president xi jinping as trade talks continue. they will push for a win-win agreement. talked to one of the authorities on the asset allocation and commodities. amazon versus new york, the politics of tech. what now with a world-class developer. david: welcome to "bloomberg daybreak." as we look at the white house, they will have some big events down there today. the president expected to sign the bill to keep the government funded. he will saytime, that wasn't enough money. i need another $7 million plus to build the wall. -- $7 billion plus to build the wall. constitutional, but

makes perfect sense. alix: you called it. you said it was really good for the lawyers. david: that's exactly right. we will have coverage of remarks from president trump at 10:00 a.m. that will be live on bloomberg television, radio and online. alix: a futures market that wants to grind its way higher, but not a lot of movement. the price index number out of euro-dollar down 20%. -- euro-dollar down .2%. crude, upoking at .3%, the best week since october. deere, the commentary really interesting. they unsettled conditions in their key markets.

they basically raised a lot of red flags on commodity prices, farmer income and tightening credit. really not good for them. out,: we have pepsi coming they meet on earnings-per-share and revenue. they said they will have more restructuring charges, they will get more efficient, it will last for a while until 2023. the stock up about .25%. alix: and nvidia. david: as long as they get those gaming chips, they will make money. inflationa's factory -- the white line is the ppi and the green line is profit. if you have lower factory prices, you won't have as much debt. currentus now, and the

-- enda curran. no doubt it has partly to do with the falling commodity prices. it's also an indication of the broad pressures of the manufacturing sector. we've had seven straight months of decline. heading very close to flirting with deflationary territory. that would be a huge drag on profits and drive up the cost of debt. it may playsts say a role in exporting deflation to the rest of the country. traction, buting when you consider what's happening on the broader manufacturing sector, most economists say there's more stimulus on the way. david: thank you so much. now, it's time for the bloomberg

first take. we are joined by michael mckee and rachel evans. we want to stay in china. ppi numbers, their negotiations going on -- president xi said the following. negotiations between both sides have achieved important progress. next week, both sides will meet in washington. i hope you push for a win-win agreement. this comes after steve mnuchin said it's been constructive. do we read much into this? michael: only a tiny little bit. they're coming back to negotiate again next week in washington. it does appear they are making some progress. reports from the inside is that it still remains far apart on the substantive issues. basically, how china remakes its economy to meet u.s. demands and not meet fake subsidies. the ppi number not

stopping the flows into duration? in stopping the flow into other em. outflows for the first time since july. etf, not hugeina outflows, but a couple months of pullback. week,slight pause this but the past few weeks, 3 billion of those funds -- people are looking at the broader em complex, feeling good about that, but china is more wait and see. david: we have some positive indications in the united states. it appears we will not have another government shutdown. the bill will go to the president's desk today. reportedly, he is going to sign

the bill. he will get $1.3 billion for his border wall. he says i will take another $6.75 to build what i want to. michael: it is the reverse of shakespeare. not kill all the lawyers, but retire all the lawyers. the national emergency issue will be a fascinating one to watch going forward. you look at the analysis of whether the president has the power to do this, the people who oppose the president cite a lot of statutes and say he can't do it. people who support the president cite the same statutes and say he can do it. --e read a lot of analysis the question of first impression. none of this has been decided by the courts before. nobody knows what's going to happen. david: there's a third question. will the courts stop him?

even if it's illegal, the courts may not intervene. out -- what this will that do to the market? they've been ambivalent about what's going on. people know the shutdown isn't happening, it .ill go back to normal i think the market will be now that thellish shutdown has been averted. for now, this will be viewed as a positive, although we could see legal shenanigans going on in the background for some time. michael: it's not going to hurt the economy. with i would deftly go david. what's happening with amazon,

the tech clash, the backdrop. new york versus amazon, amazon pulling out. properties, a -- this hased significant ripple implications that are real. rachel: i was looking at this through the lens of realty yesterday. we did see a dip in the real estate etf's on this news. been doing well -- there was an impact on sentiment here. given what this means for real estate more generally, that is an interesting place to watch the impact. david: could this be brexit?

is this over yet? could we have more negotiations coming? michael: i can't see how they do that without a significant cooling off period. the politician supporting this work declaring victory -- wereicians supporting this declaring victory pretty openly. citiesve a lot of other that would want them. we heard from the governor of new jersey saying come to newark. there's a long way to go here. alix: we will speak with the governor later on. later on in this hour, we speak to bill rudin, rudin management about what this means for new york real estate. coming up, china data

disappoints. could we see a return in deflation? us,stopher j wolf will join next. this is bloomberg. ♪

alixviviana: this is "bloomberg daybreak." pepsico's fourth-quarter earnings fell in line with

estimates. $1.49.s per share of the company will generate productivity savings of $1 billion annually through 22 any three. -- through 2023. saw outflows a spike in the fourth quarter -- investors inhdrew $35 billion of funds the final three months of the year. operating profit fell by more than 9%. the company says that is mostly due to low performance fees and higher expenses. banking group will have a new chief financial officer. they named william chalmers as cfo and executive director. chalmers is expected to juneially join lloyd's in subject to standard regulatory approval. alix: china's factory and consumer prices missing

estimates, adding to concerns of deflation and deteriorating profit. the white line is ppi. the green bars are industrial profits, barely inching out any gains. factory prices continue to decrease for the seventh straight month. francisco blanch and christopher wolfe. world, 100% your commodities? francisco: definitely, there's a lot of commodities in china. there's issues going on on the supply side. even though we are getting deceleration, as long as we don't have a major slowdown in ing, we willn probably see opec cuts in december. alix: chinese credit growth hit

a record in january. what is the knock on effect of this? christopher: a couple of things. there's broader indications that china is slowing down. there's some distortions in the data around the chinese new year. data, itat the export there.s some bullishness that means the rest of asia may have some challenges as well. flagnk we have raised the saying we are concerned that this needs to turn a bit as the year goes on. -- tariffnegotiations negotiations could offer relief. david: what about going on beyond emerging markets? are they exporting deflation? the chinese phenomenon is driving down cpi around the world.

francisco: can i say disinflation instead? it's really slowing the inflationary growth trajectory. outright deflation, we are not there yet. economy is still in good shape. s continue toumer be in good shape. the export of deflation is not here yet. i think the tariffs will prevent fromdisinflation export following to the rest of the world economy. strength is ind the americas. 42% of the demand we've seen is in the americas. francisco: that's right. part of the reason we are growing so much is because the u.s. economy has done so well, we kept on revising in recent years are prospects for u.s. energy demand and oil demand.

they kept moving higher because we are producing a lot of it. we are building petrochemical plants here. we are building all kinds of facilities like liquid natural gas export facilities supporting consumption at home. we want tosee india, see the rest of southeast asia. i think the chinese economy seems to be topping out in terms of growth rates. we need the rest of asia to pick up. it may be hard for that to happen in the context of a faster slowdown. we are watching how quickly china builds on this point. dichotomyr: the between commodity exporters and importers will be an interesting one. the exporter will struggle here. the contribution to global cpi and global ppi could be a bit of

a struggle, particularly for the materials producers, the companies in this market. david: christopher wolfe and francisco blanch will be staying with us. coming up, amazon breaks up with new york on valentine's day. we speak with bill rudin on what this means for new york city. ise from new york, this bloomberg. ♪

david: that news of amazon canceling plans to build headquarters in new york shook

the world of real estate. ofyd blankfein led a course leaders-- chorus of decrying the news. polls show 70% of new yorkers were in favor. victory lap for them, not for new york city. we welcome on the telephone a leader in new york real estate, bill rudin. thank you for joining us today. we knew amazon was thinking about it. i was not prepared for it. was the real estate community prepared for it? bill: we all had a sense that something was in the winds. we were hopeful. we started seeing a more forceful response by community leaders. reverend taylor and april

simpson, who runs the queensbury housing, they organized a press conference this week. people went up to albany to present their case of why they wanted these jobs and why it was important to have amazon come to long island city. it was about creating opportunities for people, not just in long island city, but throughout new york. it was very disappointing. there's an article in "the new york times," why tech could keep getting ground in new york without amazon. we are positive about the fundamentals in new york. google, facebook and other tech companies -- bloomberg just renewed its lease in midtown manhattan. there's tremendous growth opportunities. why was amazon coming to new york?

it is the connection to universities, culture, all the things that are so important for our city. we will bounce back. we have bounced back before. we've gone through a bunch of other situations. the fiscal crises. we are optimistic we will keep moving forward. david: you make a case for why -- what went wrong? whose fault is it? bill: there are a lot of people out stood up and gave inaccurate information. they were passionate on their points. some points were legitimate, the question about infrastructure and transportation, but those were going to be addressed. amazon was going to create open space, create public schools, create training facilities and

reach out into the community. unfortunately, that story got drowned out by a lot of loud voices. peoplels indicated that in the city wanted this opportunity to have amazon here and all the jobs that were going to be created and the impact that would go on for generations economically. the people of the city wanted this. other companies will fill the void. we will keep moving forward. david: how big a hit is this for the real estate community? there had been some overbuilding and amazon coming in would be a big help. >> the first to come back from the great recession, we got a bit too drunk, we overdid it, we overbuilt. we thought there was more depth in the market than there was. them coming into the market is

just creating the floor. to create a floor of activity to fill those apartments, not creating overheating. david: we've now taken away that floor. do we need amazon to soak up that excess capacity? bill: amazon initially was going to be a few thousand jobs. citibank is moving out and going back to lower manhattan. of course we need them. we will find other people to fill that void. i've been on your show, talked about our project in brooklyn, and we have good activity going on. i don't think this is going to stop people who want to be in the city and want to grow in the city. it will be more organic. it's not going to be that when he 5000 plus jobs. -- 25,000 plus jobs. there's a significant amount of

residential opportunity in long island city. that creates opportunities for people to have better pricing. those apartments will fill up. macy's just made equipment to have a few thousand feet -- a commitment to have a few thousand feet. incentiveou have the to come and build here? bill: one of the things that got lost in the translation was a significant amount of the incentives that amazon was getting are all asset ripe. there's a re-benefit. if you move people into the outer boroughs, you get that as of right. any company that wants to come into the city and move into the outer boroughs, which are

continuing to diversify, will get a significant amount of incentives. moving lower manhattan from connecticut -- they're coming down into the city. that doesn't send a good message, but there are strong voices out there to talk about the city, talk about the strengths, and companies understand that. that's why google and facebook and all these other companies are growing here. david: is this a one-off or does this say something about the politics of the situation? bill: there's no question about butthere is a shift, hopefully there's lessons learned on all sides that there has to be constructive dialogue, addressing the concerns of the

community, which were being discussed. it's not a zero-sum game. people have to understand that to create jobs, you need to invest. anzon was bringing incredible number of jobs, full range, union jobs, construction workers, cleaning services companies. some of those issues were being addressed. that -- it's new york, they're going to come here -- you have to have a constructive dialogue. are thele who got hurt people who wanted these jobs. those opportunities have been lost. it is sad. david: that is bill rudin, rudin

management co. chairman and ceo. we will speak to the governor of new jersey -- they said come here, if you like, mr. bezos. alix: was that even in the running? david: virginia got some of it. amazon said they are not interested in a second run -- you can't blame a guy for trying. alix: they need the money. in the markets, it's been an interesting week overall in the s&p market. you have money coming into the long end of the bond market, some kind of equity rally underway, a re-rating of where we are in growth and inflationary terms. s&p futures flat. me, thengly to automakers are up .9% despite

the fact that we get this deadline coming on sunday from the commerce department that will deliver the results of an investigation into u.s. car imports. classes, a mixed dollar story today. euro-dollar down .2%. in the bond market, it is pretty quiet as we go with the exception of italy's 10 year yield. renewed threats of italy leaving the eu leading to the biggest increase in yields over italy in a week. the rhetoric continues. david: we have the european parliament three elections -- parliamentary elections coming up. --x: the 210 spread flatter 2-10 spread flatter. the best week since october for

the asset class. today, president xi jinping meeting with u.s. trade es,resentative's high-level trade talks resuming in beijing. president trump indicating he would consider pushing back the deadline if an agreement is within reach. telling thero associated press his government has held secret talks with the u.s. envoy. he predicted he would survive the global campaign to force his resignation. he reportedly hopes to meet with .resident trump spanish premise are calling a snap election as -- the spanish prime

minister calling a snap election as expected. spain will now hold its third election in four years. the next vote will be held on april 28. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. deere reported profits that missed the analyst mark this morning as higher costs and trade concerns appear to be eating into the company's bottom line. taylor: shares falling 2% now. they are seeing a big mess on this quarterly earnings per share, also cutting the full-year net operating cash flow and cutting the worldwide construction and factory sales view. they are seeing higher costs for raw materials and uncertainty surrounding trade, meaning customers are not purchasing this equipment as much as deer

e would like. you see them start to perform their biggest competitor, caterpillar. these stocks generally trade in line. they got a bit too far ahead of themselves. you are seeing that pullback today. ,he biggest concern for deere their ag equipment. sales in the u.s. and canada flat at 5%. sales -- four street rise,estry sales set to but only looking at a gain of 10%. alix: the usda says soybean exports will stay below their pre-trade war levels. farm incomes will have a week start this year despite getting government subsidies.

i sat down with an illinois so being association -- illinois soybean association chair to get her take. >> i recently returned from taiwan and indonesia. those companies are important to the soybean industry. number onehe customer for illinois soybeans. they play a major role in the taiwanese daily lives where they eat tofu and soy milk on a daily basis. and indonesia, it is a main staple in that country as well. alix: is there any place to be a full offset of china demand? there's really not any one location that can take over the whole china demand. a country that does have some promise is the country of india. that country with their large

population that keeps booming, that could be a good avenue for our soybeans to go into. alix: what is the hardest part of being a soybean farmer in illinois? >> oh, my goodness. that is a good question. right now, it is really the uncertainty of whether we will be able to sell our soybeans at a fair price. that hits home for a lot of us. we got hit hard with the talks of tariffs coming out. we all took a 20% hit to our incomes. it wasn't anything we did as producers. it was just regulations and some policies that were made out of washington. we are receiving less than what the receiving point is for bushel of beans. we are still under that. a lot of us are trying to look

at different value added markets we can sell our soybeans into, trying to find ways to cut costs but still make a bit of extra money. alix: this is not the first time that farmers have been hit with a downturn. what is different today than other downturns? >> what is different today is really the one piece of policy legislation has affected farmers across the country. you'reor the value add talking about -- what are those? >> in thecase of my family's operation -- in the case of my family's operation, they are looking into non-gmo soybeans or other avenues that can receive a premium. that's one way my family has learned how to cope with these lower prices. alix: for your capital

investment decisions, are you able to deploy capital? are you sitting on money that you can put to work once you get clarity? >> a lot of operations are a lot like mine. we hold off on taking big purchases, trying to keep the combines of tractors rolling over and trading in the smaller .ieces of equipment it's easier to upgrade one small piece of equipment instead of trading for this big purchases --ch you can swing right now these big purchases which you can't swing right now. alix: they have recouped some of that, but the smaller farmers are getting more benefits -- it's creating animosity between the farmers over what subsidies

-- david: the president may keep those tariffs in place. alix: still with us, francisco blanch and christopher j. wolfe. what did you make of that? i think the sector in the u.s. has gotten hit -- it's brazil, u.s. and then china on the consumption side. if china retaliates, it is going to hit where it hurts. ultimately, the u.s. has another angle here. the u.s. is becoming the number one energy exporter. becoming energy independent and the fourth quarter of last year -- in the fourth quarter of last year. be keepingems to

washington with a different layer of sway over many trading partners. that's hurting the farmers. we will end up paying a lot of money into the energy space. upx: how do deals end working out? between the u.s. and china in general. there seems to be the approach of we are the big boy we will get -- the big carrying the big stick, we will get others to follow. there's some indications in washington that the u.s. and china will sort things out before march 1. i expect some relief in the markets for the industrials companies. volatility driven by politics affects capital

investment decisions. that is a long tale. it's not like there will be a big capex wave after march 1. we will see an approach that reflect this reality that volatility has brought to the cfo decision-making. david: the u.s. position on oil has given it more bargaining power. does it offer a solution? liquid natural gas -- liquid natural gas is something china needs. that could help balance the trade deficit. francisco: energy independence also means more energy interdependence. we are getting more tied up whether it's through lng or gasoline or diesel or crude oil. there's a lot more trade going on as the u.s. exports it

surpluses.- its we are becoming more interlinked. we will see that over the next few years. the excess supply and energy really helps the consumer. that keeps a lot of consumption dollars in the system. david: more interlinked, francisco says. the president seemed to be saying let's pull off of the globalization a bit. blip --a temporarily temporary blip along the way? christopher: the policy is america first. the corporate sector has looked at ways to manage costs and profitability. we have gotten to a tightly linked system. dominant, the be more we will want to share that production globally.

the corporate sector may be the way forward. david: christopher j. wolfe and francisco blanch, thank you for being with us today. coming up, the best in the business. how three hedge fund managers edit $3.7 billion to their personal fortunes in 2018. this is bloomberg. ♪

viviana: this is "bloomberg daybreak." theng up in the next hour, for bain and

company. taylor: when warren buffett speaks, the market listens. red hat, increasing that by 4.2 million shares -- purchasing glencoreion shares of energy. of course, shares of oracle falling after he cut his stake. he has taken a more cautious approach on tech companies. i want to talk ge. that massive industrial company that has seen quite a volatile last few years -- t rowand fidelity still bullish -- t. rowe price and fidelity still bullish.

utilities filing for bankruptcy pg&ecific gas and co, really volatile. companies adding and hedge funds subtracting from that. they sold ge and pacific gas and co. you have copies like bridgewater coming in and saying they still this is what makes markets. field to same kind of that, some superlatives here -- the 10 best hedge fund managers made to $10.7 billion in 2018. you have jim simons of renaissance technology, ray dalio a bridgewater macro, the manager of said icitadel. david: what i find remarkable,

their track record over time. bridgewater, they just keep knocking it out of the park. alix: investors are more than willing to pay the fees if you wind up delivering. the news has been so negative for hedge funds. for those who want to keep investing, it's a good thing. have more andes the have-nots have less. alix: exactly. david: other people are getting shut down. alix: some of the numbers here fortune simons' increased $1.6 billion. now worth over $16 billion. so is james simons. david: jim simons is

particularly interesting. he is a high-level mathematician. he has a huge foundation he has put together. it's taking that same meth medical approach and applying it to -- mathematical approach and applying it to medicine. he's really trying to apply what worked for him in to medicine. alix: the three top strategies are all different. if you come in and say macro is dalio, it wasn't. david: it's the person. alix: it's not the strategy, it's who is pursuing it. some nice, big numbers for you. $10.7 billion. david: something else you find fascinating -- what's going on

with ford motor company. a report overnight that ford will team up with vw. , ford's company z, g.m. already bought cru taking investments from softbank and honda. that's valley just under $15 billion -- valued at just under $15 billion. that's what bloomberg west reporting last night. -- bloomberg was reporting last night. the ceo says we have a ways to catch up. in the technology area, some companies, it's ok to be second. being first in tech is a risky business. this would be a significant move

by ford. alix: apple didn't like to be the first mover. they see where you mess up and then see where i fit. david: something the media puts a lot of emphasis on. there are some instances where you need to be first. be second.s ok to let's go to school on somebody else's mistakes. noting to bar find -- falling too far behind. race we are watching the when it comes to electric vehicles. much more coming up on "bloomberg daybreak: americas ." a market trying to end the week with some upside. seven.ures up by this is bloomberg.

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david: we will go now to charlotte, north carolina, where jason kelly and carolyn masters are joined by -- >> good morning. great to see you. we are so excited to be here in charlotte, so excited to be with amy brooks to kick off what is going to be a huge day in charlotte. what are we going to see today at the tech summit? >> today is our 20th tech summit. we will have a combination of players, owners, industry leaders. we have michael jordan speaking. he is the host of this great all-star weekend in charlotte. at&t, a lot of exciting people coming on. a combinationme

of great coaches, great athletes, but technology. you are working with intel, at&t. tell us about the role of technology in the nba. >> it's exciting for us because only 1% of our fans globally will ever come to a game. you have to learn technology. it is such a global sport. our games are here. becauseery fortunate our players embrace social media. they are great global brands. we do everything we can to capture the emotion around the game and send it out globally. >> the nba has done a phenomenal job with developing those players, giving them a bit of space. how do you balance that? you have big personalities with a massive social media footprint in some cases. >> we see our games on tv as

meals and social media content as snacks. our players are developing content and our teams are developing content. to engage fans globally every way we can. that's different platforms and testing and learning as part of that. >> traditionally, you go to a game, you have men and women, you have e-sports and streaming. where's the growth potential? >> the engaging side of the 2kadcasts -- we have our nba league broadcast on twitch, rg league, we are allowing people to vote for the mvp, who then comes and takes fan questions. >> they talk about e-sports

being a billion-dollar business -- >> we see it as a great way to engage our fans. we see the potential of having e-sports teams internationally. we see that as a fantastic opportunity. >> you were just in china. talk about that as an opportunity. what are the challenges? everyone has a china strategy. >> 300 million people play have 400 really people who watch the nba there. affinity of at the people loving basketball -- the challenge is how far away it is. we are focused on how we capture that market in unique and different ways. love consuming nba. >> it's interesting, prepping for this, you have a lot of

owners who come out in a political, social activist world . how do you balance letting players and owners of teams express their opinions with managing a huge industry? >> it's important to give players and owners but especially our players a platform to use their voice and speak out for whatever cause is important to them. we want to make sure they feel supported. obviously, diversity is a core value of the nba. we want to embrace our players and enable them to freely speak. >> talk about the wnba and the opportunities there. where you see the most growth. >> it's important to me, especially as a woman, that i embracesa league that and all women league. in today's society, it is primed

for capturing a new audience for people who care about progressive women and what women are doing on the court and off the court. you started doing sponsor logos on uniforms. where does this all go? >> we call it the jersey patch. we launched this last season. we now have to any that have a partner on their jersey. we didn't know who was going to come, how this was going to work. we now have two thirds of these partners are brand-new to the nba. fantastic brands like disney, most ofey davidson -- these companies are based locally in those markets, but they are global brands. >> one element that comes to the , it is a totally different

post thent now decision by the supreme court -- >> it's happening already. we just want to embrace it and make sure it is regulated in the right way. for us, we see engagement as the opportunity. when people engage with fantasy gaming, they watch for three times as long. >> you mentioned data. every industry we talked about nowadays is pulling in a lot of data. how do you guys put data to work in the nba? >> for us to know personal things about fans who we can segment and target is important. we are fortunate to see across all of our fans as well -- we want to enable you to reach the right person with the right

message at the right time. that's been a priority for us in learning as much as we can about our global fans. we talk about our global fans. we see a day where we can offer targeted products. targeted products to fans in different countries. we have 180 international players. how can we utilize that global strength to deliver a fan in france something more customized during >> going to send it back to you guys in new york. alix: great to see you. you can tune into jason and carol on bloomberg businessweek every day. they were great lineup all day today. ♪

alix: u.s. trade negotiators meet with china's president xi as high-level talks continue. the delegation will head to d.c. and the next push for win-win agreements. goldilocks, deal, and a wall. dealdent trump will sign a and use emergency measures for his border wall. and amazon versus new york. amazon pulled out of queens. david: welcome to bloomberg daybreak. i'm david westin here with alix steel. we come in with a shot at the white house. to president has managed make sure the center of attention is on the white house. also emergency order. in the meantime his delegation is going back next week to negotiate trade. in the markets, here is where we sit. it has been an interesting week.

.3%. be futures about softer after the rally we have seen. that is trade worries. all of that percolating in the market. euro-dollar up .3%. -- arestion remains as you a dollar bull or a dollar bear? a lot of turmoil in the fx market. in the u.s., yields moving higher by one basis point. crude up 1%. the best week since october for the commodity, up by almost 5%. david: wheeling and dealing. president trump is expected to sign that funding bill. it will keep the government open. the spending package only gives him about $1.3 billion. the president says he will now declare a national emergency to get an additional $6.6 billion for his wall. joining us is marty schenker, bloomberg chief content.

we thought it was the art of the deal, this is i'm going to have my way no matter what. he did not get 5.7, he said i will take eight. >> we make fun of the u.k. and brexit dysfunction. we went from shutdown craziness and now we will go to a new phrase -- a new phase where he will be challenged on constitutional grounds and that will be something we will be talking about for weeks or months. david: we have congress, we have the white house, now we will get the courts involved. marty: it is a fascinating question. the legislature has seated more authority to the executive have thed out we democrats owning the house of representatives they have decided to take a stand and there is a strong argument for it. david: if you talk to people on the hill they say they are seated more authority to the president in trade.

president xi says they will go back to washington, things are constructive. what do you expect in washington? fact thathink the president xi showed up in the talks in beijing is a good development and their assessment they made progress. it is clear china once a deal. there is a waiting game going on to give the trump administration enough to declare victory. then hope for a change of regime. would we dowe without you. our chief content officer at bloomberg. don't miss our coverage of remarks from president trump's at 10:00 eastern time on national security. that will be live on bloomberg tv, radio, and online. alix: joining us are sarah hunt and jim o'sullivan. staying with trade. as your base case changed at all in the last week based on what we heard out of beijing? sarah: once you started hearing

rumors xi was going to join the talks that made people think there was an opportunity before the deadline. before that people looked at the deadline being pushed out. both sides are trying to make it so we get something done. the markets are now expecting that to happen, so something does not happen there could be a disappointment. alix: moving from china, the auto tariffs are still in question. irrespective of what happens with china, will it be a material boost or a catalyst or less bad news. the big issue with trade negotiations is confidence. on days when the headline is the process for a deal goes up, the equity market goes up, and vice versa. that is the biggest influence at this point. the direct effect on trade flows is not going to be that big a deal.

important tos confidence on wall street and ultimately on main street and corporate america when all of those things go together. to the extent even if it is just an extended truce, i think we will not get a big deal in two weeks, but more than likely we will get a truce extended. it does not solve everything, but it prevents escalation. david: we focus on china because it has taken so much of global growth. we got numbers overnight of ppi that were disappointing. it was not deflation, but it was coming down. how much of their problem is trade, and how much is inherent in what is going on in their economy? sarah: i think it is a combination. part of the problem globally as we have overcapacity which is why we are having so much trouble getting inflation globally. part of the issue when you see things slowing down on a global

trade basis is it exacerbates the problem underneath. china has other issues with their own credit system. they also would like to get something done because they do not want this overhang or something else that will be a drag. alix: when it comes to spreading the disinflation worried globally, you can see that play out. the blue bars are china ppi and the white line is u.s. ppi and the other line is euro area. disinflation is going to be exported out of china, or two, credit growth hit a record in january as they tried to reflate. where do you sit? about thating i say chart is there headline numbers. ,he ups and downs in inflation it looks like energy prices in particular, oil prices have fallen recently so we are now seeing the headline numbers drop below the core numbers.

cpi that just came out, we had 2.2% for the core, which was unchanged. the headline number went down to 1.6 from 1.9. a lot of that is the ups and downs in oil rather than underlying trends. that said, certainly to the extent there is weakness in inflation globally, that does feedback to the u.s. to some extent. this morning we get the import price number. the headline tends to be dominated by oil prices. it will likely be negative again because oil prices and gas prices were down. included in those details, there are country numbers, including from china. the import prices from china are basically zero. they are not strong, but it is not like you're getting massive deflation. states,n the united stick with core. as the bigger risk deflation or inflation? sarah: deflation -- jim:

deflation is negative. we're a long way from deflation. core cpi is 2.2%. i think we are a long way from zero and negative. it would take recession for that to happen. not that there is anything out there to suggest inflation is about the store. the wage numbers are drifting up and that is consistent with stronger core numbers over the next year or two, but the idea of deflation is pretty extreme. that would require a recession. alix: disinflation. jim: is it plausible the numbers go back down or backup? i think they're both quite plausible. the extent the wage numbers are going up, that is an argument pushing up. the extent global growth has weakened, there are pass-throughs for quantities to other items. the net of it is there is not a lot of change on the core numbers over the next year.

more likely with wages we drift up slightly rather than go down but i would not expect a big news. alix: sarah hunt of alpine and jim o'sullivan. both sticking with us. earnings season winding down. what it means for your portfolio. this is bloomberg. ♪

viviana: this is bloomberg daybreak. malaysia will extradite former goldman sachs banker to the u.s. to face charges linked to a scandal.

the former southeast asia chairman at goldman has pleaded guilty to u.s. charges including conspiring to launder money from the troubled state fund. billionaire george soros cut holdings in archer gagnon -- archer daniels midland by more than half. the decision combine -- the decision coming after adm suffered its first earnings miss in every year. adm profits falling in the absence of chinese purchase of u.s. supplies and adding to a glut of ethanol. shares falling the most in a month due to -- the chinese government is taking a tougher stand on capital outflows. investors fear that may hurt revenue in the world's biggest gaming hub. that is your bloomberg business flash. david: nearing the end of the latest earnings season. here with some of the results is taylor riggs. taylor: let me bring you one first. brands missing.

billion versus6 estimates of $1.8 billion. the ceo is saying that despite an ongoing negative impact, inflation and tariffs, we are looking to increase those gross margins. the market not buying it and shares are up almost 14%. i want to look at some of the other movers. pepsi and nvidia are gaining in premarket. flip up the screen. i want to dive into pepsi more. they are higher despite the lower profit forecast. analysts see this is a one-off cost tied to a plant restructuring. finally, we look at nvidia going forward. it has been a turbulent year or nvidia. finally they are saying sales will rebound in 2020.

they have to clear out the inventory, the gaming chips, we do know there is a massive oversupply. if they can return to growth in 2020 that would be ahead of analyst estimates. alix: earnings season almost coming to an end. the possibility of an earnings recession. >> we are cautious on this rally. >> it is a high risk rally. >> markets discounting things that do not look like economic reality. they are readjusting for the risk that there is more downside that upside. >> the whisper number for earnings for this year is around 0% to 2%. we think that has the potential for upside surprise. >> i agree we are in an earnings recession. i think s&p earnings to be down 10%. >> the sector that is done well this year's industrial. things are not as bad as the christmas eve massacre. are the places we

think are likely to surprise on the upside. >> slowing is baked in. >> we are confident something will happen in the next few days. markets generally top positive news, not negative news. alix: still with us is sarah hunt and jim o'sullivan. mark looking for a top, others it is not as bad. where do you stand? sarah: growing rapidly through 2018. the last quarter of 2018 things slow down. we are looking at projections for earnings cannot really be up until the fourth quarter. yet the second derivative there of changes negative. that tends to not be a positive thing. we have snapped back so much since december. i think it is not as easy to say which way it will go. i think we are going to get decent news out of trade. i do not think we will escalate. the question is what is left? we have the fed.

we do not have a government shutdown. we get a trade deal. now you have to see earnings growth for the market to say it is worth another like up. david: we have tough comparables. last year was 24%. you cannot keep that up forever. how much is underlying economic greg gushed economic strength? was boosted by the tax cut. some estimates say the way that work is a negative. not just the positive. s&p 500 profits depend a lot more on u.s. economy. the global economy is disproportionally important. theextent the rest of world, global growth if anything is slowing more than u.s. growth. that is a negative. the oil sector is disproportionally important for the s&p 500. we saw that in 2015.

went oil prices go down disproportionately, that is a negative for the s&p 500 even though for the economy there are pluses and minuses. u.s. closed -- if u.s. growth is slowing, there are reasons to think profit growth will be weaker this year than last year. i do not know the specific number. i think even with 2% gdp growth we get a little bit of profit growth. alix: sarah hot and jim o'sullivan will be sticking with us. amazon breaks up with new york of valentine's day. we speak with a broker. this is bloomberg. ♪

david: it is time for the bottom

line. only one company everybody is watching. it is amazon. we welcome patrick smith. thank you for being with us. give us a sense. this is long island city across the river from manhattan. give us a sense of what this decision will mean for that area in terms of real estate. patrick: after the amazon news was announced november 5 we had an increase in contract activity of 181% compared to the same pluto a year ago. -- the same pluto -- the same period a year ago. the amazon affect was real. the good news is this was already an amazing neighborhood that was rezoned 10 years ago. a 28 yard waterfront park. an excellent public school. we think the future remains bright. david: this is an important

point. that area was coming back and resurgent for amazon did anything. we'll put up a graph that comes from the numbers you gave us. there were sales of condominiums and what the price was per square foot and what the change was. in most years, sometimes you had double-digit growth before amazon made this announcement. patrick: the reason for that is we are at such a discount to manhattan. there's a great quality of life here but from a real estate perspective, buyers say what can we get in manhattan and they realize they could get more space for less money if they come one subway stop, a five minute stop to lic, which has a more small-town feel compared to manhattan. we have had excellent growth. alix: does that continue? do you see this amazon news is a blip or will you see prices come down?

patrick: my prediction is we will have -- people were projecting the long-term growth rate going forward with amazon would have been supercharged. i think that goes way and we revert to the historical growth show which as your charts was very good. david: as someone who is involved in real estate in new york, what are the lessons that could be learned from this? who could have done this better? new york or amazon. did amazon overreach? patrick: i think governor cuomo did a great job and lending amazon. when a councilman and new york state senator came out in opposition of the project , the governor was left without anyone on the ground in queens who could advocate for the project or effective compromise. that was the first problem.

the feeling in long island city among some is we lost the most in to begin private partnership in new york. there are people celebrating the news. as a resident of queens and a supporter of amazon i thought amazon would've anticipated some of the opposition and would've been ready to compromise. 500 millionedged dollars last month to help with the housing crisis in seattle. not amazon's responsibility to solve new york city's problems, but i think there was a once-in-a-lifetime opportunity in long island city for amazon to become the gold standard. david: is it over? is amazon gone. patrick: i think we have to go they are auming serious company and they would not make a declaration without being committed. i think they are gone. new york city has

dealt with much more serious situations than a tech company reneging on a proposed deal and i think we will continue to innovate and be the best city in the world. alix: patrick smith, thank you very much. also with us, sarah hunt of alpine woods. what this did speak to me as the tech clash with politicians in d.c. and the overhang and the perception versus the company. how do you view something like that? sarah: is a top thing. if you look at the west coast with companies like google and how high expenses are and how the optics of, this, the fact they were getting a tax break, and the timing of discussing it and the fact that you flipped the senate in new york and ended up with different people and players, the fact that none of that was baked into the possibilities and they did not want to negotiate and they were willing to say we are not going to do this at all, i think it is a tough look for anybody.

i do not think anybody came out looking good. for a city like new york to have more jobs and people making a good amount of money is not a bad thing. i also think new york is a great place to work. there is that tension between how much do we offer people to come and it is still great city and people want to work your anyway. amazon has already got a bunch of people working here. they said they will increase those people. they lost the headquarters but not the company. alix: washington versus wall street. we discussed the battle over corporate buybacks after they search to a record in 2018. this is bloomberg. ♪

alix: this is "bloomberg daybreak." and equity rally underway after falling like tensions

between the u.s. and china. trade talks will continue. in other asset classes, you're looking at a dollar that is still relatively strong on the day on those better conversations out of the trade talks. you see a little selling on the margins in the bond market. just moments away from a data drop in the u.s.. import numbers for the month of january on a year on year basis. down 1.7%. that was worse than estimated. quite a big fall on a month-to-month basis, down .6% -- export prices month on month coming down .6%. oil prices had an interesting january to say the least. there are still down about .7%. the story that we saw over in in the u.s. as well. david: i wonder there's

exporting or a parallel decline in prices for producers. alix: the move in the markets we saw before is continuing. the dollar moving higher, bond yields moving higher, in particular when it comes to the long end. are sarahll with us hunt of alpine woods and jim o'sullivan. jim, you look at numbers like this all the time. what to the numbers tell you? jim: as far as the import numbers, a lot of that is commodities. natural gas is quite weak as well. a very mild january. zero -- you are asking about china. the import prices in china were down .3% on the month and .6% on year-over-year. that is weaker than we have seen in previous months. are seeing weakness there in terms of prices from china. there is weakness there. the consumer goods prices are

still up a little bit year-over-year for the u.s. there are weak numbers. on the growth side, we did get a positive new york fed survey. the headline index went from 3.9 to 8.8. a little bit of a bounce there. david: and new orders for that. and 3.5. not huge numbers but a little bit better than we saw. i think a lot of the weakness we saw for january was probably the shutdown effect and reaction to the drop in the equity market. i think we are getting relief on that front. we will see that at 10:00. the capital spending number was strong. in the new york fed survey it jump from 17.9 to 29.3. that is a reasonably positive number. alix: speaking of capital

spending, the question with d.c. versus wall street, a lot of criticism of buybacks crossing the political aisle in washington. democratic senators schumer and sanders wrote we are so focused on shareholder value companies have been dedicating ever larger shares of their profits to dividends and corporate share repurchases. then you have republican senator rubio saying i do not want to outlaw stock buybacks, but they should not receive beneficial tax treatment. the blackout period for buybacks is ending and companies have announced a hundred $40 billion worth of buybacks, up 28%. still with us, sarah hunt and jim o'sullivan. what is the market demanding from these companies in terms of their capital allocation? sarah: right now you're getting rewarded for buying back your stock. the company's should be long-term doing this -- the company doing this long-term

tend to be rewarded over time. the question of capital allocation, what struck me about that chart was 2007 to 2008 was a high bar, which looks like where we are going. when the market collapsed, people were not buying back their stock. people tend to buy back stock when times are good. that is telling you you do not have a lot of other things to do with their money. as a shareholder, you want some discussion about what the other possibilities are for the cash before buying back stock. i would agree the tax treatment should not be preferential relative to other things. david: the question is what else to do with that cash? democratic senators are saying we would like you to pay up to workers, and also saying it should be invested in capital investment. that is what the administration's theory was. corporations would invest in capital investment. if we discourage stock buybacks, is that what will happen? jim: not necessarily. the decision on capx has to be

what is the return on your investment. corporate tax rates are lower than the after-tax. company has a dollar in their bank account for they have to go out and borrow at and a low interest rates does not -- if you put a dollar in -- youket of individuals get a lot of fiscal stimulus when you have individual tax cuts. for corporate tax cut it is more about incentives. when you put a next -- we put an extra dollar in the bank account corporations, it does not mean they invest in. at 2018, 2017, business investment was up 5% or 6%. year, 2.5ound 3% last the year before. we have had decent business investment and a lot of it was

before the tax bill was signed. are we getting as much business investment increased as profits went up and has cash flow went up? absolutely not. is interesting you mention what they wind up doing in terms of growth. ahead front survey from bank -- a hedge fund survey from cap of america -- from bank of america came out. what they want companies to do has been falling but including their balance sheet is a 10 year high. and if theed thing rate stopped going up and we have a pause in the fed, does this survey reverse? sarah: i think it is a fed thing. if you look at the recession, how many companies were caught with debt they cannot refinance? as rates were going up there were a lot of people borrowing money because rates were low. if i see a trajectory of rate increases, and i'm a cfo, i will say it maybe i will rearrange my balance sheet. i need to roll over a bunch or

do not need to worry about it. i think now that the fed is on pause, i'm not sure the orange line will continue in the same trajectory. i do not think it goes in the other direction. people are starting to think if you get a weaker economic outlook and things are starting to slow down, i want to balance sheet that can weather that. to your point, if you look at companies like ford that have to invest a lot but the are ioc will be a way out. they are spending a lot for future growth but they are getting creamed in the market and are getting rewarded for that. david: the flipside is an amazon or facebook. they can put a lot of money on their balance sheet and there's not a constructive way to deploy it. , is general matter corporate leverage an issue for companies? is it restraining productive growth? jim: we have seen a bit of a backup in credit spreads over the last couple months as part

of the turmoil in markets. ultimately the constraint is it markets are penalizing companies for having get an easy credit spreads go up. those spreads are still low so for the most part that is not an issue. that is a risk that is out there and the fed has highlighted leverage loans in particular as a risk. it does not seem to be a factor causing the economy to slow. david: many thanks to sarah hunt of alpine woods and jim o'sullivan. good to have you both with us. now we turn to viviana hurtado with first word news. viviana: president will reportedly use unilateral authority to spend about $8 billion to build physical barriers along the u.s./mexico border. the president's emergency declaration will redirect funds from defense department and treasury budgets. he will at that money to the nearly $1.4 billion for border

spending in the spending bill he is set to sign today. two weeks is how long theresa may has to her brexit deal. voting down the prime minister's plans to renegotiate the divorce from the eu. that stripped her of a mandate to demand changes to the irish border backstop. will meet with the eu's chief negotiator in brussels on monday for more talks. india's prime minister has vowed revenge for the deadliest terror attack under his administration. he says his security forces cannot decide how to respond to yesterday's assault at a convoy in kashmir that killed 300 paramilitary personnel. under pressure to approve a military response against pakistan after terror group there land responsibility. 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 viviana hurtado. this is bloomberg. aroundarkets on the move

the highs of the session for the s&p futures. optimism in china but then you also had the data dropping in the u.s.. the manufacturing survey coming in strong. new orders doing well as import prices continue to roll up, are we in that continued goldilocks scenario? euro-dollar at a three-month low as the dollar picks up a lot of steam after the trade numbers. coming up, health care thrived in 2018 despite a weaker market. more on that. this is bloomberg. ♪

viviana: this is "bloomberg daybreak." open." mike "the

wilson, global equity strategist. david: time for follow the lead. this is a deep dive into the stories making headlines and moving markets with key insights from into see veterans. 2018 was the year of turmoil for stocks across the board with one big exception. that is health care. this is not the first time health stocks of outperformed a turbulent market. our editor, matt winkler, has gone through the numbers. we welcome him now. a fascinating piece. take us through it. you looked at this six ways to sunday and it all comes out the same. matt: it surprised even me. with all the noise in the markets, is there one sanctuary and have we been there before and what is that? we decided to go back as far as

we could on the bloomberg, which is three decades, and we found out that time and time again, no matter what the. , -- no matter what the period, whatever the turbulence, it comes back to health care. we said why is that the case? the big reason is we are getting older. it is not something i look forward to, but us boomers are getting much older and because we are getting older the demand for health care related services and products goes up exponentially once we turn 65. then it goes up another order of magnitude at 75. that is the trend we are in. what that means is you can have political firestorms, which we are witnessing now. you could have trade wars, which we are witnessing. you can have all kinds of turmoil like slowing growth around the world and there is one thing that will be a constant. that is health care. david: i need more health care

today than i did 20 years ago. it is not just the sector overall. we have talked to people around this table saying health care is the place to go. you look at mutual funds who concentrate on health care, different ways to invest, they all had a banner year. matt: let's take fidelity. it had the number one fund of the big mutual funds investing more than $200 billion. fidelity had three top performers and they were all health care. different ones, the big one was medical devices and technology. that was the number one fund with a very substantial return. even general health care did very well. this has been a mainstay throughout the 21st century. alix: matt winkler, bloomberg editor. joining us from washington is dale stafford, ahead of mergers

and acquisitions. they just them out with their m&a report that 2018 delivered strategic deal values. shine the spotlight on 2019. will be the biggest theme for you? >> at bain we think there are couple big developments that will define 2019. those are the rise in scope deals and capability deals. let me double click on each of those in describe what those are . when we are talking about scope deals we are talking about situations where our company is newng into a new market, a business model, a new product for they do not have a position today, where there are principally trying to achieve or goose their topline growth. capability deals are ones where companies are buying into an entirely new capability that they do not have internally today that is going to allow them to grow faster. we think the 2019,

biggest development we will see is the continued increase in scope deals and capability deals. jonathan: the question for me is why? is it because growth is so hard to come by? is it because the environment is getting better where you can buy growth in that way or will it be activist investors or private equities advocating for something like that? dale: all of the above. as you've talked about on this broadcast recently, in europe growth is slowing. if we pan back and look not just over the last year or the next quarter but over the last 20 years, what we find is that for publicly traded companies, revenue growth has been hard to come by. the average growth rate of publicly traded companies has been decelerating and declining over time. the natural antidote to that is that companies look into the m&a market and look for new products

, new categories that are growing faster than their core business in order to drive that growth. david: that is good news for scope members. in your report you point out there is some suppression of interregional, that is to say global sorts of m&a because of geopolitics. dale: that is exactly right. there has been and will continue to be a lot of scrutiny on cross-border deals. u.s. whichin the scrutinizes cross-border deals, and the analogous agencies for the eu and australia have been particularly critical of cross-border deals. what everyone is most anxious about is china, making sure critical technologies that western companies and the western governments do not lose control of critical technologies for the chinese. alix: dale stafford, thank you

so very much for joining us. been reporting, amazon has broken up with new york and is pulling plans to build a second headquarters in queens. said ar andrew cuomo small group of politicians put their own narrow political interests above their community. the new york state senate has done tremendous damage. they should be held accountable for this lost opportunity. bill de blasio said we gave amazon the opportunity to be of gas to be a good neighbor and do business with the greatest city in the world. amazon threw away the opportunity. we are pleased to have democratic governor phil murphy of new jersey who says new york's loss should be newark's gain. newark was in the contention originally. i saw that when this news broke, it was not long before you are out saying newark is open for business. amazon said they are not interested in a second choice. is there any hope they could reconsider that? >> i think it is too early to

tell. newark was a serious contender in the last 20. many would say it was on an even shorter list the first time through. it is a compelling story that has only gotten more so. newark is a city that has the bones. we do not have any of those land-use issues they had to deal with in long island city. more importantly, it has a great location, enormous talent full. we are a state of innovation in terms of her own economic dna. lots of compelling reasons. mayor is led by a great could we think we have a lot of the pieces of the puzzle. i think it is too early to tell. i cannot speak for amazon but we think newark is a compelling spot for them or others thinking about a similar decision. david: i quoted from the governor of new york, mr. cuomo

and mr. de blasio, the mayor of new york city, with very different interpretations. stateat is the legislature's and another that it is amazon's fault. as you look at this, have we gone too far? have we seen the high water mark of states and cities making concessions to wealthy corporations. have we seen the high water mark of making their concessions? did they go too far? gov. murphy: i cannot say with certainty on new york. say with new jersey, we'll is one of make sure whatever deal we strike works for our residents and our kids. amazon has presented itself over the past couple of years as a once-in-a-lifetime opportunity with his hq to notion. we felt we would put a package together at the state level and at the newark city level that worked, not just for them but for us most importantly. we still have that welcome mat out. new works story has got --

newark's story has gotten more compelling. i think it will work for both sides. we had a proposal with amazon that would do that. i think in many respects we're a logical spot for them. deep talent pool. the highest concentration of scientists and engineers in the world. i mentioned work -- i mentioned k's work -- i mentioned newar story is a compelling one. many ways an arrangement could work. alix: it is hard to look at what happened with new york and amazon as an isolated event. there will be pushback from wealthy companies coming in and getting breaks that will hurt taxpayers. how do you deal with that? what kind of concessions do need to make your actual taxpayers? gov. murphy: if the arrangement only benefits the company, that it is clearly one-sided.

you'll logically get pushback and rightfully so. not just in the incentives but land-use, which is not as but byus as incentives, our telling was a big piece of the breakdown in new york. we have none of that in newark. we have the bones -- the ability for a company to come in to employ folks were they can live their and not have to force people to the margins, which we will not ever do. i think it has to be balanced. i think newark and new jersey have put forward to amazon something that was in balance. that is why the local leadership and the state leadership were supportive. we did not have those fractures because it was a fair deal not just for them but for us and for newark. david: let me ask about those fractures. we have already heard from governor cuomo about the difficulties he has had with his state senate. where did they go wrong? was it in not having state

support. we had a developer on saying the problem was governor cuomo do not have support from local politicians. would you have that support in newark? gov. murphy: i cannot speak to long island city. we do not have that issue in newark. the mayor has been extraordinarily supportive. his city council, the local interests in newark have been very supportive of an arrangement with amazon as long as it was fair. we have long ago presented something that is fair. i would say the same thing at the state level. i'm not an expert in what happened in long island, but i noticed level of support in new york and new jersey and it is high. press statement amazon said they are not interested in a second alternative. you said that might still be open. are they returning your phone calls? gov. murphy: we have a good relationship. i do not want to speak for them. i did -- i want to make sure i'm not getting ahead of myself.

we have a good relationship with amazon. they already employ thousands of folks in new jersey. we have a very good relationship and we have good exchanges throughout this process, even respecting their decisions to go to virginia and new york. we never stop speaking. that will continue to be the case. while it is early to tell, i want to make sure the world knows that they know that everyone knows the newark story remains extremely compelling for amazon. is there a plan b for newark? gov. murphy: newark has a lot of buzz. even when we did not win in the first round of the amazon hunt, it was quite clearly in next ordinary positive experience that sharpened the story. the investment is high, the location is extraordinary, the talent full, the infrastructure, it has a lot going for it. the momentum is high. there is interest in newark

being expressed morning new and night. david: governor, thank you much for your time. new jersey governor phil murphy. alix: in the markets we are continuing to see a risk on rally. trade, president xi saying progress has been made. trade talks will continue in the u.s. futures around the highs of the session. european stocks getting a nice boost. if the u.s. and china can work it out, you would think the eu and the u.s. can work it out. stronger dollar story. that doesn't for bloomberg daybreak. coming up, bloomberg markets with jonathan ferro. mike wilson season earnings recession. this is bloomberg. ♪

jonathan: from new york city for our viewers worldwide. i'm jonathan ferro. the countdown to the open starts right now. ♪

jonathan: coming up, a political fight. the president said to invoke brought fire -- broad powers to build his border wall. president xi hailing progress, talks resuming next week. looking to stabilize further signs of economic week this. credit growth in china surging. good morning. we head toward another week of gains on the s&p 500. positive 12 points on the session, up point. up .4% on the day. in the bond market, yields up three basis points. in the ecb, cracks in the ecb's resolve. euro-dollar down. a little more on that later. we begin with what increasingly feels like groundhog day. another morning of positive noise around trade talks. >> we believe we are headed toward a negotiated solution. >>