the prime minister to speak today. this is bloomberg surveillance live from our headquarters in new york, i am tom keene. francine lacqua in london. we await the prime minister. you will talk about brexit, tom that we do not know what she will say because march 29 is the deadline where the u.k. should leave the eu and we do not know when the next vote by parliamentarians is. we hear rumors it could be february 24. we will look for the timeline because the closer it is to the

deadline, the more it could -- in time. we did not talk about gucci. tom: gucci was a bank up reads report and it is still moving. francine: thanks to tom keene. tom: still selling. kailey: congressional negotiators have reached deal to avoid a new government shutdown. president trump had thought as much as $5.7 billion. trump said the shutdown was important to highlight the issue of the border. >> if we did not do that shutdown, we have -- we would not have been able to show these politicians the world what the -- is happening with the border. that was important. kailey: the trump administration says the u.s. president wants to

-- xiith season paying jinping. the president wants to meet with the chinese counterpart soon. trade talks take place in beijing next week. lawmakers have criticized philip gannon. mp said the avoidance of a damaging no deal divorce should not be described in those terms. -- isresa may addressed set to address the house of commons later today. global news 24 hours a day, on-air at tictoc on twitter, powered by more than 2700 journalists and analysts, in over 120 countries. i am kailey leinz. this is bloomberg. tom: thanks. equities bounce. currency specific today. everything wrapped around a stronger dollar. futures up 190 points. a lift to the market.

euro, euro, euro. 1282. a weaker euro over the last number of days. showing a.10 complacent bull market. i show euro again because i was half asleep. 97.2 is a big deal. francine: the trump administration says the president wants to meet xi jinping and an effort to end the trade war. that is giving a lift to the markets and the prospect of the deal could keep the u.s. government open. this is giving a boost to european stocks. i am looking at pound. -- see unchanged at 1.20 8 128.50. it held steady as the u.k. prime minister will update lawmakers on the progress or lack of progress of brexit. tom: i want to bring up a morning must-read.

always gifted catherine rampal writing in the washington post. democrats next two years are at the risk of turning into the republicans of 2.5 years ago, emphasizing empty slogans instead of evidence-based policy, rejecting experts in favor of pranks. some of these are big were the goals. some are expensive goals. to goes on to say the president offered up a series of empty slogans. mexico will pay for it. replace obamacare with something terrific. the secretary of state lost because voters distracted -- distrusted and disliked her. we go with kevin cirilli in washington. what does joe biden think of all this? joe biden has been quiet. when do we hear from the former vice president? to have tos going make a decision.

big newsarren -- the $1.37 past 12 hours is billion framework to go to the wall is less than the $5.7 billion president trump wanted. the key question. this is the theme for the hour, words,aded n negotiation. is there any indication the president enjoys or wants to negotiate? up until now, president trump said he has got to get the he has left it up to senate majority leader mitch mcconnell as well as republican deal.ship to negotiate a they got a framework and now the ball is in his court. if he does get behind

it, can he sell it as a win? kevin: it is tough to sell it as i win because it is less than he wanted -- than the $5 billion he wanted. he could declare a national state of emergency and take the money he got from congress to get additional funds. that is going to set up a legal court battle that he would have to go all the way to the supreme court. tom: thank you so much. it will be interesting to see the art of the deal is the president moves forward on the shutdown and while and -- wall and the new nafta. benchmark fory us, not the jobs report but you need to get a subscription to foreign affairs and new nationalism. this is one of the few magazines where you have to buy the physical thing. it is always smart. gideon rose joins us.

the new nationalism, what a timely theme. could it be the new populism? gideon: they are connected. if you think about the term nationstate, it combines two things. the state is a political community. the nation is a social group. the question of nationalism is, what of the claims of the social group of mistake? that raises the question of who is the nation? tom: who is donald trump's nation? we are talking about the need to negotiate. with all your expertise, what is the negotiation ability of trump nation now? the question is our politicians in america going to think with their national identities, political constituencies, or anything resembling a national identity in which they can make a deal for the nation as a whole? whether the trump or their opponents are willing to do

that, or whether we are locked in a partisan battle with identity politics and partisan politics are so overlapping you cannot get any kind of deal, you get a prose civil war? i hope we can avoid that. francine: i keep hearing no one wants a shot down. this is the worst possible outcome because everybody looks bad. , their basess up hurt. is that true? gideon: there are different reasons people do not like a shutdown. some people think it interferes with government because they think government does things. other people cares about the politics -- does it make me look bad? people care about the shutdown ending but not everybody cares about it ending for construction reasons. witho politics merged technocratic realities?

having.the fight we are too many in washington are playing the politics game. francine: on the politics game, this is a basic question. if there is a shutdown, will the president he blamed? does it hurt his voting in 2020? yes, if youuld say say this is my deal. the public did not like the shutdown so if it happens again, they will say the same. tom: it is a good thing to have you on 110 years on him the first of abraham lincoln. it is good. there is a guy who figured out union and redefined it an immense cost to the nation. what would lincoln think of this new nationalism? gideon: lincoln would be familiar with contemporary american politics. he would feel at home. tom: i agree. the wakes of the republicans. gideon: what does the country of?

--owe? ideologicalerent groups and parties -- how do you fit together in a common? country tom: which side are you on? gideon: how much does it elevate to the secession of the country? it cannot be in the same country. that is the question you face in a place like spain. can the regions be part of the --e --tom: tom: or in ireland. william lee will join us as well. what a joy. gideon rose and william lee. we will full that in as well. and again, hearken back to prime minister maze important speech. -- minister may's important speech. huawei -- tom: --

this is bloomberg. ♪

kailey: this is bloomberg surveillance. nissan came up short in its first earnings report since the -- -- the arrest of carlos ghosn. took an $83r million charge related to his compensation. happyts users are not .ith one new investor techcrunch signal the internet giant's interest last week.

the site has an outspoken and sometimes controversial community. been banned in china. the u.s. is said to have cut its bonus pool for investment bankers and asia. this comes after a slump in equity market -- marking hurt. the poll has been reduced by 8%. lastis a reversal from year when dealmakers in asia saw bonuses rise to express a. that is the bloomberg business flash. rose, the new nationalism, we will touch on that now. and with us as well, william lee. dr. lee, wonderful to have you with us. i will go to you on the global slowdown and its impact, how it moves over. if you use traditional economic models, how do you fold global

-- is there aism linkage? william: how big is that linkage? the fed is concerned but how does it show down in -- how does a slowdown in china? china has taught us about how strong these supply chains are and how the means of production have shifted over time and is more integrated. europe is not on its tail from a two handled growth to one partly because of the slowdown in china more so than we would have thought. francine: should we worry about defaults in china affecting markets? the defaults in china are showing us how leverage they are. that is holding back china from doing the stimulus it used to do . if we had a traditional slowdown in china, china would have

pumped up credit and try to revive domestic demand. you see how reluctant they are to do so because they have already gone on a campaign of reassuring the world we are ining a -- our policies place that put a handle on the rising leverage. that is the big constraints. that is why they are desperately looking to make a deal with trump. francine: is there a concern these chinese defaults cause contagion? isliam: the contagion story something more mysterious in china because faults, even the private sector are linked to enterprises one way or another because owners of the enterprises are linked in some familial or other political way to the has of the states of local governments. we see they are reluctant to let the cascadian effect that would

normally take place and our western economy occur in china. they are confident they are going to contain faults. the question is, will they push the economy? tom: we go to gideon rose, who is an expert on the elasticity of the -- in the black and white photographs, the u.s. was a closed economy. from an ir standpoint, how closed is america now? how open is the economy that dr. lee has to deal with? are you ok? did i do ok? you did fine. we were talking about nationalism. there is the nation of the state but also the economy of countries. you have individual countries with their economies in the question of, how does that national policies work for the global whole?

it is the same question we were talking about nationalism. the problem we see are the u.s. and global economies are linked in ways that would make them logically coherent to manage as a whole but the politics are getting in the way. incentives toomic cooperate but also national and political incentives to fight. tom: we are more open and is that a good thing? have different means of production in developing the u.s. and china. one thing that held the united states in a civil war is the south had a different agrarian means of production. that is part of the overlay that divided the union. what is dividing the global economy is the development of 5g. china's system is different from the u.s. the means of production are keeping us apart and setting up a competition rather than a

cooperative solution. we will come back and talk more about 5g and security. gideon rose and william lee, stay with us. coming up, sarah malley. that is coming up at 8:00 a.m. in new york, 1:00 p.m. in london. this is bloomberg. ♪

>> latin america is coming up. brazil, argentina, venezuela. >> is their money in venezuela? >> absolutely. man who starts his people early ruins the country. that was the egyptian -- other nations have guido as interim president. we are joined by our guest. when you look at president trump and how he is playing with venezuela, it seems this is textbook diplomacy. why is he doing it with venezuela but not so many other countries? venezuela is a good

example of how important the infrastructure of politics and social structure are. president trump is realizing venezuela is resource rich to allow the economy to fall into the depths of depression it has ,one into and social breakdown would be such a loss in the way of world resources. that is the mandate behind the u.s. coming into the picture. one thing you see around the world's emerging markets believe they are lacking in resource, lacking in human capital to develop as quickly as advanced economies. venezuela is a great example how important social infrastructure is. francine: how does it end? is it impossible to say? because we is tough could see venezuela spend the next decade in the same morass vet ofl the huge

resources out of the global economy. that would be disruption the economy would have to think carefully about. even though we think of ourselves as having a glut of oil, venezuela and oil is special. tom: gideon, where are we on the munro doctrine? at gunpoint in seventh grade. gideon: the idea the united states has a responsibility for policing the western hemisphere, these things go hand-in-hand with a country's power. china is trying to exert its own munro doctrine. when you get strong, you exert power on your periphery. the stronger you get your periphery expanse. no one is going to intervene in venezuela from outside the western hemisphere against the u.s. wishes. whether the u.s. wants to interfere or bring other latin american nations together to

intervene, that is interesting. the real question is what happens when a regime run the country into the ground and refuses to leave? everyone agrees chavez and venezuela'soyed society but they locked themselves in the powers that be that they cannot be dislodged. everyone is watching this tragedy and no one knows how to pull it off. .om: thank you so much we are going to continue. we have got a lot to talk about on the american economy. banks,e, on european david euro on bloomberg later today. ♪ the latest innovation from xfinity

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the u.s. and china are back underway in beijing. president trump wants to meet with xi jinping soon. a reunion between the leaders could help bring an official and the trade war. president trump threatened double tariffs on $200 billion in chinese imports if there is no deal by march 1. mike pompeo has come close to issuing an us or them ultimatum to huawei. the top american diplomat is making a push back against huawei. and one of the few muslims in the u.s. congress has apologized for tweets that democratic leaders called anti-semitic. has come under fire for implying u.s. policy on israel was influenced by the american public affairs community -- committee, which is a lobbying group.

global news 24 hours a day, on-air at tictoc on twitter, powered by more than 2700 journalists and analysts, in over 120 countries. i am kailey leinz. this is bloomberg. thank you so much. theresa may is back in parliament four weeks after she saw her brexit deal diffuse -- disputed. she will also outline a motion she will put up for debate to buy more time. the eu says the need to find a solution is urgent. brexit -- now, our bloomberg brexit editor. first, does she have a majority in parliament if you look at, person by person -- can she get it through or does she have any kind of leeway with the eu? >> the first thing to mention is we do not have a date set for when theresa may is going to bring her deal.

there has been little progress. yesterday we had very little progress on anything from the e.u. side in terms of concessions and we think there could be both sides of running down the clock. bringis no date yet to this deal, this revised deal back to parliament. that is the meaningful vote. that is -- it was suggested but -- this morning by someone in theresa may's government that could be last-minute. there is sense the march 21 summit in brussels could be the showdown moment where she gets some concession and comes back to parliament and with a week until brexit, she posted desperate that the lawmakers and gets voted down. that is speculation. on thursday and two weeks after that, these are opportunities for members of our limit to seize control of the expect and we do not

high noon moment on thursday. at one point we did. we do not anymore. some of the motions we saw a couple of weeks ago, for example about the possibility of forcing may -- the labour party will come up with a motion that will whetherr to make clear a majority of a deal or not. wherever we are now is theresa may is saying there with me. hold joiners. let me go back and renegotiate. there is no sign they are willing. she is saying give me time and i will come back in two weeks. i promise. you can have another crack in two weeks time. tom: if it is a game of chicken and they are running the tail to the end of time and maybe they will have something happen, which party am a come are you

following most? who will crack first? that is a question to which i knew the answer. you asked about parties and i wonder if you mean within the u.k. parliament. in theeresting question u.k. parliament is the labour party. we have seen -- launching the numbers. your question to -- is there any way theresa may can get her deal over the line? look at the numbers. lawmakers think that come the hour, enough labor lawmakers might just boat with theresa may's deal to get it over the line and durham a corbyn who pursued an ambiguous start on brexit for electoral reasons, he is giving them space. back giving them space to may's deal. tom: it is fascinating.

ross-thomas. -- m a-ross thomas. this fits perfectly with gideon rose. i watched a movie with helen mirren. this labour party is not mr. players labour party. what is the labor nationalism you and your team observed? gideon: this moment is bizarre. it is said to anybody that at gemini, both the united states and united kingdom from remove themselves leadership roles in global politics and simply turn inward and focus on domestic dysfunctional debates about who , nobody woulde have believed it but that is what is happening. the chinese and russians and the heck?re --what

focus on internal affairs and thumbsucking. tom: from here it is remarkable how disjoint mr. jeremy corbyn seems from any understanding we have of the labour party. francine: yeah. if you look at the democrats in the u.s., gideon you can also see turning more to the left with some of the proposals on taxation -- is that what left parties will become? more to the left across the western world? gideon: i think we are going into a new -- bringing in a new series of changes on that old binary. all the nationals and identity politics stuff, i believe after putting together an entire issue and looking at all the complex theory, it comes down as to whether governments do real

things to solve the problems of their citizens. people want their lives better. they want results and to feel taking care of. if government can do that, they will -- whatever your cause is, you will actually pull the population kind you. if you pursue subnational interests or if your policies do not work, your public is going to look elsewhere. whatever the identity is, it is about delivering results to people on issues they care about. a lead todaythere that looks like they are safe? gideon: the answer is no because there are no leaders delivering real results. the leaders that are safe are the ones that deal with the problems under the popular movements. now we have discontent and politicians are responding to the discontent. they are not responding to the underlying problems. tom: well said.

senior vicethe president for discontent. the bottom line is a terminal value that is unacceptable to the broader body of society and a lot of politicians. 4% in many up different nations. have you break out of that? is it by political process or another way? we are seeing thousands of years of tribal tensions manifesting itself in brexit and the inability of the eu to pull together. as a chauvinist america, it reminds us of the european wars taking place only now the war is being done in a political landscape. globally, we at milton believe politics and social problems can be healed over if you generate enough growth and that is what capitalism is about.

to funnel capital to solve , we have aems conference in the middle east now looking at these issues on a regional level. solutions are going to come from regional growth and policies to further the development of capital markets and economies so all these social -- can be covered. is the disinflation in europe -- is it cyclical or structural? the structural components of disinflation have been underestimated all my colleagues for almost a decade. the flatness of the phillips curve shows the structural elements are reeling their heads or the cyclical elements and one thing overlooked is technology. transparency, such a lid on the ability to raise prices, we do not have

normal inflation. francine: billy, thank you so much -- bill lee, thank you so much. tom? francine is great to come in every day. she is everybody's got us on our staff and we hear a ballot -- weezer about it from all are acquaintances. withg up, and interview peter welch meyer. please stay with us. this is bloomberg. ♪

kailey: this is bloomberg surveillance. another sign that china's appetite for luxury goods remains healthy. outpace competitors in the fourth quarter. sales rose a better-than-expected 28%. the company says chinese demand from clients remains extremely dynamic. calls to flash costs in overhaul corporate government. the results may provide breathing space. the company grew at the fastest pace since 2012. alexandra card said he is open with talking with investors. >> i am open to dialogue with investors, including elliott. we have had an open dialogue over the last couple months. governance is something that has been improving over the years ever since i took over chairmanship and which will keep

improving. governance improvement is an endless process, to be fair because challenges evolve. governance will keep evolving over time. kailey: that is the bloomberg business flash. tom: thank you so much. good morning. rose --is with gideon four gideon rose. we will he desperately do it to william lee. to dollar.rade way the rubin dollar in the middle. the new rubin dollar, what you call it? the munchen dollar? the dollar will weaken. is this going to be a year where consensus is wrong? the models are going to get revised. says we are done tightening for a while and the

dollar strengthens, there were something else that work. a magnet forins global capital. this is the economy that is trying to stay above three handle and the rest of the world is barely having a one handle. that is where everyone realizes the dollar is going to remain strong because everyone wants to come here to invest. perfectly.id it up here is the issue with gideon rose, the new nationalism.

a new nationalism because everyone wants to run their money the -- into the united states. gideon: that is a good point. tom: the issue is everybody wants to be here. we welcome you, mr. president -- he would say look at the markets. the money is flowing in. gideon: united states has always had extraordinary national advantages. is will politics screw it up enough to get an the way of the natural animal spirits of the american population, which continue to power the world innovation if only we would let it? william: we are headed and shoulders above the rest of the world. it is going to take a long time to screw things up so badly investors will not want to come here. andsocial tensions political tensions in venezuela, and even in your area are enough of a caution that global investors want to come here because they see the opportunity -- mun cine: admin saying --e

-- i was point of a look for another reserve currency? is like worrying about pimples when the rest of the world has cancer. the u.s. has a lot of pimples and difficulties holding it back from achieving faster growth rates come about when you look at gdp ratios, look at japan. look at italy. you have advanced economies with gdp ratios and they are limping along. the u.s. is managing to have an above trend growth. that says a lot about how the count was being used. i am the first to say the government is not using its capital wisely. we need policies to revise that, but given comparisons to the rest of the world, even with china the leverage in the united

states is being put to use and a better way and more productive way. you see it because the investors realize this is the place to be. francine: thank you so much. gideon rose stays with us. coming up, with jonathan ferro on the open, the economic advisor and bloomberg opinion columnist coming up at 9:30 a.m. in new york. this is bloomberg. ♪

>> in georgia and around the country people are striving for middle-class, where salary equals economic security. instead, family folks are being crushed by republican leadership that ignores real life or does not understand it. formeracey abrams is a georgia gubernatorial candidate, speaking to the state of the union. bronx in a miss a strong statement on identity groups in the vanity -- and the

democratic party. have identity groups, which are urban i am going to suggest in character, can you win back wisconsin? that is the heart of the debate. gideon: it is about identity politics. nationalism is identity politics at the national level. the question we talk about with identity politics is whether there is room for identity politics at the sub level last -- subnational level as well. certain claims, minorities, white males, working-class, whatever. the debate between stacey who she was responding to, who had written about the need for an overarching national identity, the question is can different identities overlap and be contained in a nesting way that is calm and relaxed?

the answer is yes if we think of it the way economic groups do. most favored nation status, trade means you get to have as much right as anyone else but no more. if we think of black lives matter or me too or every identity group, you get as much right as anybody else but no more, that could be keep all the rights together but within a single common pool. tom: do we become more german or more american or more him bodie and -- cambodian through hardship and war? it takes a war to become more of a union. gideon: one of the possibilities may be the economic crisis of the second gilded age we were talking about, the massive social inclusion of outside groups may be creating the kind of social and economic crisis that will forge a new national identity. hopefully it does not require -- with china or and ask war

and ask will war, maybe the struggle to deal with social divisions may create a new national identity for the whole. differentis an 2019 because the election of donald trump, if you look at the issues of race and immigration? they are treated differently than they used to be. gideon: i cannot see any way these issues get resolved while we still have the current political leadership in place. we are going to have endless fighting till these coalitions resolve themselves. maybe in a few years, this turmoil will resolve itself. in the current situation, you're not going to see a truce. at the end of the piece, which it is a very strong does, the question is, identity politics help the u.s. make up what it stands for? gideon: what someone like stacey abrams is saying is, you are

coding identity politics and trying to get some of -- some back. it is our claiming the same rights you dominic groups have always had but we wanted to bank. this question of, who gets to define what is normal versus identity politics? tom: francine, you have breaking news. francine: we getting breaking news out of the u.k. cabinetmay has told her of ministers she needs more time for negotiations with the eu. from the eu side, we have not seen much headway. theresa may saying she will seek legally binding changes from the backstop in the government will put a motion to parliament by february 27. it is the road to parliament the portent one we do not know the date of yet and that is crucial. tom: francine, get some rest. the plague along with half of

our team it seems, this morning. cannot say enough about foreign affairs. on bloomberg radio, much to talk about. out front in the markets, as -- the stronger dollar the theme of the day. do not forget david westin at 12:00 noon. for those listening in washington, kevin cirilli's important conversation at the 5:00 p.m. our in washington. that on bloomberg radio and you can see it 99.1 fm, washington, d.c. this is bloomberg. ♪

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you can negotiator's return empty-handed -- u.k. negotiators return empty-handed. d.c. avoids a government shutdown. president trump says they are building the wall anyway. markets in the mood to rally. trade hopes rise. david: welcome to "bloomberg daybreak." i'm david westin, here with alix steel. revenuemour neal dunn -- nailed on revenue, but beat earnings per share adjusted. they've been going through a , trying to sell off their inventory. having to restate their 2017 2018 results on material weakness.