francine: rejected. comewo sides do not together. closes as tensions grow. both nations have been shut down. ♪ welcome to "bloomberg surveillance." i am francine lacqua in london. haslinda in hanoi.

the latest summit ended with no deal. latest?the haslinda: well, trump said sometimes you just have to walk away, and that is what he did. no statement and no deal. wantsw kim jong-un sanctions to be lifted, but trump says it has to give up more than it is willing. the warheads have to be addressed. other issues have to do with that as well. you remember this is an economy withhas been struggling growth, contraction of growth. kim needs to go back and help his people, but these sanctions are not coming up if he is not willing to give up more. did say he wants to do it right rather than do it fast. both sides are committed to continue to talk to ensure that

the precedence goes forward. francine, run us through the markets right now. francine: there is a market reaction, so we do see a downside. people are worried about that coupled with what is happening in india and pakistan. 600 gain income of 11.24, andyuan at gold is up. coming up, we have an exclusive the deputy prime minister, and we will see whether there is any appetite from him to go to earlier elections. firstgo straight to the word news with viviano auto. viviana -- viviana hurtado. viviana: trump said he walked

after kim wanted all sanctions lifted. the split is the question, the future of negotiations. he added kim has promised to stop rocket tests. a slew cohen laying out of allegations against his former boss, donald trump. the lawyer and one-time fixer facing a barrage from republicans. they called him a "convicted liar out to gain publicity." trump saw the campaign as a brand building opportunity. i am ashamed, because i know what trump is. he is a racist. he is a con man. and he is a cheat. viviana: theresa may surviving another series of brexit votes after signs of her brexit dealer falling away. the house of commons overwhelmingly backing the prime minister's offered to back a

no-deal exit. she might be able to find a compromise. india and pakistan facing their worst military standoff in decades, this following the loss pilotighter jet with the later being paraded on pakistani television. wanted to escalate, but neither side -- global news 24 hours a day on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am viviana hurtado. this is bloomberg. aslinda, back to you in hanoi. haslinda: viviana, thank you for that. talks broke down between president trump and kim without a deal. pres. trump: basically, they wanted the sanctions lifted in

their entirety, and we could not do that. aey're willing to denuke large portion of the areas that we wanted, but we did not give up all sanctions for that, so we will continue to work, and we will see, but we will work a on a particular -- work on that particular selection. tempting to say, steve, that this is an outright failure. what is it? steve: we talked about it being a second date, now it is a honeymoon that is cut short. is it a failure? ask.pends on who you when you look back at thanks donald trump has been talking about leading up to this, you can kind of connect the dots and say this is sort of inevitable, icause he was talking about

am in no hurry, i would rather do it right then do it badly, and sure enough, what did he do? he said i am going to walk. page from his own playbook, and that is, it is not working, walkout. haslinda: and now it is up to kim to come back with a walkable solution. he wants sanctions to be lifted to help his people. stephen: yes, he wants sanctions, but the united states also wants progress on denuclearization. haslinda: action for action. stephen: that is what a negotiation is, and donald trump was surprised when the americans were outlining all of the hidden it mighties and sites, have been a blood come up the north koreans are surprised that yes, the united states no -- it been a bluff, but the

north koreans are surprised that yes, the united states knows. francine: stephen, what comes next? are the two sides still negotiating? i guess people below the leaders level, or are they still talking about phone calls? we do not know if they will have another summit. that has not been discussed nor agreed upon. this one has been hastily arranged. the way i see it as we go back to sort of the square one path, because the summit was supposed to build upon that short a summit in singapore eight months ago, which was vaguely written and was an introduction between the two men. we did not get much progress beyond that other than what they are saying.

what donald trump is saying is we have more mutual understanding, we like each other by character. he did not say they were friends, he said "we are quite friendly," but there was no actionable statement from but to. so -- from the two. so they are trying to go back and build on the first summit, which donald trump was criticized for not doing enough. go back andcans resume the war exercises with the south koreans? do the north koreans go back and resume their missile tests? even though trump says kim has pledged not to resume missile tests. the south korean perspectives that they find this regretful. chiefn engle, correspondent here in hanoi. , let's focuslinda

on geopolitics in the markets. paul donovan joins us. deads a little bit of a summit. maybe expectations were too high compared to what we are doing on the ground. what does it mean out for markets? it resorted to something ugly very quickly. paul: i do not think markets will focus on that. markets do not focus on extreme political events. francine: should they? paul: it is difficult, because it is a binary outcome. it goes from 3% to 4%, and how do you price that into financial markets? it is almost impossible. there are things that markets do care about and do react to visibly, things like trade. the trump administration has

finite resources, he has time to spread among the various issues he wants to focus on. if he is spending more time on geopolitics in north korea, we have iran coming up, so is he spending more time on that? is he going to spend less time worrying about trade, less time on angela merkel? if that is the direction, then that is something markets need to be worried about were focused on. francine: president trump on the campaign trail, do people care about actually what happens in foreign affairs? do they care about this is bloomberg. ♪ -- onthey care about tariffs autos? in terms of policy initiatives, what we have in washington is sort of a double gridlock. the democrats have controlled the house. that is gridlock number one. then we have a second sort of gridlock in the white house,

because as they launch investigation after investigation into the white house, the white house becomes mired in dealing with this. so the ability of the president to get action sort of narrows, and that could be decided intellectually, so we're talking about trade, immigration, military affection. so that is where markets will give affection, and that is where the markets need to jot what if the giving attention to? convinced oneare way, trump supporters are convinced another way, yes, there may be some people in the middle who are swayed one way or the other, but there is nothing particularly surprising from other side, necessarily, coming from the events of the last 24 hours. haslinda: paul, geopolitics is one issue. the other of course economic a d data. isreasingly say it

dislocated from the rally, the markets not quite reflecting the on the metals of the economy pretty much across regions. what is the risk here? we are lookingn at economic data, we have to be quite careful. the fact is economic data is not as reliable as it used to be in real-time over time, you correct it, but we know that there are problems. we know that the u.k. economy is growing faster than reported, because of the tax revenue data. we know the german economy is doing something better than expected because there is something weird going on with the report from the financial industry. we are pretty sure it did not collapse in december, and we are happily spending money, but the data is misleading. sentiment has a fear as well because sentiment tends to overreact to the media cycle, what is going on in the underlying economy.

i am not too worried about the global economy at the moment. we had a slowdown. we were supposed to have a slowdown. that is all fine. moderate place of stabilization generally speaking in terms of public today. francine: what is the one thing that economists are getting well? why are economists universally quite bad at predicting recessions? arise ever from a policy area or from an overheating. an overheating you can normally get come another the precise timing, this month or that month, that is hard, but this is overheating and will go badly, that you can do. policy error is more difficult to do, because that can be the whim of the president or the .entral bank making a mistake, and that is a lot harder to forecast forecasting somebody getting wrong is not necessarily the easiest thing to do. there isther thing is another problem, which is

theomist -- did economists pret 2001 recession? at the time, there was not a recession. economists were actually quite right in the first place, but you have a people sayriod where no, you have got it wrong, but you only find out where the data is revised overtime. haslinda: that is right. it all depends on what data you look at. paul donovan from ubs wealth management stays with us. still to come on the show, much the talkshanoi as between north korea and president trump breakdown over sanctions. this is bloomberg. ♪ ver sanctions. this is bloomberg. ♪

francine: economics, finance, politics, this is "bloomberg surveillance." i have francine lacqua in london. haslinda man is in hanoi, then vietnam. ofia has accused pakistan creating war. that is after pakistan's is a -- pakistan says it will consider returning the pilot. trump struck an optimistic tone during a news conference in hanooi. pres. trump: we have been going at it, and we have been involved in trying to get them to stop, and we have had some reasonably decent years. hopefully that will be coming to an end. francine: we have bloomberg's

executive producer in mumbai. how will this play out, weeks against the general election? the pressure is clearly building on both sides. india is not in favor of escalating this conflict beyond what already happened. it is problematic. also there is personal economic growth. pakistan have the moral upper hand. says categorically pakistan will have to take credible action is talks were to happen. they are responsible, so they are basically telling pakistan what the talks are before the dialogue.

what is complicating matters is the pilot in pakistan custody. india demanded he must be released without in a negotiation. escalation really depends on how the pilot is returned, safely and quickly. francine: harsha, thank you so much, harsha subramaniam, bloomberg's executive producer in mumbai. we are trying to figure out whether the hanoi summit with something that markets should wake up and listen to, and you say this is difficult to price in, but how should central banks look at these big geopolitical risks, such as the india-pakistan tensions? paul: the central banks need to be concerned about this if it is creating significant disruption either on the corporate side or .y markets with something like india-pakistan, this is still a relatively localized problem. to diminish the potential risk

of the challenges between the two sides, this is not something which is likely to spread beyond the subcontinent. central banks will say ok, this is moderate destruction. there may be a small amount of safe haven knows, there might be fluctuations on both sides, etc. , but this is not something that most of the banks will be excessively concerned about. given the region we are talking about, kashmir is the area, it will nothabited, disrupt economic trade flows or anything along those lines. that is why the as the r.b.i. is concerned. it is expected to cut late again in april. paul donovan, of ubs wealth management, stays with us. aill to come on the show, trade shyness deepens. we will talk about the world's

second-largest economy and the future of global trade. this is bloomberg. ♪ global trade. this is bloomberg. ♪

francine: economics, finance, -- haslinda: economics, finance, politics this is "bloomberg , surveillance." i am haslinda amin in hanoi. francine lacqua is in london. a series of domestic politics, a slowdown, and trade war all played a part.

still with us, paul donovan from ubs wealth management. fair to say that the upside to china is pretty limited? paul: actually, i am more optimistic on this. i do not have a lot of faith in pmi data. withorrelation of pmi's reality has declined over the last 10 to 15 years. if we look at what is happening, the chinese are very determined to keep the domestic demand stable. we have seen this with tax cut is coming through, we have seen a commitment from infrastructure spending, so the domestic demand side i think will continue to be supported. the trade dispute fades away a bit. i think we will get stabilization on the export numbers. francine: what will strengthen more, the dollar were remembering? -- or renminbi? paul: that is a different goal one -- that is a difficult one.

there will be working people's relatively stable. somenk the dollar has weakness as we look ahead. francine: paul thank you so much, paul, donovan from ubs wealth management stays with us. up next, ray dalio says he is less worried about the chances of a recession before the next presidential election. we talk about the recession, brexit, and theresa may and the u.k. parliamentarian we will talk about pound levels in excess well. this is bloomberg. ♪ -- pound levels next as well. this is bloomberg. ♪ this is bloomberg. ♪ want more from your entertainment experience?

just say teach me more. into your xfinity voice remote to discover all sorts of tips and tricks in x1. can i find my wifi password? just ask. [ ding ] show me my wifi password. hey now! [ ding ] you can even troubleshoot, learn new voice commands and much more. clean my daughter's room. [ ding ] oh, it won't do that. welp, someone should. just say "teach me more" into your voice remote

and see how you can have an even better x1 experience. simple. easy. awesome. >> i am ashamed because i know what mr. trump is. he is a racist, a comment and eight cheat -- a cheat. >> you are a pathological liar.

this is my time. >> the more people that follow mr. trump as i didn't blindly are going to suffer the same consequences that i'm suffering. >> have you ever seen mr. trump personally threaten people with physical harm? >> no. he would use others. everybody's job is to protect mr. trump. things, but i am no longer your fixer, mr. trump. francine: that was donald trump's former lawyer, michael damagingeashing accusations against his former boss. for more, let's get straight to kevin cirilli. he is in hanoi where he was just at the press conference with mr. trump and the leader of north korea. how distracted was the president

while he was negotiating with mr. kim because of the cohen testimony? we know for a fact that mr. trump, by his own admission said publicly with them the last 24 hours that he was carefully following the cohe testimony on capitol hilln even while he was here negotiating with kim jong-un. we also know the president publicly tweeted about michael cohen. to call him a liar. -- he called him a liar. the president said that the testimony was incorrect. he called it a fake hearing. he also said there was no collusion. i wouldident, anticipate is going to have much more to say about michael cohen. he is currently on his way back now.e united states this comes at a time when the president had wanted to get some kind of international agreement

on the international stage with north korea, and decided ultimately to walk away from heth korea, but stateside, was hammered with allegation after allegation from michael cohen. i spoke via text message with a source very close to michael cohen who told me he was ready to go, fired up and wanting to have the opportunity to go after president trump. and go after the president, he did. what is the sense you are getting? did the testimony overshadow events in hanoi? kevin: that is a great point because on the one hand, the certain sources i talked to say the senior staff in those -- and those intimately involved are not distracted. they are in their own bubble in terms of the negotiation. on the other side, as folk with several analysts who noted that

has said before that he does carefully follow the development in the united states. there is no question the north koreans were aware of the domestic situation that president trump finds himself in, particularly given the split screen of many of them mainstream media. it's not just the north koreans that were following this, so were the chinese. this is very much a geopolitical chess game with the north koreans, chinese, russians. president trump has said it would take an international coalition in order to ultimately get pyongyang to lose our nuclear ambitions. the president headed here with low expectations, but he walked disappointed. there is no schedule read meeting between president trump as well as the north korean leader. the president said that he was able to get assurances from the

leader that there will not be any additional missile testing, took there is still no schedule date as to where things go and where the progress from here. francine: going back to the testimony, will it push or force president trump to release some of his tax returns, and is it make a difference with his base? kevin: no to both. sources i spoke with our fully prepared for any type of legal fight to engage in for any type of request to get the president's tax returns. the president has successfully framed the issue of michael cohe n. the polls suggest that he is very much in line with that. i interviewed a republican from arkansas just after the hearing.

he told me he didn't see a major tipping point. everyone still is waiting for bob mueller's investigation to conclude. republicans are still waiting for the. -- that. haslinda: kevin cirilli, chief washington correspondent. . -- thank you so much for that. trump's president second summit with kim jong-un collapsing without agreement. trump says he walked after north korea insisted the u.s. list all stations against the country in return for a nuclear deal. the u.s. hasn't committed to a future summit putting into question the future of negotiations. he added that kim promised to stop rocket test. >> our relationship is very

strong, but at this time we decided not to do any of the options.we will see where that goes . it was a very interesting two days. it was a very productive two days, but sometimes you have to walk. this was just one of those times. viviana: the first official gauge of china's manufacturing sector is showing further contractions. the february number is likely way down by a series of holidays and trade uncertainty. china's nonmanufacturing sector is expanding, but at a slower pace. pakistan's foreign ministry --ing india handed over this is seen as easing tensions between india and pakistan as they face their worst military standoff in decades. in the officials say the country

won't negotiate over the fate of the pilot in pakistan's custody. global news, 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 jounalists and analysts in more than 120 countries. back to you. ray says there is a lower chance of a u.s. recession now that the federal reserve is less inclined to hit the brakes on growth. the founder of bridgewater associates says the chance of a recession is now about one third. let's get back to poaul donovan from ubs wealth management. web metrics do you look at? inflation? the labor market? get a recession, you need policymakers doing something wrong, or you need the economy clearly overheating.

on the former, that is just looking at where interest rates are and where policy is. on the latter, it is looking at pricing, stress in the labor market and so on. on neither of those measures to be have a serious problem, yet this has been an extraordinarily long economic recovery. the chances of the speaking and overheating moments are relatively low. francine: what is the pivot point? paul: a deal on trade is debatable. i don't think we are going to get a grand deal. i think what we are get is a repeat of the juncker deal. extent, i think it does offer some support to the wenomy because they did -- investmentwdown in

across north america. recovery and that investment would be more positive and would also help with trade. we don't actually trade huge amounts of consumer goods. you get a double positive coming through from the. cutsll, the income tax mean the u.s. trade deficit is not going to be shrinking any times in. i don't -- time soon. i don't think we can get a treaty will transforming the u.s. economy. haslinda: having said that, what is the right move for the fed? the markets pricing in no move this time around and possibly a cut. paul: i think that is a little bit excessive. you have got an extremely strong labor market. 3.5%-4%.ing you have got still above trend

growth. think this afternoon when we get the numbers, it will be confirmed the u.s. is going about its trend. inflation is not rising dramatically, but inflation is normal. i would certainly be looking for the fed to raise once this year. i could even argue for the raising twice. if we cut and run the political noise and looked at the ceiling debate, leave all of that to one side, of think the direction of rates is still for a one or two rate hikes. the fed has made clear that the quantitative policy is quick to continue to be adjusted over the remainder of this year. francine: if you look at the rest of the world and what they are doing, they are the only ones hiking. that the fed is not hiking in a vacuum. they are raising rates for a good reason.

it's not as if the rest of the world is not tightening policy. the bank of england has been tightening policy for four or five years. is allowing the balance sheet to follow as a share of policy. you moved to a world where we are no longer just focused on monetary policy. operatingn't exactly on isolation. but thenther advanced, the u.s. economy is further advanced in its cycle and the eurozone economy, for example. haslinda: today, we're asking of will be s&p 500 or 300 do better in march?

we have paul donovan from ubs wealth management staying with us. the question of the day, will the s&p 500 or the csi 300 do better in march? up next, more from hanoi. >> our relationship is very strong, but at this time, we had some options and we decided not to do any of the options.we will see where that goes , but it was a very interesting today's. -- two days. sometimes you have to walk and this was just one of those times. ♪

francine: economics, finance, politics. this is "bloomberg surveillance." let's move it closer to home here in london. brexit taking its toll on you can businesses. consumers are also pessimistic about the economic outlook with the government failing to provide clarity on the future relationship with the european union. this week, the prime minister conceded the country's departure may need to be postponed as she tries to get her withdrawal deal through parliament. joining us now is the director general of the british chamber of commerce. paul thomas anderson of ubs wealth management is still with of -- paulonovan donovan of ubs wealth management

is still with us. businesses aren't ready for a messy and disorderly exit from the eu on the 29th of march. i think a lot of firms may say that that threat receded a little bit, but what seems like it except and politics is actually only a small step for businesses. they haven't got that much certainty than they did before. francine: what does it mean for the supply chain? we talked about stockpiling last time. are the businesses that you represent telling you now? adam: those are preparing will be in sectors like manufacturing. they are stockpiling, they do have inventory built. people are saying we want you to take the costs on of all of this we will only give you a price quote for 48 hours because sterling is volatile.

a lot of manufacturers are seeing issues. a lot of the money they're spending is basically going into swimming in place right now. haslinda: you talked about how businesses are not ready for brexit and this delay. ey theould ith positioning themselves now? adam: what we telling a lot of firms is to take advantage of what they had and plan for all scenarios. in some areas businesses still don't have any definitive information they can plan for. and other areas, that information is slowly starting to emerge. what we are concentrating on is taking the information you have got and doing something.

two thirds of businesses we surveyed still have not been very much planning. they are watching and waiting for an outcome before they take this is decisions. that is rational for them, but it does mean things are w aiting until the last minute. at thee: if you look volatility, it seems to me that a lot of markets are not pricing in some kind of deal, either softer than what we already have or know brexit at all. paul: i think what we have got is most investors are now expecting that there will probably be a delay of some order. what thats a delay, then does is increase the chance of a deal being done. we are got to remember, not talking about the final settlement. to talking about the deal while we talked about the final settlement.

there is also perhaps a growing realization that we could be looking a little bit beyond. is pregnant is more involved and it there is a genuine --lingness to avoid the more there is just a little bit of focus on that starting to come through, which is i think being reflected. seecine: are going to investments flow into the country if struggling drops a little bit lower? how much is currency important to investments? adam: i think investments come regardless of pound level. what they are saying to us is that they need to see an end to political uncertainty in the u.k., and then you will start to see investments flowing again. some say if it is concerned, they will see more investment. a lot of investors are watching and waiting just as you can

businesses are. paul: i am hearing the same sort of thing. exit,re is a no deal there is still investment. haslinda: we talk about possibly less investment, fewer jobs. how will this impact the businesses? adam: businesses are already seeing the leading edge of that. we have seen companies that has seen contracts canceled, companies delaying quite a bit of planned investment. this has geographic impact around the u.k. and impacts on trading relationships. we know that some parts of the united kingdom are more exposed to uncertainty than others, the midlands, the northeast, places where there are heavy concentrations of manufacturing. we are very concerned about a

uncertainty.less we have got to get to a conclusion on this matter so businesses can move on. is tot way to do that avoid a messy departure of march 29. if this goes on for years and years, quite a lot more business investment could be postponed. francine: thank you both. adam marshall joining us this morning and all donovan of -- paul donovan of ubs wealth management stays with us. on brexit, more on you take -- u.k. assets, next. this is bloomberg. ♪

francine: economics, finance, politics. this is "bloomberg surveillance." we will get a lot more from haslinda on president trump and kim. -- let'soughts with p

now get final thoughts with paul donovan of ubs. what can ecb actually do? when did we find out who will replace mario draghi, and if it is a german at the helm, does that change the policy of the ecb? paul: it doesn't look like it is going to be a german at the helm. the noise coming out of berlin is perhaps that they are looking at another role in europe. innsurprising number of f -- a surprising number of fins are looking at the job. you get a degree of tightening coming through. tactic there is also recognition that negative rates are quite destructive if they go on to long. it leads to a misallocation of resources. companies invest in products they shouldn't.

they last longer with negative rates. soundwas a pretty economic argument for moving away from the negative rates environment. i just want to jump in here because we have breaking news out of south korea, responding to what happened here in hanoi. trump has called south korea's moon to discuss the north korea summit. that is it. this is bloomberg. stay with us. ♪

francine: no deal. president trump walks out of his

summit with kim after his plans were rejected. investors piling to safety south korean stocks, the currency falls. airspace asses its tensions escalate. this is "bloomberg surveillance." london,cine lacqua in tom keene in new york. our main story has to do with geopolitics and how markets are reacting to it. then of course we go to the michael cohen testimony and wonder whether that has distracted the president while he was in vietnam. tom: the international relations story is extraordinary. all i would suggest after what we observed a few hours ago from the president, it will be a long 8000 miles home. francine: it certainly will. in the meantime, why don't we

have a look at markets? go futures -60. there is a curve steepening we have seen, 14 or 15 basis points. euro strength as well. let me go to the second screen. the vix 15.05, korean markets showing some of the. yields, thatn-year is a big deal, that is a big 0.16%.om 0.11 to a higher german yield this morning. francine: if you look at the disappointing., stocks also maybe a little bit

worried because of this abrupt end to the u.s.-north korea summit. if you look at some of the trouble facing investors, you can definitely see havens including gold and yen climbing. i'm looking at pound because of the amendments we saw yesterday. tom: for those of you waking up in america and following through the morning in europe, we say good evening to asia as well. i think the best thing to do before we go to kevin cirilli is let's listen to the president of the united states. >> our relationship is very strong, but at this time, we had some options and we decided not to do any of the options. we will see where that goes, but it was a very interesting two days. i think it was a very productive two days, but sometimes you have to walk. this was just one of those times. basically, they one of these sanctions lifted in their

entirety, and we couldn't do with that. uc they were willing to den large areas that we wanted, but we couldn't give up all the sanctions on the. we will continue to work, but we had to walk away from that uggetion --s suggestion. tom: kevin cirilli joins us picking up marriott miles. good morning to you. it has been an exhausting afternoon and evening. who within the president's foreign diplomatic corps told him to walk? : the secretary of state, mike pompeo. president trump appearing during the press conference with secretary pompeo, in which the president said he had to walk away quite simply because the north koreans were not prepared to fully denuclearize and wanted

sanctions to occur. the bottom line is that the president also suggested that during these negotiations, he presented intelligence to the north koreans, suggesting that the u.s. had intelligence of all the different nuclear plants with a north korea and not just the contentious plans that have garnered much attention beyond that nuclear plant. from here, the president already one, andr force parking back to the united states where he is going to be bombarded with questions. mr. pompeo darkened the door at west point a few years ago. we spoke to the admiral yesterday as well. how much of this is the united states military is a general statement, the pentagon weighing in on the military matters of the korean peninsula?

vin: i think there is an influence and i think that is a think thet because i u.s. intelligence committee has put forth evidence that even in the eight months since the first u.s.-north korea summit, while there has been no more missile testing, there has been a continuation of their nuclear ambitions as well as missile development. that was a point that the president really didn't come down too hard on during the press conference. he says there are reports to suggest that that was the case and reports to suggest that that wasn't. in that one-on-one meeting, after hours worth of positive rhetoric coming from president trump as well as kim jong-un, that deteriorated and it was because of the intelligence that was presented to the north koreans by president trump, by secretary pompeo.

that was ultimately the decision in order to walk away. we talk about sanctions being lifted from the u.s. perspective, we should know china's role here. the chinese had floated the idea of easing some of the sanctions. the russians had suggested in recent weeks as well, perhaps bringing back together an international coalition. this is a geopolitical chess match. it was on full display inside of the marriott within the last few hours. yesterday we were asking whether the testimony of michael cohen was overshadowing the summit somewhat in hanoi -- in hanoi. do you think the president was in a rush to get back home? trump said hent was following the developments coming out of the congressional hearings with his longtime personal attorney. during the press conference, he

received one question about that. he said it was fake, it was a fake hearing. he criticized michael cohen. it dominated the discussion. we also know that kim jong-un carefully follows u.s. developments. it did cast a shadow over the senate. i was texting with staffers from both parties in the last day asking them about the perception here. there's no question that in the halls of congress, what was reverberating was michael cohen is not the second summit with north korea. francine: you almost have two hats on. does it have an impact on trump's base? kevin: no. that is nothing to suggest the polls are going to shift. a republican from

arkansas yesterday and he said that there really wasn't a tipping point from his perspective. republicans are still waiting for the conclusion of the mueller investigation. with thought it was going to come this week. we still don't know the precise timeline for when bob mueller is went to wrap that up. -- going to wrap that up. francine: thank you so much, kevin cirilli our chief washington correspondent traveling with the president. the president will return to washington, potentially facing a number of legal risks. i am ashamed the designer what mr. trump is. he is a racist, he is a con man and he is a cheat. >> you are a pathological liar.

we don't know truth from falsehood. this is my time. the more people that follow mr. trump as i did blindly are going to suffer the same consequences that i am suffering. >> have you ever seen mr. trump personally threaten people with physical harm? >> no. he would use others. everybody's job at the trump organization is to protect mr. trump. i have fixed things, but i am no longer your fixer, mr. trump. francine: let's bring in the head of the u.s. and americas program at chatham house. always great to speak to you on such an important day. --iness change the needle does this change the needle? : some of what a lot of people suspected was confirmed through those hearings, but

there is a lot of questions surrounding what else is being said by michael cohen? the day before the hearings he was speaking to the senate intelligence committee. today he is going to speak to the house intelligence committee privately. one thing that is important that came out is that he noted that he is cooperating with the southern district of new york. what we did see was the characterization of a presidency, of a president who is immoral, racist, a number of things that will disturb many people, but probably not alter the public opinion surrounding this. tom: i think the new york post did a service today because this is extraordinary. the post with a print over of a prison outfit on mr. cohen.

it goes to the story forward. the president is going to flight 8000 miles and deal with about 8 distractions. is is the key distraction the threat to his family? how much was his family damaged by the testimony yesterday? leslie: the president is deeply worried about that. if you talk about loyalty being key to this president, those he is most worried about our his president. i think there were a number of disturbing things yesterday. what we are seeing is the attempt to smear michael cohen. carroll be some people who read it through partisan lens. it is going to be very damaging for the president, but what do we actually take from that? i think the real game changer will be what comes out of the southern district of new york, what comes out of the mueller investigation. for yesterday's hearings, really

how does that affect congressional politics. those are the things we should really watch. tom: there are those of you that the workings. what is interesting here is the shift from counsel and courtroom and prosecutors over to congress. is that going to be the future for 2019 and into the election cycle, is more of the theater that we saw yesterday from capitol hill? leslie: it is the editor, but it is not -- it is theater, but it is not just theater. the house was taken by the democrats. we are seeing those

investigations and hearings, and we are going to see a lot more of them. i think it is entirely appropriate and important to have that out there, but there is a lot of theatrics because of the questioning being taken place along partisan lines. leslie from chatham house. there is so much going on in economics, finance and investment. youre thrilled to bring george of deutsche bank. shocking news out of china on exports. coming up, sara bayless of deutsche bank. this is bloomberg. ♪

francine: this is "bloomberg surveillance." haslinda, you have been covering this extensively. president walking out of the summit and taking a plane home. what is the latest? haslinda: clearly, there is disappointment. trump did say he walked into negotiations repaired to sign a deal, but in his word, he would rather do it right then do it fast. we have the south koreans coming up to say that the outcome of the summit was regretful. there was a phone call between trump and korea's moo to discuss the outcomen. the koreans have always wanted an easing of the sanctions because it wants better relations with north korea. tom: haslinda, thank you so much. let's drive forward this conversation.

george with us of deutsche bank. leslie with us as well from chatham house this morning. , let'se of mr. cohen speak of the summit now as well. we have to move on to the next diplomatic ballet with north korea. options orited our is there a path to further dialogue in the past to a third summit? this is certainly not what anybody expected. people are very worried that donald trump would give too much too soon. now, it is very clear what the plan is. having walked out of a summit, which is really unprecedented, to come back into talks without there being something on the table, i think would be very difficult for this administration.

i think this demonstrates is that there wasn't coordination internally, that there wasn't a plan for what to do if north korea didn't quickly come to the table with a set of offerings that trump was willing to accept. the alternative becomes coordination internally within the administration on the ground and sort of giving up very quickly. at a lot when you look of the geopolitical risk that we , what does itina mean for currencies? there is a little bit of a bid for haven this morning. what does it mean for dollar, longer-term? ge: we have central banks that are really trying to dampen volatility. we had the big shift from the fed, but i think especially as it relates to the issue of korea, market expectations are

already very low. is what isfocus going on in trade negotiations with china. you can even make the argument that to the extent that there hasn't been a big breakthrough year, perhaps there is a bigger need for a win as far as the china negotiations go. it is global growth, global trade at the forefront of what markets are focusing on. tom: let's wonder back and have a larger conversation on this. you.e, as always, thank we are going to come back with a really important chart on all of this trade discussion. this afternoon, the former chairman of the federal reserve system, alan greenspan on bloomberg in the 1:00 hour. this is bloomberg. ♪

tom: let me go right to a chart. this is the pmi of china exports. i have to do a major shout out to our jon ferro who has been watching this on a monthly basis like a hawk. down we go with the diffusion index of 50. this is a long chart. backis a plunge in exports territory.l crisis are we finally in a hard landing

in china ? i think that chart is the most important chart of the year in where it goes over the next few months because the markets major concern is where growth is heading. the big growth downgrades that happened in q4 of last year are very sharp and were led by china. it really depends on what your view is in terms of what is going to happen there. our view is that we are very close to an inflection point. you see a fair degree of stimulus coming through. we monitor china credit growth closely. that does seem to be inflicting. our view is the next move is up. it is critical in terms of how we are looking at the markets and the outlook for the rest of the year. francine: what will strengthen more this year? george: overall, we have a weak dollar view. we think the renminbi has , butdy had a big move

overall we look at the renminbi eating quite stable and the dollar weakening against other things. the pound is the best performing currency this year. overall, we are looking for dollar weakness. yuan has been driven by the trade war. a review is that the main application will be to depress volatility. throughhina will not go seven. equally, the potential for the yuan two depreciate quite sharply. the potential for it to depreciate is quite limited. the authorities that want is the financial conditions and a weaker yuan is part of that. if the dollar is weaker, dollar

yuanne perhaps -- dollar perhaps is lower. francine: coming up next, jason kelly sits down with joseph, the blackstone head of private equity. we will talk about some of the deals out there. which sectors he is seeing deals.we will go back to the markets and talk about brexit and what happened in hanoi. i like the way that george was withng with has in vietnam maybe the need for president trump to find an agreement on trade. ♪ this is bloomberg.

♪ our relationship is very strong, but it this time, we had some options that we decided not

to do any of the options and we will see where that goes. it was a very interesting two days and i think it was very productive, but sometimes you have to walk and this was one of those times. they wanted the sanctions lifted in their entirety and we couldn't do that. aey were willing to denuke large areas that we wanted, but we could not lift the sanctions. everyone,morning, bloomberg "surveillance." it has been an extraordinary day. francine lacqua and haslinda amin. , theto washington president with an obligatory tweet and a nice video, thank you to our generous host in hanoi.

what is so fascinating about the tweet stream of the president is ago,tream from 19 hours before the press conference with secretary pompeo. here is the president with the shaking of hands a day ago, a great meaning -- meeting and , lookingth kim jong-un forward to continuing our discussions tomorrow! , andnda amin is in hanoi this will reverberate across the pacific rim. what will be the changed relationship with the adjacent pacific rim nations? china, just like south korea, both parties really wanted to talks to work. they want peace on the korean peninsula and right now, that peace is on hold. trump was willing to walk away

because the deal was not quite right. he said do it right rather than do it fast. the concerns remain on the korean peninsula, the south koreans saying they regret what transpired. talks will have to resume. tom: he stand before the restored sword lake in hanoi -- you stand before the resort -- stored sword lake in hanoi, clinton, obama, and now trump have traveled to hanoi, absolutely extraordinary. with your experience, can you please position where vietnam is into the next decade? this is a country of 100 million people with an average age of 29. it is a very young population. if you look at growth in vietnam , it has been averaging 6.5% to

7%, one of the fastest-growing societies in asia. they are putting his really behind them -- history behind them. they were was here, cheering him, flags in hand. great potential for this country. francine: unlike the first summit between trump and kim where a symbolic agreement was made, we have still heard president trump talking about friendship but he had to walk away. let's go to the conference in berlin where jason kelly is speaking with joseph baratta. good morning. jason: good morning. thank you so much. i am here with joseph baratta. we woke up this morning to all these headlines coming out of vietnam come out of washington come out of london -- vietnam, out of washington, out of london

. how is there so much optimism given what is coming out in the world? joseph: there is a lot of noise, and our job is to think long-term, buy in a good business and keep through the cycle. we cannot focus much on the short-term noise and what is going on in the geopolitical sphere. jason: 2500 people gathered here just about every year, meeting after meeting after meeting with your limited partners, the biggest investors in the world. what is their biggest concern as they give you more money? joseph: people are focused on where we are in the economic cycle, how close we are to a recession, our views on the valuation in the capital market cycle. valuations have been elevated for a while, but it is mostly about the economy, what could change it and lead to a

recession with -- recession, especially in the united states. jason: what do you think about recession? joseph: there are small pockets of weakness. in the u.s., housing a strong, employment is strong, consumer spending seems to be strong. there is a deceleration in topline growth for some companies, but we are not seeing the telltale signs of a recession. is special to people here and to you. europe for blackstone, putting together merlin entertainment, you were intimately knowledgeable about that market. brexit obviously high on the mind. how do you look at europe? joseph: the recovery of europe

has been a bit of a disappointment in terms of the amount of economic growth. brexit was unforeseen and is an issue. u.k., youk at the want to price with more margin for error. it is a great opportunity -- economy, but there is some unpredictability. for us, europe is a selective market. we have to find a company we think we can do something fundamentally to transform it. growth will be harder to come by and the european economy than the u.s. ago, warrenyears buffett was on the stage talking about long-term capital. how is that process going and raising money that you hold for longer and still able to deliver the returns? joseph: we spoke with our investors six years ago to hold us -- a different kind of asset.

these assets afforded a lower cost of capital. private equity had one structure, you hold assets for three to five years and hope to generate 20% returns. we generated a vehicle and raised about $5 million to buy high quality companies with high predictability and it has gone well. we have made three investments and we are about to make our fourth. jason: you talk about valuations in europe. take us back to the united states. are you seeing any weakness? prices have been high for quite some time. joseph: in the last year, wide swaths of the market have been repriced. smaller gdp growth businesses, industrial concerns, our trading 20% to 30% higher than a year ago even with the recovery from

the december lows. repricedors have been and it takes a while to translate into the private market. sellers of assets will have to realize prices are coming down. jason: fair to say, you could use more volatility to make some deals? joseph: volatility is the friend of a buyer of assets. are you a net, buyer or seller? joseph: we will probably buy or sell you equal increments -- in equal increments. we tried -- try to be as disciplined a buyer as we are a seller. the market is difficult because valuations are elevated, particularly for higher growth businesses. , it isdried powder how much doe mind,

you worry about that wall of money that needs to be put to work? joseph: i worry less about that. valuations are function of where the market is trading. there is always undrawn capital. it is about the capital markets -- muchent must less less than dry powder. jason: interest rates, do they were you? joseph: it could be a black swan if they were to spike up but i do not think that will happen. jason: joseph baratta from blackstone, making his way back to europe and addressing the masses at the super return conference in berlin. francine: thank you so much, great work. many headlines from jason kelly's interview with joseph baratta at blackstone global. the super return conference is going on throughout the day.

let's get straight to the bloomberg first word news. today, there is a sign tensions may be easing between india and pakistan, india -- it was that attack that led to the worst military standoff between the countries in half a century. pakistan says it would consider releasing this indian pilot. his fighter jet was shot down and india says it will not negotiate for his freedom. former trump lawyer michael cohen opening the president to a number of legal risks and unfurling a series of explosive accusations and a dramatic day of testimony before a u.s. house committee. viviana: it was my experience that mr. trump inflated his total assets when it served his purposes, such as trying to be listed amongst the wealthiest people being "forbes," and

deflated his assets to reduce his real estate assets. republicans rail democrats for allowing an admitted liar to testify. the founder of bridgewater associates giving credit to the u.s. federal reserve and says it in peers less inclined -- it appears less inclined to hit the brakes on growth, lowering the chances of a recession to just 35%. 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. hurtado.ana this is bloomberg. kashmir,s you about there are new headlines out including a statement from pakistan. pakistan puts troops on high alert along some form of the cashmere border, and india says rhey have yet to -- kashmiur

border, and india says they have yet to receive an offer regarding the pilot who was shot down yesterday. we will continue to watch. stay with us worldwide. ♪

♪ this is bloomberg tom keene in new york, francine the quad in london. -- francine lacqua in london. u.k. businesses plunging to a seven-year low and consumers are pessimistic about the economic outlook with the government failing to provide clarity on the future relationship with the european union. george seller bellows is still with -- george saravelos is

still with us. this is the pound three-month implied volatility. are we underestimating the fact that we have no clue what kind of relationship we will have with the e.u. so the volatility on the pound will increase significantly? it is essentially splitting it into two stages, the risk of a hard brexit and the future relationship. what has happened the past few weeks, we have taken out the risk of the hard brexit. that shows that the market price out that tail risk. that is a fair thing that happened. if you look at the vote that went through yesterday, parliament overwhelmingly voted in favor of an article 50 extension implicitly. can we price the deal over the next two to three weeks? there is more positive repricing if we can get that through. francine: is there a danger the

market is pricing in no brexit? what we heard from jeremy corbyn is a second referendum. george: if you look at the levels of sterling and trade weighted, it has priced out the risk of a hard brexit. i do not think it is pricing .uch positivity of it happening we have priced out the negatives so now it is a question of pricing in the positives. francine: what would be an ideal scenario for the markets? what it the this deal? -- would it be this deal? hardline brexiteers are saying they will be happy to meet theresa may halfway. brexit,to get to know you would need to go through so long-term article

50 extension. the two things to watch, negotiations with the europeans, the concessions around the backstop, and once that is done, can theresa may bring over the line? it is a matter of a few weeks, i think we will know soon. can i make some money in the next 90 days? what is a deutsche bank opportunity now? george: we are still pretty positive on emerging markets in terms of carry trades and earnings of yields in the low volatility environment. we think the dollar will be quite weak. on the back of two shifts from last year, one is the big thing with the fed. the underlying change is the change to the policy framework,

average inflection targeting and 10 years of low inflation, so it can be through 10 years where inflation is about 2%. that is positive for risky assets. the other thing is this shift in political risk premiums. very high and the rest of the world, quite low in the u.s., but we think this will shift because brexit concerns are potentially receding but people will focus on the 2020 election in the united states and the dollar as opposed to the rest of the world. tom: george saravelos, thank you so much. of 22nd prime minister pakistan, this is mr. khan. educated, mr. khan is driving forward the new politics

of pakistan and he is looking for a move. "he headline says it all, does not have any good response" from india as they try to simmer down conflict. this is bloomberg. ♪

♪ tom: mr. khan of pakistan speaking now, looking for a good response from india and has yet to receive it. and today three and in a sharply three and in a sharply worded tweet, do not forget those who died in the terror attack. , or going back to 1947. we are here with harsha subramaniam and mumbai. frame for our global audience

the forever distrust which was developed some 10 years ago, define for our global audience how the cashmere debate, the debate of -- kashmir debate, changed things from 10 years ago? harsha: it has been a long history in the making. over the last four or five decades, we have seen wars and recently, terror attacks in mumbai that accelerated tensions. the reality of 2019 is this -- concept,s a serious there is a serious concern. 40 police personnel were killed, this just adds to the series of events that india and pakistan

have witnessed over the last 40 years since independence. oh political leader, on both sides -- no political leader, on both sides, has been able to build trust and create credible piece between the nations -- peace between the nations. mr. khan is asking for credible action against those operating in this attack in pakistan, both of them holding on to their positions. for this to break, concrete action has to be taken. tom: can outside actors step in and assist? the united nations in kosovo and serbia years ago, can they come to the rescue, or another agency? harsha: the stated position of india is that this is a financial issue and does not want other participation.

pressure used national to put pressure on pakistan to act against terrorist organizations that receive support from pakistan. the first assault on india came diplomatically, asserting its financial power on pakistan and that those behind the attacks be handed over. india has reached a point where we want to see pakistan walk the talk. francine: thank you. what does it mean for local assets? george: one of the additional competitions as you have the elections coming up in a couple of months and that reduces the room to maneuver. from a market perspective, there is other issues around the

outlook -- outcome of the elections. our main view for the rupee is volatility. we think volatility will be low, with india being the exception. our trade recommendation has vol.to buy applied fall -- tom: george, thank you so much for being with us. .t has been extraordinary we greatly appreciate your attendance. kevin cirilli is with us, martin grisanti.and chris this is bloomberg. ♪

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the president abruptly ends the hanoi summit and says, sometimes you have to walk. concede to a complete end to sanctions. the president comes home to his disbarred attorney testifying to lies and criminality, saying "mr. trump did not tell me to lie to congress." we consider the search for value, dollar up 11%. good morning, everyone, this is bloomberg "surveillance." london, keene, in francine lacqua and haslinda amin holding court as she can. let us begin. just moved over to brexit?

do we need a brexit update today? one, but we do need maybe should take priority two or three given what happened in the summit in hanoi. they were all smiles and flatteries and suddenly it seemed the legwork have not been done so the leaders could agree on anything. if you look at brexit, we will have a vote before march 12 to see whether theresa may can get the vote through. the tensions between india and pakistan should not be underestimated. tom: prime minister khan speaking in pakistan, with some sharp words, looking for a good response from india. harsha subramaniam is helping us out from hanoi -- from them by also. -- mumbai. it is 1714 miles, that is a long train trip back for mr. kim.

what we have seen is trump, trump. what about chairman kim over the last 12 hours? ,aslinda: going into the talks the main focus for kim was to get the u.s. to ease sanctions. sanctions have been imposed and tightened, and russia and china have been on board, so it has been tough for north korea and its economy. i think he goes back disappointed, but president trump says he is not in a hurry to come up with a deal. he was more than happy to walk .way, no lunch, no deal he did say that talks did not really fall apart, they just did not manage to push through to advanced negotiations. the two sides will continue to talk. there are differences they have to work out. tom: haslinda amin in hanoi,

thank you. there is some movement on currencies, particularly in asia , the euro back out to a stronger 1.14. on the dow, we enter march tomorrow. i am noticing a change in the german ten-year yield, it is finally higher. point, ap one basis higher german ten-year yield of the last three days. francine: we did have a couple of data points from europe. were down.eneral disappointing manufacturing data out of china. gold and yen climbing, european stocks down. we saw quite a bit of pound strength over the last few days, 1.33. with some ofegin

the activity you have missed overnight. here is the president ian hanoi. -- in hanoi. we do not have that now. my fat finger went wide of the button. i will go to the news report from "the new york post." i do not know if mr. trump has seen his copy, but i thought this was a public good as we brought in martin schenker. image to capture the bipartisan reality of mr. coco. -- mr. cohen. marty: his testimony did not change anyone's mind. if you thought he was a virtuous truth teller, he did well. if he is a felon, he did not change any minds. tom: let's go to someone who actually knows what he is

talking about, professor feldman of harvard university writing -- the most important sentence mr. trump did not directly tell me to lie to congress, that is not how we operate. the rest of the essay is brilliant. the last paragraph needs to be bronzed. declining to give the order directly is a time-honored way for leaders to do their dirty work, stretching back to the kings of the bible and henry the second seeking the death of thomas becket. that is the company trump finds himself in. and no one impeached king david or henry the second. marty: he is absolutely a right -- absolutely right. there was no direct smoking gun evidence of illegality, or

certainly high crimes and misdemeanors you would need for an impeachment. francine: it seems to have opened more fresh allegations. what did we learn from michael cohen yesterday? where do people and democrats try to get president trump? marty: when you get down to it, a number of his new allegations did not have documentary evidence. one of the more startling pieces that michael cohen gave us was that donald trump new about the advanced leaking of those hacked emails through conversations with roger stone, but there is no documentary evidence. muellerssible robert the southern district of new york has that, but it did not come out yesterday. francine: well the president have to release his tax returns? marty: that is up in the air. the house ways and means committee is the only part of government that can demand an

american's tax returns. there is talk about doing that, but it is an extremely slippery slope to start using the government to pry into the financial privacy of individual citizens, even if it is the president. tom: what an emotional day yesterday, just extraordinary. for a certain vintage, there is always something about the images of hanoi. we have a chairman moving 1700 miles and we forget there is another country involved. the president of south korea has spoken to president trump, and the partreat regret on of president for not first calling south korea. this is the most important thing, that we do not forget south korea. was that a risk? was, and i do it

think a lack of diplomatic preparation for this meeting was shown by not having an agreement. these things just do not happen on the spur of the moment. there needs to be tons of preparation and you need to go into the meeting knowing what you will get coming out. tom: you have way more experience than i do. i remember professor paulsen and 20, 40 people getting him to an event in washington. from the body language you saw this morning, the body language is secretary pompeo is saying his president cannot move forward. marty: there was a lot of speculation that donald trump, desperate for a victory, when give up concessions to north korea in order to say they have a deal. that did not happen, and you have got to give mike pompeo some credit for that. francine: let me bring everyone up to date with a headline that

just crossed the bloomberg terminal from the prime minister of pakistan, saying they will release the captured indian pilot on march 1, friday. we did hear from pakistan that india was not willing to negotiate the freedom of this pilot. with your extensive time in washington, in the past, we therstood that administration has gotten involved between the u.s. and pakistan. did they not want to get involved, and what does it mean for china coming in and possibly being a moderator? inty: you are spot on raising this issue of america pulling back from world engagements. it has clearly been a vacuum created by the trump administration's unwillingness

or disinterest in getting involved in regional conflicts. thatesults are palpable china is using that vacuum where they can. leaders in the united states would be calling both leaders of india and pakistan to reduce tensions, and that clearly did not happen. rupee, a is the indian stronger indian rupee. is release of the pilot scheduled for tomorrow, march 1. that is far before london and new york. we continue to see a bid on the indian rupee. we have much more to talk about. coming up, this is an important voice. senator rick scott of florida, what an election battle that was. let us now listen to michael cohen.

michael: i know what mr. trump is. he is a racist, he is a con man, and he is a cheat. >> you are a pathological liar. you do not know truth from a lie. michael: are you referring to me or the president? follow the that president blindly like i did will suffer the consequences. threatenou seen him physical harm? michael: no, he would use others. i have fixed things but i am no longer your fixer, mr. trump.

♪

this is bloomberg "surveillance peter: pakistan, thefrom prime minister speaking live on television says he will release the captured indian pilots tomorrow. his pilot was shot down yesterday over the disputed kashmir reason. -- region. he called -- tried calling indian prime minister. president trump says sometimes you have to walk. with northin vietnam korea ending early after demands were rejected, the president speaking to reporters in hanoi. >> basically, they wanted the sanctions lifted in their entirety, and we could not do that. they were willing to do new -- denuke a large portion of the

areas we wanted but we could not take away the sanctions. we had to walk away from that suggestion. said the u.s. presented kim with additional secret nuclear sites and that surprised him. the first official gauge of the manufacturing sector to her -- sector signifies contraction. there are a number of likely causes. daliofund billionaire ray says there is less chance of a u.s. recession now. the founder of bridgewater associates giving the credit to the u.s. federal reserve, saying it appears less inclined to hit the brakes on growth. dalio lowered the chances of a recession before next year's election to 35%. 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 her tonto.

hurtado.a her tonto -- be nice to move away from international politics and talk about what you talk about at home. i am going to cash. santi memo.w the gri amazon by roku, berkshire, buffett. facebook, where were you on january 14? buys grisanti had the tickets out. march and it is comfortable to go to stocks, not cash. all my radar is up. do you acquire shares march 1? christopher: we acquire shares, but you have to be more selective.

the week before christmas was the first time in a few years we had real bargains across a number of sectors, and that is gone now. tom: this is a correction chart of the bear market, and let's focus on correction, bear market, doom and gloom, up we go, moonshot. everything has gone up. it is a double-digit year. why don't i just go to cash? christopher: it could be a lot better by the end of the year the now, which flies in the face of consensus. everyone said you could not have a recovery, so far, so good. tom: is a type to thing. the gloom, you cannot frame the gloom. chris: right. we climb the wall of worry. important, because

we need to bring in francine lacqua climbing the wall of brexit. francine: when you look at trade concerns, how will that affect earnings? chris: trade concerns in interest rates are the two biggest factors over the next six months. if you get six months down the road, we will have a more benign trade environment than we do now. as you can see by the chinese statistics that came out, things are not great. they need more momentum as they are cutting rates, but they need a trade solution. francine: what about confidence? wasone from ubs earlier on looking at confidence boosted by politics. do testimonies like michael have an impact on the psyche of consumers? chris: i do not think they are nearly as important as what jerome powell will say or what will come out of the chinese

trade talks. the piece of good news this week was the postponement of tariffs. that had a lot more good for the market than the michael cohen testimony was bad yesterday. tom: chris grisanti, thank you so much. this is going to be wonderful, a well-timed interview, keith hollis in the congressional budget office. they plug and chug like nobody else, looking in a political matter, a political if you will litical if you will. this is bloomberg. ♪

♪ this is bloomberg "surveillance," tom and francine from london and new york. the pakistani prime minister says he will lease -- he well release -- well release the captured indian pilot tomorrow. times that theny state of peace or the fate of war all depended on what happened with this pilot. after tomorrow, are the tensions really de-escalated? >> that is a good point, and it does lower the tension.

india has been saying it wants to see pakistan take concrete action on terrorists, including leaders of the groups who have claimed responsibility for the attack on indian troops this month, before it can go ahead and talk. , because elections are coming very soon, voters have been demanding the pilot is returned. it would be naive to believe there is a solution in sight yet. francine: when you look at both leaders domestically, modi is contending a general election and khan is facing a military seeking to assert its dominance. how does that play into the peace between the countries? >> pakistan is in a bit of a

financial problem. foreign-exchange reserves left and has been going to the imf, russia, and china to get funds. that must be what pakistan is thinking about. powerfulary is a very establishment in pakistan and what they decide does not have to. modi will usedia, this to show he is taking a tough approach toward terrorism. that no doubt will go very well with voters. tom: there is the length of pakistan, which borders on two pakistan's as well. who was assisting pakistan in the last one a four months -- 24 , is china and influence?

arijit: as you know, china has been building the belt and road project. money has been invested into pakistan to build a road that goes to the port into china. china has been getting a lot of attention in pakistan. francine: he has been covering this extensively. ash more from hanoi president trump walks away from the summit with kim jong-un. the market implication and what that means for foreign policy in the u.s., this is bloomberg. ♪ this isn't just any moving day.

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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. all of you. how you live, what you love. that's what inspired us to create america's most advanced internet. internet that puts you in charge. that protects what's important. it handles everything, and reaches everywhere. this is beyond wifi, this is xfi. simple. easy. awesome. xfinity, the future of awesome. ♪ tom: good morning, everyone, bloomberg "surveillance," an extraordinary day. keene atlacqua, tom

59th and lexington, we welcome you all live. viviana: president trump says sometimes you have to walk. the summit in vietnam with kim jong-un ending early after u.s. demands were rejected. the president speaking to reporters in hanoi. >> basically, they wanted the sanctions lifted in their entirety and we could not do that. aey were willing to denuke large portion of the areas that we wanted, but we could not give up all the sanctions, so we will continue to work and we will see . we had to walk away from that suggestion. viviana: he said the u.s. presented kim with evidence of additional secret nuclear sites which surprised the koreans. scaling back expectations for a sweeping agreement with china,

robert lighthizer telling a committee there is still a lot of work to be done on a trade deal. after it is reached, it will be tough to implement. president trump indicated he was planning to sign an agreement with xi jinping. trump may have to drop tariffs on steel and aluminum if he wants a new north american trade deal. business groups want the tariffs lifted on canada and mexico, who -- toreatening to ratify not ratify the agreement. you can see the rising floodwaters swamped 2000 homes and other buildings. reached itsriver highest level in 25 years. 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 her tonto p -- viviana her to auto -- hurtado

. tom: we like to give conversation that drives forward advancement of a topic. hanoi and dash to kevin cirilli will now be state department expert. how did secretary of state pompeo do in hanoi? kevin: they walked away from a potential deal. president trump said quite simply accompanied by secretary of state pompeo they were not inling to lift sanctions exchange for closing a nuclear site. he also said they presented north korea into the koreans that caught the dictator off guard, that they have intelligence that there is additional nuclear sites within north korea.

or is next scheduled meeting for the future and no next step as for now. the president is heading back to --hington, d c where he is washington, d.c., where he is facing the testimony of michael cohen. tom: can we understand there will be a storm of criticism by folks saying, this would happen in singapore eight and -- singapore and hanoi. is there a lot of political i told you so? -- they suggest style, while's catching kim jong-un off guard is not the traditional policy in terms of arranging an organized structure where you go into the

summit like this, knowing the outcome. the outcome was very much unexpected. you have a situation where the future is uncertain on the korean peninsula and with the geopolitical chess game unfolding with china. to playing his top diplomats to meet with north korea to get a lay of the land. the russia component to this, russia very much a shadow over these negotiations. the geopolitical chess game continues for this president, who now is unsure of where to go from here. francine: how unusual is it for a u.s. president to fly halfway around the world to achieve nothing? was this summit properly prepared? criticism and the the fallout stateside, that many folks are starting to sort through.

supporters of president trump argue that any type of dialogue with a foreign dictator to try to achieve denuclearization is a ,ositive, but on the flipside there does not seem to be a path forward. there does not seem to be a long-term strategy. the president gave remarks before departing back to washington and said they could have agreed on a smaller deal, but secretary of state mike .ompeo was not ok with that on one hand, the president relying on intelligence and on the other hand, criticizing it. he clearly wanted to come here trying to accomplish some kind of deal and the rhetoric heading into this meeting was positive. jong-un to lure kim with the economic boom, using

the backdrop of hanoi and vietnam. then it took a turn. there was supposed to be some sort of formal signing that was mixed. -- nixed. it was simply cut short. francine: kevin cirilli on the ground in hanoi. isning us from washington lisa collins, and with us in new .ork is chris grisanti talk a little bit about what we will hear from the north korean side. we have the events as the president saw them. willwell north koreans -- north koreans say? lisa: they will be a little quiet, trying to figure out what happened at the summit and why it fell apart at the last minute. the north koreans well either returned to -- will either return to criticizing the united

states, or say this is a process and we have to keep working on it. thejong-un is committed to process and wants to have a good relationship with the u.s. going forward, so this depends on how north korea wants to spin the summit. it will be interesting to see how the north korean leader talks to his own people. francine: is the korean peninsula safer or less safe? a north korean leader's still got to meet the president of the united states twice, but the talks ended roughly. lisa: even if there had been a joint statement signed, it is not clear it would have been safer because north korea possesses all its nuclear weapons and there is no sign they are giving those up, as indicated by the national director of intelligence a couple weeks ago.

the north koreans were looking to get some benefit from the summit, perhaps going through some signs they were doing superficial dismantlement but not actual dismantlement. we have a chance to look for a process that will bring about clear and verifiable dismantlement. tom: we are thrilled to have you with us, with the center for strategic and international studies. i wish you could sit down with washington and the president and give them your encyclopedic knowledge of north korea. what is the one thing, from your you would like to explain to the president of the united states? lisa: i think i would explain to him that north korea is a very complicated country and they have a complicated nuclear weapons program. this all not be an easy road going forward -- will not be an

easy road going forward. after the summit, maybe he has a better understanding of that. if we can convince him there are gains to be made, but there is a slow and difficult process ahead, that is a good thing. tom: the president and many others talk about how they can make north korea another asian tiger and introduce capitalism. you have looked at this on almost a city and valley by valley basis within north korea. when you hear anyone say we can introduce capitalism into a medieval state, how do you respond? by saying there is two economies in north korea, the economy run by the regime and pyeongchang, and a grassroots economy that is developing markets run by the north korean people. tom: are they markets where you

can model them off of vietnam or laos or south korea of 1957? , or ise an equivalency it different in north korea? lisa: they are different. they are not exactly like the markets of south korea or china or vietnam. there are different types of markets, some are very large, theyare very small, and are efforts by the north korean people to provide for themselves , to make a living for themselves when it has not been provided for them by the regime. i think over time, these markets could develop into something that resembles vietnam or south korea in the long-term, but it will take a lot of work and investment and the long-term. north korea has to give up its nuclear weapons, or there is no starting point. tom: lisa collins, thank you.

i wrote try -- i will try to tweet out some of her work later. coming up, someone i will listen grisanti will always listen to, alan greenspan, foreman chairman -- former chairman of the fed. ♪

♪ this is bloomberg "surveillance." british airways orting 18 bowing triple sevens. of planes have a list price

$7 billion and they will be used to replace the 747s that will be retired by 2024. the world's largest beer maker is reporting better than expected earnings growth and they also see strong growth this year. they are increasingly bullish on the u.s. market share growing at the fastest pace in five years. tom: it is time for single best chart with christopher grisanti. this chart is so important with the zeitgeist that we did it with george saravelos and we will do it with a guy here invests real money. it is a doom and gloom chart, exports based off of the chinese pmi index, the financial crisis, down we go. some stability three years ago and then let's blame it on the

president, exports from china off the proverbial cliff. is it a hard landing? lisa: it does not have to be -- chris: it does not have to be. this shows the chinese need a trade deal more than americans. exports, which this chart focuses on, is really suffering in china and bringing the whole domestic economy down. tom: there's is way different from ours. tell us weerts finally see a legit consumption in japan. what is the optimal trade policy for mr. trump right now? chris: it is optimal long-term, is not best for the market. i would pay attention to robert lighthizer and make sure we have a deal that will work to trade and-- fix the trade deficit

intellectual property, and gives single access to the chinese market. francine: away from huawei, we had an ugly batch of earnings. we have to see whether we can build 5g with or without huawei. chris: there is a conference in spain today where huawei is making inroads into european companies. we have to be careful of a division between europe and the u.s. on approaching the chinese technology issues. real and long-term, probably the thorniest issue. francine: do you follow the can itogy space and 5g, be built without huawei? chris: eventually, it certainly can. there is no question that if huawei is not the lead,

certainly among the best in technology solutions, and they're pricing is such a way to gain market share in much of europe. tom: where are you on apple? you have been in apple before and they would say shares are on sale. do you enjoy apple? chris: apple is one of our long-term holdings. we have reduced it by half. there is no rush to get into the apple investment because we are in a downs i call -- down cycle in terms of the phones last year. especially on china scares with apple production, that would be a good opportunity. francine: thank you so much, chris grisanti joining us. coming up, a giant in the oil andand history industry --

-- this is bloomberg. ♪

♪ this is bloomberg "surveillance," tom keene in new york and francine lacqua in london. the signs are growing that opposition to theresa may's brexit deal are fading. the house of commons overwhelmingly backed her offer to block a no deal brexit or postpone the exit date. response from the anti-e u wing of the party shows she might the able to compromise. professor, thank you for joining us. are we going towards a softer brexit, towards a delay? will people sign up to theresa may's current deal? >> we are crawling agonizingly slowly to a vote that is finally

meaningful. theresa may put her deal to a vote by the 12th of march and her hope is that enough mps have been scared by how long it has ,aken or the threat of no deal that they will reluctantly say, we have to back this. francine: what are the chances of brexit not happening, the chances of a second referendum, and this not happening? anand: the chances of brexit not happening on march 29 are very likely. francine: that is a delay. anand: there do not seem to be davos it -- votes and the house of commons now for a referendum. table,deal is off the all of a sudden mps face a binary choice of falling out with no deal or a referendum. if it was a referendum versus no deal, i think sufficient mps

would vote for a referendum. we are not there yet. i suspect many mps do not want a referendum. tom: we love to put a backdrop of london behind you. it always makes for good tv. in wakefield yorkshire, what do they actually think? have you detected any change of leave or remain in your home where you were brought up, or elsewhere? levers levers still the and the remainders are still the remainders? anand: if you look at polling, there has been a slight shift .oward remain by 3% to 4% the shift has been made from people who did not vote in 2016, who either abstained or were too

young. there has been little changing of mines. tom: -- minds. tom: except within the labour party. what do you predict? anand: the labour party has triangulated again by saying in the event we do not get x, we may go for referendum. some people around the leader himself areer skeptical about the idea of the people's vote, so i do not think we will see the labour party giving their full support for 80 referendum. -- for a referendum. a delay really be two years? anand: there are stories the e.u. was thinking about a 21 month deal and i am skeptical. i am not sure they want the uncertainty hanging over them.

it is just two more years of waiting with no plan. even if the deal passes on the 20th of march, we do not have time to leave on the 20th of march. francine: who is the next prime minister of this country? theresa may says she will not go into the next election, but will she resign or be pushed out? anand: she said if there was a snap election, she would leave instantly. it is clear her mps do not agree with her so there will be a leadership challenge. the frightening thing is the number of cabinets there are. there are a lot of people jockeying for position so i will not even try to posit a guest. tom: thank you so much. we drive forward the discussion to a most eventful march for the united kingdom.

the president of south korea perhaps in conversation with president trump, now a conversation between esther trump and mr. abe of japan -- mr. trump and mr. abe of japan. will lookys they forward to any further discussions as well, and he will meet with mr. kim. we really need to say thank you to all of our teams, particularly harsha subramaniam in mumbai and new delhi. stay with us, this is bloomberg. ♪ so with xfinity mobile

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customize each line by paying for data by the gig or get unlimited. get $250 back when you pre-order a new samsung galaxy. click, call, or visit a store today. alix: the art of the deal.

d.c., robert lighthizer briefed lawmakers on a potential china trade deal. half-full or half-empty? china pmi slipping, but it's not all bad. market expectations boost sentiment. -- just howsale rough were fourth-quarter sales? david: welcome to "bloomberg daybreak." i'm david westin, right here with alix steel. march is around the corner. alix: how did that happen? in the markets, you are taking a bit of risk off. what that winds up meaning for a-china trade deal -- u.s.-china trade deal. right around the highs of the session.