premier speaking at a chicago booth school of monetary forum in new warrants a face-to-face. york. and cutting jobs to bring in a partner for the tax equity at 2:30 president trump will business. and silver lining for germany meet with china's vice president premier at the white house to grows. theth hit high investors in review progress in the ongoing trade negotiations. tomorrow, berkshire hathaway fourth quarter while consumer releases its annual report and spending and public spending rose. sentiment takes a big hit. warren buffett's annual letter >> welcome. to shareholders. eagerly anticipated. i'm david westin with alix let's turn to what is making headlines outside the business world. steel. the big news came over, kraft heinz. alix: they had to take a huge write-down. >> president trump has the face-to-face meeting with china's top trade negotiator vice premier. it is on basic stuff. like hot dogs, their basic seen as -- that is products. that: some of the brands assignment trade deals are making significant progress. they invested so much and are march 1 is when tariffs are said not worth much at all given what to more than double on chinese imports. has changed in global consumption. also, accounting issues the president indicating he may be willing to stop the clock and let talks continue. involving their acquisitions. alix: part of that acquisition the white house calls eight

-- david: warren buffett. attachment staying behind in alix: they orchestrated that syria a small piece -- peacekeeping group. merger back in 2015. he likes stuff he can use, that he can understand. david: gillette, coca-cola, a three-month delay to brexit things he knows. this weekend and tomorrow we negotiations. european union officials telling bloomberg they expect theresa may will be forced to request this. will get the berkshire hathaway annual report as well as warren the eu sees that as a technical buffett's letter. extension and would give british parliament time to pass we will see what he says about legislation related to the kraft heinz. departure. the two sides disagree over the irish border backstop. alix: a subpoena, disappointing quarterly numbers, then a write-down. global news, 24 hours a day on-air and on tic toc on twitter, powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. david: and you have a company that had all of its momentum david: thanks, so much. through acquisitions. the question is, what can they do other than acquire? trade war with china. the prospect has been hanging over markets almost ends the day they have taken the cost out, presumably. president trump took office. alix: if they are not, are we going to have to spin off, pare the question is it if things will get better or worse, it is down? what it all means. there is a lot to be seen

with kraft heinz. looking at kraft heinz bank of america said it thinks that a real trade deal could spark a rally in the s&p as much opening at a record low. overall it is a stronger equity as 10%. market up by 11 points. let's start with you. what will happen this afternoon? euro-dollar hanging in there. we have this deadline a week away. do we think we may have an we did get terrible data out of announcement? >> there is no question donald germany. ae sentiment really taking trump is like to cut it deal hit. with china. german gdp underlying resilience in domestic demands, but it is hard for me to think that there would be any language that would suggest talks with inventories dragging on german breakdown in any way. in thatet is priced growth. not a lot of movement in the currency market. in the u.s., a little bit of buying in the margin. they have some sort of agreement. crude up 5.10%. i think anything short of that .10%. would be very troubling. i think that the atmosphere is positive. david: he is running out of time. crude is taking it on the chin. find ant mean he has to david: we have breaking news, excuse to say this is why we will continue? >> that may be why he is meeting autonation announcing earnings this morning. with the chief trade negotiator for china. it is not a head of state. also, they have named a new ceo. he may be asking direct we know that deputy will be

questions. depending on those answers, he stepping down. we will be talking to michael jackson later in the program. may decide to waive the deadline on march 1. alix: what is a real deal with a they have named a new ceo to replace michael jackson. alix: they missed their lowest 10% upside? >> the real deal might not be as estimates when it came to easy to achieve. revenue and sales on their old that is rolling back tariffs from last year, which have vehicles came in late and sales on new vehicles came down 7%. shaved a couple of percentage points off of earnings growth. issue, auto tariff it would be open access to china loan issues, and slowing auto sales. markets. it would be some kind of resolution on intellectual property, the enforcement and protection of intellectual property. david: by jackson is trying to take that over, more used cars sales and away from new car it is a gamut of issues. sales. time for the bloomberg first take. the most likely scenario is positive in that they don't we will start off with trade. double the tariffs from last the big story of the day. but i don't necessarily president trump will be meeting in the white house. see them rolling back the 2018 i we seeing reflection and etf's tariffs. i think that is increasingly priced into the market. from trade at this point? alix: earlier it was mentioned the one thing not priced in his rolling back the tariffs. >> no one is expecting the

tariffs to come backwards. i don't believe they will. that is something markets have not priced in. what if they undo last year's tariff increases? >> we are seeing more of a risk on trend. it has been building over the last few weeks. you cannot pin it necessarily on the trade talks. that is something that i think we are seeing a shift out of could be very bullish. >> i agree. bonds into the equity market. last night we saw a short-term treasury bond etf that black runs. if you look at the earnings impact from tariffs last year we saw a reallocations early in the week from the -- from that was almost a full two vanguard. percentage points. will we see industrials get a if you look at the multiple compression in areas of the little bit of a bid? when it comes to china people market most hit by those are thinking more tariffs, we have seen the s&p optimistically, which you could probably been on this kind of meeting. alix: is that the right call? multiple compressed by almost a flows trailed the market. percentage points. and we -- almost eight this could be an indicator that things are topping at etf percentage points. and we have seen those sectors investors are putting things into stocks. have massive multiple when you look at the aggregate, compression's. doing that -- on that would be fixed income flows far very positive. surpass equities. david: if you are talking about this is something that happened a real deal on those issues, in the past week. putting up the five issues, after stocks are up 18% from their lows, which is disturbing, those are pretty fundamental things. right? no one is suggesting that

if the issue clears the market it is better for stocks going forward, but given the bounce in donald trump is going to equities already we have started negotiate the fine details of to price in a much better trade intellectual property transfers today. if there is a broad agreement environment going forward. the upside surprises it is not that these issues will be addressed they can take as much only trade but it could be u.s.-china relations which is an time as they want and the clear victory. one thing people are not even bigger generator of upside thinking about, and they should, because it has suppressed is if this china thing is expectations for the tech resolved you have to think about sector, for the risk tolerance europe and car tariffs. generally if we have the those are still on the table. geopolitical turmoil between the u.s. and china. europe, which is already weak, bilateral trade is only a could really be in trouble. portion. alix: i love that you bring that it has been holding back risk tolerance and we could see a up. upside if we suggest things are improving. at u.s. stocks alix: they're looking at cutting jobs, they're looking to find a exposure to china and earnings partner for the tech equity expectations, the war has been factored in. but not u.s. versus europe. business. the why is interesting. do you agree? this is like a year later affect >> if you look at stocks exposed to regulations. >> it is also a reflection of to china you see earnings cuts. alix: i can bring that chart up generally slowing growth. for you.

this is not coincident with the the white line is where we are fact that european economic with the tech companies in the blue line is estimates. >> if you look at multinationals conditions have slowed materially over the second half of this year. overall and particular retailers i do think that broadly with exposure to europe, and companies across the world need to cut spending. to europe weposure this should be perceived as a general positive. have not seen a strong of a downward revision. one of the first things that you march 29, you have brexit, their see in an earnings trough is companies cutting spending. it creates a margin turnaround which creates a earning big binary potential negative. i think a lot of the european has not been focused in. turnaround. one thing we have been watching for his you have to see companies rationalize their spending to improve the earnings. david: and this is them saying i think the market can only focus on one issue at a time. we don't say topline growth. right now it is trade. they say they want to cut 500 million euros. maybe after march 1 we can move on to the brexit -- all of the they have not announced anything, it is just a other -- exactly. possibility. their cutting thousands of jobs. david: is it european stripes or german stripes that is the big >> they would not be the first. one? use all the austrian chancellor bankave seen deutsche meet with president trump. he said president trump has a thing with germany. consolidate their workforce. they wouldn't be the first to go what does president trump have with angela merkel and germany? down the job cutting route.

simple as going out european banks are particularly hit by the slowing growth in europe. on pennsylvania and the seeing you look at the comparison with u.s. banks, rising interest the bmw's. he reacts badly. rates have been a little bit even though many are built in of a by and for them. the u.s. he still thinks that germany is taking advantage of between thetiation the u.s.. alix: no matter what, are we going to be looking at news for any of these? performance of european and u.s. banks have been significant. u.s. banks are down 8%, european it is still going to be -- >> i think if we don't get the banks down by 25%. david: we have numbers out for real deal, which is pretty tough to achieve, i would sell on the german economy for the march 1. fourth quarter. not surprising, it was flat. more important to go beyond that i think that what is priced into the market at this point is a they were up in everything fairly good resolution. except for inventories. it is essentially no new they are basically selling tariffs, but not a full inventories and automobiles. us about thes tell resolution on all of the issues. the markets have moved pretty quickly. trajectory of the german economy? >> it is an great. the knee-jerk reaction might be downward. does not gose this it has been backed up by the earnings stream. this is interesting data the well. and the president says we are not only going to keep the 10% european strategists have put tariffs, we are going to up the

together. the broader european earnings season is getting going. tariffs. what does the market do? we are in the thick of it. >> you could see a 5% to 10% earnings for germany are down downward move. thinking about the earnings hit, 8%. you have 75% of companies another 2% hit to earnings and missing expectations. board.cross the multiple compression. we have seen companies stall out on capex. a lot of the programs they have in place. the industrial space in the down revisions to have been particulars a point of preakness. that contrasts with the rest of europe. italian earnings are up 19% for the fourth quarter. pretty sizable. --much as the negative story if you start to see consumer and corporate confidence wayne, that exactly. as much as the negative stories could be as much as a 10% down being generated by germany there are bright spots in europe. worth noting is that europe has to the gdp. and that is immediate, not to definitely shied away from say what happens over the longer term. alix: thank you. europe as an investment for six may not bethe future months largely because of what is happening in germany, but there are bright spots. alix: there is a trade so bright when it comes to earnings. we will discuss what the market is pricing in next and where the resolution since domestic demand is doing well. you could argue for value versus upside is. this is bloomberg. ♪ value when it comes to europe

and how flows are being indicated. >> you look at the flows into the etf side the largest european etf, no one wants to touch it. it is the outflows. see if be interesting to that overrules sentiment changes. we could see bright spots. it is if people think about targeting the bright spots or if they are thinking about things across the region. we get lazy when we talk about these things come europe and em. these are different countries with different economics going on underneath. find some deals out there. -- you might find some deals out there. alix: we are keeping an eye on kraft heinz. that is looking to be opening at a record low in the premarket down 21%, writing down the value of its top assets. am accountingg subpoena.

if the sales can't grow, what will they do if they cannot merge anymore? that is a question you know that warren buffett will be asking. david: and news out of autonation, they reported earnings disappointing. they announced their new ceo. we will be talking to the outgoing ceo, michael jackson, who will remain as chairman. we will ask who was going to be the next ceo. table.stion is off the we have a lot to talk about about why he is the right person to succeed him. that is coming up at 8:30. alix: on trade talks, optimism. u.s. andng between the china. this is bloomberg. ♪

>> this is "bloomberg daybreak." shares of kraft heinz are set to open at an all-time low after plunging in the premarket. the giant company is taking a itse-down assets to some of best-known brands, such as oscar mayer and phil vida cheese. -- velveeta cheese.

cost pressures may lead to a big job cuts. the frenchas learned bank is drawing up plans to eliminate jobs in its investment bank and find a partner for the cash equity business. thousands of jobs at socgen may be in jeopardy. pinterest filed confidentially for a public offering in the u.s.. the search site is expected to seek a valuation of $12 billion. pinterest is working with goldman sachs and j.p. morgan chase. that is your bloomberg business flash. david: 90% of s&p 500 companies have reported earnings. has looked at the winners and losers sector by sector. >> first where we are in terms of valuation. individual sector still look cheap.

within the s&p 500 we are near fair value. our bloomberg intelligence analysts have that right where we are. discretionary, industrials, and financials are alix: president trump preparing trading below their p/e ratio. to meet the chinese delegation on trade at 2:30 this afternoon. a lot of the run-up in equity the question is, what is priced into markets. markets people don't believe in. taylor: after the run-up in equity markets since december a a lot of the riskier sectors have been lagging on a pe basis. lot of people thought we were at fair value. be 11% higheruld 14% of the financials are still if we did not have all of these trade headwinds.he was looking relatively cheap on a valuation basis. the safer sectors are trading at his proprietary model above. lued.look overva showing positive developments on trade have boosted the s&p 500 107 points. this comes down to some of the we are still lagging by 300 price reaction we have seen. points. that is amounting to an 11% loss as we look forward to where we go, you have the s&p 500 bottom out last quarter and this in market value. what gets interesting is quarter when he earnings-per-share really does bottom out. bloomberg surveyed a number of economists. they think we will not see analysts are saying we should

march. rise by rally if we return to growth in the second and third quarter, pushing the market higher. alix: thank you. we will get through the deadline without seeing tariffs increase. 18 economists think chart because it tariffs will rise through march. shows which stocks are cheap as 11 of the 29 think we will never all.ariffs rise opposed to having stable earnings and not having horrible earnings. >> it is interesting. if you look at the cyclicals are cheap. expensive. are the market is pricing in a significant downturn in earnings or even a recession. a lot of the optimism is playing through in the markets. one market is the industrial metal index, now at its highest going back since october. bank of america think that a what is interesting is if you trade deal could pull the s&p 500 to a record high if we get a look at the sectors with the substantial rally pushing it to 3020. healthiest ratio, they are morgan stanley saying the market industrial tech. might be too optimistic. that trade volatility is too low what is even more interesting is given all of the uncertainty.i companies missing earnings and industrials and tech are still outperforming. am calling this market cautiously optimistic on trade. david: thank you. a lot of this tells us that positioning in those sectors was president trump's meeting should superlight coming into this year. give us some read on how things are going in trade talks. cyclicals were left for dead by the end of december, and have

welcome now the oppenheimer done quite well. funds multi-asset cohead and alix: true. oftfolio manager and author industrials are the best performer. tech up almost 7% as well. "the case for dividend growth: investing in a postcrisis world." let's start with the base case. does that rotation continue? >> it depends on march 1. basically people are thinking put up their five back to the binary events of memorandum of understanding, trade, but i do think that some of the sectors are essentially architecture, overall understanding with ally-specific agreement. is that your base case, and what pricing in a more benign trade is the upside and downside? resolution. i think there is a slim chance that trade talks are even more negative. >> that is our base case. i think we see some form of we think we will get no tariffs resolution. but if we don't, though sectors on march 1. i we going to get the one and could take it on the chin. done resolution on trade talks? david: looking forward in a no. we will be able to move forward sense of what people are doing from this. right now, seeing companies isare cautiously optimistic respond to this sort of really but the market has been thinking. defensive move and what they're if you think about the low doing with their cash. for example, reducing leverage around christmas, the market has as opposed to buying things. been lifted by two things. the lift on fed policy and a >> one thing that we noticed in the fourth quarter and in the

first quarter that was dovish term. six to seven weeks in a rally surprising is that debt paydown sub stopped. -- paydowns have stopped. speaks for itself at a time when you would think that in the face the economic data globally has been weakening substantially. of the fed and rising interest i think this will be more than a rates they would be focused on rumor sell the fact type of their balance sheets. we have seen m&a activity tick resolution even with a good solution on this meeting. up significantly. i think less capex and share alix: the white line shows u.s. companies that had exposure to china. blue lines show earnings buybacks have been relatively divisions. healthy but less paydown of they have both been climbing higher. debt, and m&a. do you agree that you want to sell this chart? asid: that suggests ceos it. don't want to sell they look out over their rise and see hope that demand will pick up. i think the fundamentals beyond that they're going to m&a and the trade issue are still reasonably good for u.s. equity investors. not paying down debt that they the issue is that we were oversold raised on trade fears.those think it is coming. >> i think you're right. weeviating justify the rally valuation of stocks has gone to had. it is asymmetrical risk reward. a point where m&a makes sense. at this point, if you get the are opportunities to buy status quo announcement people it attractive valuations today. expect, that is priced in. i think that the debt stories a

one thing that was interesting big deal. not so much for the s&p 500, but about economists' expectations, for small companies. no one is expecting tariffs to come backwards. small stocks are sitting on record levels of debt, and that that is something markets have not priced in. could be an issue going forward. alix: kraft heinz, a big part of what if they undo last year's increases? that is something that could be that is what they took on to very bullish. grow. david: let's be more specific. when you look at companies , who iszing buybacks on the over side president trump says i will take off the 10%. how much gain? being rewarded? last year, paying down debt -- ithink you could have was rewarded. is a guesstimate -- i will throw maybe it is because the fed has walked back their hawkish talk. in a number, there's only risk there. it could be worth over one or maybe we are in a less scary two quarters 10% or 15%. environment from a cost of at that point, the modus capital perspective, and that may be why investors are not operandi of the market would be necessarily rewarding balance that you test new highs and sheet health. eliminate recession risks. has been rewarded strategically if the valuations the fed has already done a at which they are struck are dovish turn. tracked to. arear attractive --

>> i would add to the bullish argument that if the trade deal goes as well as we hope it to go, the issue that we need is attractive. financial companies buying back the in the united states. i believe business investments, stocks have been generally rewarded for that activity. you, so much. which has skyrocketed in the trump administration, complete she will be staying with us. coming up consumers and went away in late 2018. i don't believe i have found a justification other than trade investors sour on kraft heinz. shares plunge after the maker of war fears. oscar mayer bacon and jell-o you get some of the capex takes a multimillion dollar expenditure back into the market and the productivity increases could add a couple of innings to the expansion. buyback. that will be at the bottom line next. this is bloomberg. ♪ alix: we want to look at the rally we have seen in certain sectors led by industrials. do you feel that was because we were oversold and industrials rallied, or this is part of what you're talking about? >> i am being more big picture than that. it is broad economic growth that i think could come. it would constrain information constrain inflation pressures. you get more productivity and growth and it would impact all

sectors. david: i will not hold you to the 10% or 15%, but give me the under. is it symmetrical? i would say it is asymmetrical. if you unwind the constructive sentiment around trade policy you have to first of all close the gap between the market and the meaningful deterioration we have globally in the economic data. you find yourself in a situation talking about the u.s., but europe and china, that is were the biggest gaps have been. that is where the stimulus from china, we are waiting day by day to see the stimulus in the fall to creep through the data and it is not happening. in europe we don't know if there much more stimulus that we can provide. on foreign markets we have seen more downside. part of that will

transmit to the uso. if you want to look at where the numbers are, that is by itself at 20% gap lower. i think it is asymmetrical, which is consistent where we are from an acquisition standpoint and how late we are in the cycle . alix: it would be more reflationary few rolled back tariffs. with usb the place he want to be? or is that an em play and you want to buy europe? issuespe has other altogether. i think em would benefit immensely. e.m. has also benefited from the fed. selloff had this trade issue, but the fed was david: it is time for the bottom probably a larger factor from line where we look at companies our standpoint. worth watching. we're going to focus on kraft heinz. joining us is the bloomberg opinion is to columnist and the em world, if the dollar savita subramanian from bank of holds in place, for the dollar america merrill lynch. to stop increasing allows e.m. sentiment to come back and. i think the u.s. and em 25 plus percent down right now

and the free market. >> that is the breath of bad news we got. including less-developed -- the biggest is the $50 billion alix: stay with us. under u.s.that is coming up, the loss of appetite for kraft heinz, a record low on refrigerated brands, canadian retail, and the value of the some of its best-known brands. craft oscar meyer trademarks. by oneo cut dividend that is next. this is bloomberg. ♪ third. they will look at the stretchers. with this tells me is that this is a company with real balance sheet -- look at the strictures -- vestetures. this is a company with real balance sheet problems. they are looking at practices around procurement. they will increase the cost of goods sold or 25 million. that looks to be a fairly small number, but we will see how that plays out. how do you get this so wro

hot dogs? >> saying that we underperformed in our margin expectations won't be the filled, but you don't get these kind of breakdowns because of near-term underperformance. this is a major miscalculation. that gets to the heart of 3g strategy, the major investor in kraft heinz that orchestrated the merger. their underlying strategy was to do big deals to cut costs. the question was, is that at the cost of brand equity? you are seeing it does when you write down the value by $15 billion. david: is it the way that kraft heinz is playing the game or the game itself? goods, are they compromised because we have seen a change in how consumers consume packaged goods?

>> there are a lot of crosscurrents for the consumer staples industry.you have amazon, healthier trends , a lot going on. in general, when you see these larger write-downs -- and we need to remember it is a mega cap company so it will have big write-downs -- but even there it is a hefty charge.but we are starting to see is the end of easy environment for m&a moving into a more difficult environment where the rate is not zero anymore.that makes things a lot tougher . alix: that means for other reports next inbev week as well. that will be in the spotlight. companies that have a lot of kraft heinz plunging in debt to grow, will they pull it out or will it be another kraft story? the premarket. it is poised to open at a record >> the model of cutting costs low after writing down the value of its best-known brands like 15 using big deals to gain scale is under fire. point $4 billion. joining us on the phone is the

you can't do that if you don't bloomberg opinion columnist. have a growth strategy.i don't know the growth give us a sense of what strategy is for kraft heinz or ab inbev.kraft heinz has taken a happened. they built the separately big step that saying they -- step back with the help of warren buffett and it seems to be coming down all at once. saying they will reinvest in why so quickly? their brands. thee knew the strategy from you question, can they keep up the strategy? david: one of the most important start was shortsighted. things that i learned in it was about cutting costs and business is you can't cut driving earnings first that way. yourself to success. alix: you have to innovate like that meant investing internally would fall to the wayside. craft beer. they were focused on the bottom thanks, very much. line not the top line, but you can't cut costs into perpetuity. why investors crave individual we are seeing the damage of that. -- individual equities. they reported a write-down. we know they are being this is bloomberg. investigated into some of their accounting. we are seeing that the strategy does it work in the long-term and they will have to rethink it. in the food space that

copy that strategy, they may want to rethink as well. david: what about globally? not make as much sense of the packaged goods business globally? >> procter and gamble would say differently. the problem here was the numbers themselves. how does any company have the ability to write down and in tangible value? how mismarked can you be in this objective goodwill? for dividend growth investors like us we have to look at the balance sheet. we have to look at the real income statement. what has to drive dividend growth is what proctor and gamble's doing, operating cash flow. the made up brand value number is surreal. david: we get the letter from warren buffett tomorrow. will he address any of what is going on with kraft heinz?

>> i doubt he will. means his of this letter is probably complete and ready to go to publication. last year he stepped aside from the kraft heinz board. he is no longer shareholder. wondering what is warren buffett thinking and why is he so in admiration of this company when it contradicts everything he has stood for? alix: thank you, very much. the chopping block. the bank drawing up plans to cut jobs in their investment bank. this is bloomberg. ♪ i'm a veteran

alix: this is "bloomberg daybreak." here is the theme. by everything.

.ommodities, bonds, equities european stocks stronger. quarter.e week fourth forget the sentiment, still a rally underway. a mixed dollar story. euro-dollar flat. sterling lower .4%. michelle garnier did say there could be some kind of deal monthson in about three jean-claude juncker said it is disastrous. and the army taught me a lot about commitment. time for an update on which i apply to my life and my work. what is making on outside the business world. here is first word news. viviana: president trump will at comcast we're commited to delivering meet with china's top the best experience possible, negotiator. by being on time everytime. the two sides are starting to and if we are ever late, we'll give you a automatic twenty dollar credit. strike a preliminary deal.

my name is antonio and i'm a technician at comcast. we're working to make things simple, easy and awesome. they are now working on memos of understanding covering key issues including intellectual property. the latest inisn't just a store.ty venezuela, president nicolas it's a save more with a new kind of wireless network store. maduro is trying to prevent it's a look what your wifi can do now store. opposition supporters from bringing humanitarian aid across the border. he started closing entry points a get your questions answered by awesome experts store. to the border with colombia. this is the bridge connecting venezuela with colombia. it's a now there's one store that connects your life like never before store. the xfinity store is here. and it's simple, easy, awesome. tooling concerts are planned on either side of the border, one promoted by maduro, the other by richard branson could -- by richard branson. officials on both sides of the brexit deal are downplaying an alix: this is "bloomberg imminent breakthrough. there's speculation is if theresa may cannot ring a proposal to parliament next week daybreak." she would face a revolt and this we made it to the end of the trading week. would force her to delay brexit. no doubt kraft heinz will be front and center looking to open at a record low.

global news 24 hours a day, on air and @tictoc on twitter, futures up by 122. european stocks also on the powered by more than 2700 upside despite disappointing journalists and analysts in more than 120 countries. i am viviana hurtado. numbers out of germany. this is bloomberg. alix: in the middle of this the sentiment really taking a hit. earnings season, tension when it german gdp also hurt on comes to trade. we are noticing individual stock inventories. the overall sentiment looking ticking versus buying abroad forward had rough spots. through etf. despite the bad news, euro-dollar is pretty much flat. take a look at bank of america. almost $4 billion of fresh money is actuallybrexit in a single stock. possible. seeing that move in a decade. may could ask for a three-month joining us is luke kawa. delay. it may be possible, the currency cross coming under pressure. i notice a bank of america chart holding steady over the last few but i want to talk about luke days. .8%. up about setting up for what we have seen in the market. ke: this idea that stocks are crude, not blinking on that. going to march to the beat of david: good morning. their own drummers was set up during the q4 retreat. >> good morning. was very much a a three-month delay to brexit

low correlation selloff and that is because there is a lot of d negotiations european officials telling bloomberg they expect theresa may will be forced to request this. growth in crowded names. it would give the british if you look at tech, the nasdaq parliament time to pass necessary legislation related to correlation was a lot higher. the departure. that is something forward -- the two sides disagree over the irish border backstop. that carried forward to this year. tradeing with the chinese it is more about getting into individual stocks. alix: is that a trend that is going to continue? premier negotiator is seen as a >> i think so. sign that talks towards a trade deal is making one of the reasons this trend is sufficient progress. is there been positive they hope to beat a march 1 that find when tariffs are set to more than double on some chinese impacts for the last nine years. by beingtons of money imports. the president indicating he may be willing to stop the clock and let talks continue. long on the s&p 500. you've not had to do much more than that. now it is getting tougher. its secondching there is bad and on top of that, if you look at leadership, faang rocket of the year in cape canaveral, florida carrying payloads. is a thing. the idea the can make money owning single stocks has become the israeli craft will travel to the moon after deployment using

its own power. much more broadly accepted when global news, 24 hours a day you look at the performance of a on-air and on tic toc on twitter, powered by more than select group of companies. 2,700 journalists and analysts in more than 120 countries. this is bloomberg. there is a psychological angle, david? alix: i will pick it up. there is a volatility angle, and more details coming in how en could- stockg dispersion has increased at a single stock level. you are able to make more alpha in single stocks than you were. david: let me inject one thing be letting go thousands of staff and spending off operations into a joint venture. -- central banks. jim, why? and a time we have central banks pumping a lot of money to the system, it makes sense that a rising tide lifts all boats. jim: the business is not doing if they stop injecting that money, much less if they start as well as they expected. the cost basis to hide, so they pulling back out, is that mean are trimming it back. dox: what of that has to -- luke: i would agree with that theory. i the it is more difficult to with the economic backdrop in apply that because in the last europe or the regulations we saw we have seen central take effect in the past year? jim: there is a piece of each of those in this story. we knew from their earnings a banks tripping over themselves to reassure investors they will not be taking away the punch bowl. couple of weeks ago that they somelooking to retreat in

they are not adding to the punch of these businesses. we have known that the cost ball what they were. hang has been a struggle david: even if they do not pull it back, we had a lot of for them, as it has for banks positive delta going in. across europe, which relates to now that is tapering off. luke: that and in general the research and analysis costs. age of the business cycle. goes, people. also in the past few weeks we have had a concern about a worrying about when the end date is. when the downturn is. sudden slowdown in europe. across the board things are stocksnot want to own getting tougher for them. alix: we see the stock up by 2%. that are suffering in a late stage environment. savitia: i think you're i we going to defer this is what absolutely right. the expansion of liquidity has created a groundswell of upward analysts expect? movement. jim: it is an interim step. now you are starting to see the tides coming out and who was not there is always a little bump. wearing their bathing suit or we will what happens over the next few days to gauge the real whatever the expression is. market reaction. liquidity is not about trading alix: thank you for joining us. but it is on the margins going germanye want to go to from a massive influx to flat. alix: if it is individual stocks

now. investing a billion dollars to expand car sharing and and you look for alpha, does ride-hailing to take on uber and that mean the overall market lyft. returns are going to be less and miller spoke to both than expected? savitia: i think so. spoke about geopolitical risk. we are moving from an >> we are prepared for the environment of double-digit gains to single-digit gains over the next 10 years. i think things get harder but brexit as we move forward. is only answer to this one the advice we give to all of our we don't know what will come. clients is the way to beat this market is to lengthen your time horizon. if it affects production, this andng out the volatility is our answer. but for other parts of the world as well we need conditions finding good companies that will generate consistent earnings growth. attractive for business model. that is the way to navigate the market environment. matt: there has been talk david: thank you both very much from the u.s. and china. for being here. coming up, changes in there will be a meeting today at the white house. >> clearly, both of us are autonation's drivers statement. that freenvinced we'll talk to mike jackson and the incoming new autonation ceo. in the meantime, tariffs are on trade is creating value for everyone involved globally.

the mind of the european auto economy. we hear from bmw and the daimler the auto industry is based on networks which have global spans chairman and a rare joint interview. know from our existing car and are intertwined with local activities. sharing experience that we can both of us are active in the also earn money. united states. we are hopeful and optimistic end we will see on one between china and the u.s. a solution, and on the other hand the conditions as far as tariffs are concerned. matt: let me ask you about diesel. on it andeads up knows that these religions are better for the global environment than engines that people seem to prefer right now. can you convince the public that diesels are good for global warming? >> if you think about the

nearest generation of diesel engines they are absolutely clean. they meet all of the requirements and regulations. you can see why in the city of munich, the average consumption has been reduced, and the impact on the natural heir has been improving by just having better and new cars. these are new technologies, the technology of the future, clean technology. it shows, it demonstrates. we see diesel as definitely part of the picture of the future, and we see the decreases in the stock so far. there is a chance, definitely. >> discussion has been stronger in the media and politics. we saw a decline, but not that profound.

we see recovery rather than further decline. the faxptimistic that will prevail and the benefits of the modern diesel engine will be seen as a solution for the future, not a problem. david: that was our own matt miller, the car guy. alix: you can't call him the car guy. you are also the car guy. germany's economy is down, not out. you had output in the fourth quarter hit the inventories. part of that will be the auto viviana: this is "bloomberg daybreak." story. consumption investment picked up. coming up on "balance of power" datao you understand the eurasia group president. that we got from germany? >> i think that your read is the right one.

i am viviana her to auto with we need to focus on the your bloomberg business flash. forward-looking service. those are the indicators that you want to focus on. the u.s. ban on the sale of flavored e-cigarettes seems to with respect to germany it is be a temporary setback for about external trade and external demand. jewel. the mostny behind the domestic side of the equation just holds up as a result of credit growth of being popular e-cigarette device is on par with the nominal gdp forecasting a revenue of $3.4 billion for 2019, almost triple growth. we should expect that to stay stable we should expect a major what schools generated last year. the world's second largest gold producer is considering whether contribution going forward. to buy a rival. the data comes from the external sector. is based in -- newmont is based they carry a three to six month lead with respect to what is to in colorado. come. they have been what is they almost merged in 2019 responsible. the collapsing broader european regional trade, we put a lot of before talks broke down. the european union says there could be a trade deal with the emphasis on emerging markets and u.s. before the end of the year. china, but the biggest drop to keep president trump external trade has been a drop in exports to the u.k., to turkey, and the surrounding imposing tariffs on cars made in europe. region around europe. second in line is emerging-market asia.

that is your bloomberg business flash. bmw one best and david: we will put some numbers up here on the sentiment issue, and this is what we are seeing ever $1 billion to extend their with german pessimism. joint car sharing operations, we had numbers this morning part of the move to take on uber around 98.4. and lyft. not really encouraging. >> i can make it worse, if you bute are very successful would like. this is before monetary tightening has begun. this is after the monetary mobility is a question of scale as well. bazooka of draghi. combining the activities which we have grown up to 60 billion you still have this tepid customers to one platform is of economic data. comparedny is the star great value, which is reflecting to italy, france, spain, and our stock value. others. billion euros a alix: let me pushback on two points. we did see public spending, the year revenue. you're looking at 8% margins. best since 2016. what kind of goals do you want to hit with car sharing, with are we looking at fiscal loosening and spending will help ride dealing? profits up? >> we can get that on the we are not developing margin, but i don't think the business targets for individual amount can be large enough to verticals, but plenty of opportunities.

offset some of the headwinds we are seeing. sharing, charging, alix: if we get a trade deal with china, can the combination? >> absolutely. the volatility is really coming from external sector. on one side business opportunities and growth. if you get the improvement on that side, the compounding of david: those were the ceos of stable domestic demand, including fiscal spending, and bmw and daimler. alix: the eu is set to target the intern eternal side can life outlook for europe. chrysler and xerox -- the question is about, what caterpillar and xerox if trump imposes tariffs. it was just getting better for caterpillar. next? after we have deployed the monetary bazooka we have long growth to the private sector, be it consumers or corporation, a they just came out and said chinese demand was not that terrible. year.ominal year after they got a boost on that and are going a little bit letter and then they would be the ones that is pretty much nominal gdp. targeted in a retaliatory we haven't got access credit tariff. saying wet yesterday, growth to fuel domestic amend. europe to remains in a think we could get a deal with united states. alix: they already did it. savings justification of europe. they already did retaliatory this sounds familiar to what we have seen in japan. tariffs, so did china.

large monetary stimulus. suddenly we need to focus on what we have noticed with mexico and canada is once those tariffs are on, we have not seen them get removed. nominal gdp statistics rather david: in the history of the than real gdp statistics. >> to make it worse come in the world, tariffs are sticky. japanification, at least they easy to put them on, hard to get them off. control their own currency. alix: you can see how that would europe has all of these countries with different be an issue for some of these interests restricted by a guys. i want to look at caterpillar to see how much revenue comes from europe versus others. not even that much. currency that did not let's be clear. even help japan much, but is one maybe $11 billion out of their revenue. with an european countries won't have. at the risk of sounding too it is the third biggest, not as material. ideological, i don't think they it is the idea of these major will grow out on the public spending side. namebrand companies that would wind up getting hit. they need the productive aspects of the economy to improve. they are still trying to deal with the situation in china. david: we will be talking with david: we talked about monetary trade for a while. alix: both of those stocks are policy and fiscal stimulus, but not fundamental reform. kepts that mario draghi falling to premarket lows. i wonder what else is on? asking for. it cannot just be on xerox. david: that is the perfect it seemsng, lead-in for follow the lead. a look at the headlines making politically the various nationstates are going the other way? -- moving markets.

>> they are going the other way. today we will focus on the auto you no longer have the leadership figure. industry. if you thought of europe a all the questions swirling around softening demand, credit, couple of years ago you thought and the tariffs. of the leadership figure, merkel, that would bring them we welcome mike jackson, autonation chairman and ceo, and ceo.lever, the incoming together and overcome dogmatism. today you don't have that figure and the countries are dealing i will start with you, mike. we were not expecting this. with problems. macron in france. we knew you were stepping down. same in spain with the political what led you to carl? mike: i'm absolutely thrilled to turmoil. and don't get me started on italy. everything is inward looking. structural reforms, we know in hand the baton to carl. europe we go down to labor market reforms. he has a unique set of skills spending, butture delete autonation into its next that is not really reform. chapter. the as the unanimous support of the board and the unanimous the side of fiscal spending that really matters, if we start writing checks, that is not support of our largest shareholders. really going to change anything, but if you stimulate the economy he is an outstanding business leader. the broaderer plan, he has an ability to learn new industry. andas done retail at scale

european infrastructure spending initiative coupled with reform, that could provide light at the end of the tunnel. alix: first we have to get he is a master of building brexit out of the way. digital platforms. capabilities we have to some extent in thank you so much. autonation but there is a a great conversation this tremendous opportunity to take morning. coming up, indie producers at it to another level. that is why i'm excited to hand the oscars. the baton to carl. movies produced by former ebay david: you're coming off someone executives are among the top contenders. i used to watch all of the oscar movies. who has had a successful run. what are you going to be focused i took it really seriously with on as you come in? money in the game. carl: it is easy for me to say i would take that hard-core. david: the difference is -- and: i have a four-year-old is to look to mike as founder 2.0 taking over the company and a three-year-old. this is bloomberg. ♪ this great brand called autonation. first and foremost it is spending a lot of time in our stores with our associates engaging in this idea of culture and where we are going.

that destination for us is to be the premier service leader in the auto industry as it pertains to how you engage with your vehicle, how you use your vehicle and how you service your vehicle. as i think about the power of having stores coast-to-coast and a brand name like autonation and inability to think about our .upply chain and a think about how we engage with our customers over data and a service capability. it is exciting because right now over the next several years this industry will see a dramatic transformation. i know our stores and how we serve our customers is how we shape that. david: dramatic transformation. you announced earnings this morning which were somewhat soft. i wonder how much you feel pressure with auto tariffs. what could that due to your business -- what could that do

to your business? auto tariffs are the nuclear weapons of trade. they will make aluminum look like a company. hopefully it never comes to that. it is a matter of leverage and brinksmanship. if auto tariffs were to be put in place, it would be devastating to the auto industry and extremely disruptive to every economy in the world, particularly the united states and europe. hopefully that does not happen. i do not think it will. it will be dramatic, no question , as the story unfolds and there is always the possibility that things spiral out of control and their unintended things that happen. at the end of the day, i think there will be some sort of agreement. one of the things

>> the hewlett packard you do not have to deal with at home depot are auto emissions issues. for some companies that is a real problem. greenroom, coming up the we had that announcements from autonation ceo. ♪ ford yesterday that there's a problem with the way they calculate load. how big of a problem is that for ford and your company? carl: we have to be synonymous >> this is "bloomberg daybreak." with trust. when our customers purchase vehicles from us, that the the second largest gold producer is considering whether to buy a vehicles they are purchasing and we will service, that we stand rifle. it is based in colorado with the behind that. market value of almost $19 this is the opportunity i talked to mike about and why he -- we billion. have to be conducted -- they almost merged in 2014 before talks broke down will on most flavored connected to the manufacturers in a much more robust way. in some anyways the customers cigarette appears to be a temporary setback for juul. will form their perception of trust on this collective partnership with us as they are forecasting revenue of retailers. $3.4 billion for 2019, almost we have to get that right, and triple what they generated last as i think about three years ago and some of the other scandals year. that one-on-one -- that went on for decided to get in front of a

possible emissions problem. with volkswagen and others. that take her gates -- that they are saying the procedure could be flawed. ford workers raised concerns they hadember and denigrates what we have with customers is a brand. proactive measures that are we want to be synonymous with calming investors. trust. alix: thank you. there must be complete transparency in that we cover all things luxury. first up, live with your relationship from the manufacturers down to the servers. david: mike thomas you been in porsche. what it is like to live inside this business a long time. what is your gut tell you -- the porsche design tower built mike, you've been in this with your car in mind. when you are in rome, eat pasta. business a long time. what does your gut tell you? how big of a problem does for the best restaurants for apostate in rome. have? mike: volkswagen was the big meetsx, meets ebay, one. oscars. that lasted year after year after year. at the academyg when something like that happens, systemic failure, than the regulators will put awards with "roma" and "green book." david: web start with porsche. everything under the microscope. the tolerances allowed become much narrower and the companies they have nicely designed lounges. there is an elevator where you can drive your porsche to your themselves go back and say this cannot happen to us. we look at everything and call

apartment and you can keep it there surrounded by glass so you themselves out if there is can look at it any time you something even marginally want.who wouldn't want that questionable. ? >> talk about the ultimate i do not think it is anything --parable to what happened mancave. there is a five bedroom six everyone in the industry is taking the omissions certification process and a half bath condo that dramatically seriously. closed last december for 6.7 and carlke jackson million, without the porsche. the porsche come separately. liebert, the incoming ceo. congratulation once again. even the sunglasses come alix: back to that breaking news. separately. they have vending machines with $500 sunglasses. david: in fairness, you do not eu reportedly targeting have to have a porsche. companies like caterpillar and xerox. there is one mclaren, which by taylor: and samsonite luggage as itself would bring you quite a well. bit of money. >> a pretty penny. shares of caterpillar are off almost 1% immediately on the the guy who bought that condo news. said the number one thing about the eu also said to be targeting it is the ability to bring your car to your floor. xerox and samsonite. company -- it is kind of we know caterpillar was "to

handle the tariffs -- we know like a car wash on a skid. caterpillar was able to handle the tariffs. it pulls you in, turns you they get 20% of the revenue from around, and takes you to your the ema region. floor with your car. xerox that is their third you scoured rome and found largest market by revenue. they get 26% of the revenue from the best pasta places. what makes the best pasta? europe. that is all according to a >> we define that by talking to confidential draft that share top ships around the world. prices are reacting to. europe is a big market for these we relied on their expertise. we talked to the current owner companies. alix: coming up, shares of the number one restaurant in predicted to open at a record the world. low. what i'm watching, next. this is bloomberg. he likes of famous deli in rome. ♪ and we talked to danny meyer here in new york. -- the pasta is cheese and pepper. very simple, very classic. alix: portions are not

ginormous. it is not like when you go to carmichael's and their like here is 17 pounds of pasta, good book. our third story, the oscars are coming up on sunday evening. we have a chart showing the downward time. abc makes a lot of money. this is a personal effort of bob iger over the years when he was running entertainment news. overall viewership is down. we don't even have a host. the irony last years's the ratings with the lowest they have ever been, but the advertising revenue set a record. it is proof that it is hard to find a captive audience these days. >> we are watching "green book," one of the movies up for best picture. roma is also made by the same studio, netflix. >> the studio is owned by

participant media. it is owned by the first president of ebay. you can make a lot of movies over the course of a career and not have a best picture, and he has it twice in one year. alix: if you win your sales and ticketing those up. it is a direct correlation. to have that in there, is a big deal. >> this year is interesting because it has been five years since there has been a best millionwinner with $200 at the box office. this year there are three. black panther, a star is born, and -- alix: i did see like panther. -- black panther. alix: here is what i am david: i loved green book. watching. writing down the values on its alix: how can you not have a best-known assets by $15 host? billion.

i loved the oscars when billy crystal would do the singing joining us is a guggenheim thing. securities lead analyst for food out as one time he came and beverage. his initial reading of the anthony hopkins from silence of the lambs. >> why favorite was steve stock. martin. alix: he was good, too. david: three terrific stories. a pretty hefty write-down. how did they get there with $15 coming up china's ban on billion? >> it is a stock they australian coal, for is there underinvested in. one? -- or is there one? valueicing power and the needs to be devalued. this is bloomberg. ♪ the $15 million does reflect that. at the end of the day, it is reflection -- when you look at investment in r&d, it is extremely low. innovation or brand building.

it is much lower. they get to a higher margin because of that. they do not see any way to drive the growth. alix: do you have to lower your rating to a sell? things. i am neutral. , it is the lowest of our food and beverage base. that is a 10% discount to general mills and 5% discount to kellogg's. with the dividend cuts, it could put kraft heinz in a better position to do a deal.

there is a potential upside. that is the reason i am neutral right now. alix: what other companies are risk for this type of environment down risk? think -- i donot not think there is any other company -- alix: it is just about craft. david: this will surprise you. thank you very much. i am watching australian coal exports to china. that does it for bloomberg this broke yesterday and morphed daybreak. coming up, bloomberg markets -- over time. the story initially was the port the open with jonathan ferro. in china, it is near northeast this is bloomberg. ♪ china, had shut down imports of coal from australia. that was the report yesterday. than the chinese said that is not right.

it is a little unclear what is going on. alix: you can see the port there. in australia, there are a couple of ports. there are two in the northeast, and one in the south. is this a ban or cap? and is it environmental or a ban, which is personal? david: there are a lot of questions whether that is right or not. the australian dollar reacted dramatically. it has come back up some. the australian dollar really sold off in response to this report, which now seems to be modified. alix: there is an interesting analysis done that said you are looking at the cut of exports to china could be only 400,000 tons. even if there is a cap or ban it would be very small. david: a piece and bloomberg

opinion says it doesn't make sense because it is not a substantial port for coal. there are bigger ones for china. this gives you an idea of how big an exporter australia is. alix: and what a big buyer china is. the head of u.s. equity and quantitative strategy gives predictions for the stock market. deal, or aeal, no trade deal between the u.s. and china as president trump is set to meet with the china delegation. this is bloomberg. ♪ this isn't just any moving day.

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

♪ jonathan: coming up, trade talks wrapping up in washington. president trump meeting china's trade cheap. german business confidence sliding to a four year low. global equities continue to mount up. chinese stock markets capping a seven straight week gain. in the markets, we are shaping up as follows. can thepositive .25% price action in foreign-exchange muted. euro-dollar 1.1335. the 10 year 2.66. we begin with our top story. this is moving day with the best in-home wifi experience trade talks wrapping up and one and millions of wifi hotspots to help you stay connected. single word echoing all week around the tv studio. and this is moving day with reliable service appointments >> optimism. >> optimism. in a two-hour window so you're up and running in no time. >> a deal could be done. >> optimism returns. show me decorating shows. >> the m

this is staying connected with xfinity to make moving... simple. easy. awesome. stay connected while you move with the best wifi experience and two-hour appointment windows. click, call or visit a store today. alix: the big trade talks. the president and a

face-to-face. scenario.l auto nation gets a new ceo. the company misses on earnings as a new leader takes the rain. we talk with the outgoing ceo on business, tariffs, and demand. shares of kraft heinz fall to a record low after a write-down. the company also cites accounting issues. david: i'm david westin with alix steel. two: 30 this afternoon president trump will meet with the vice premier of china to review progress made, we hope, in the last two days of talks on trade. alix: whatever the optics of how it looks and what they say, it boils down to the reality of what we saw when it comes to $30 billion more in ag buying. those questions still permeate. david: march 1 is the deadline

for the tariffs. alix: nonetheless, equity markets floating around the highs and futures are up by 100 points. s&p futures up by nine. this makes more sense because we have weaker data out of germany. you had gdp dragged down by inventories for the fourth quarter. that weighing a little bit on the euro. end.y bid on the back if you do get a trade deal it is good for commodities, full stop. kicks back in that will be a positive for the crude market. we will begin a full day of fed presidents and governors speaking in new york when the atlanta fed president starts off a fed research presidents