numbers, we await the february numbers. a study says the economy is 12% smaller than estimated. norway shuns oil. the sovereign wealth fund will sell upstream oil equities to hedge against risk. david: welcome to "bloomberg daybreak." it is jobs day. it is also international women's day. we've been taking a look at some of the numbers. behind,e still a ways but they are catching up. alix: david is our token male on the program today. this is a great report from bank of america. there's a quality -- equality for women, it could be a $28 trillion impact, 38% of gdp. david: it is not a shock.

it is a remarkable number. a lot ofited states, our progress in the 1960's and 1970's was because women came into the workforce. love, the part that says it's because women live longer than men. david: you will all outlive us. s&p futures are down by 12 points. we are looking at a risk off ecbe, starting with the yesterday and then china traded data overnight did not help -- a trade data overnight did not help at all. bracesgo nowhere after a

-- voracious bull market buying yesterday. off by almost 2%. did you know that china bought is most oil -- yet, crude down almost 2%. 7:25, theresa may makes her final appeal to the eu for changes in the irish border. 8:30, we get those u.s. nonfarm payrolls for the month of february. january housefor building permits. spacex dragon capital is set to splashdown off the capsule isorida -- set to splashdown off the coast of florida. ripley is on this one.

time for the bloomberg first take. we are joined by gina martin adams and rachel evans. we know we had a blowout number last month. will there be adjustments? we are expecting consensus of the 180,000. gina: bloomberg economists are a bit higher than that number. february tends to be expectations. -- beat expectations. overall quarterly expectations, 200,000 per month on average. march is the month to watch for that downswing. there is a seasonality that impacts the numbers this time of year. alix: how are investors positioned? rachel: this has been a crazy week. we closed below the 200 moving average.ng

investors are very cautious. you see the complete reversal in terms of what was leading stocks higher towards leading stocks lower. industrials were the best performer this year. we've seen those as the worst performer the last five days. will this be a catalyst to move the markets higher? or will they find something negative regardless of what the data shows? alix: we will hear from larry kudlow at 9:30. he will find positive points in the data no matter what. david: one of the reasons we are china import and export numbers. this chart indicates on the export numbers particularly, really plummeted a lot. there's issues with the lunar new year.

is this indicating that we are having an ongoing problem with global growth? >> i think so. the nondomestic economies of the world are relatively weak. china and europe both. how much do the monetary and fiscal policy measures make conditions better going forward? this came out prior to the recent trade news. if these risks start to clear, monetary policy action starts to take shape, that should provide better growth going forward. the equity market has soared so far this year. that signal is telling you that even though this lagging data is relatively weak, there should be economic growth ahead. alix: you had brokerage companies downgrading chinese equities to sell. almost as if

chinese authorities were like we need to tamp this down now. economy.s a managed you do get signals sent by the government through state owned brokerages, state owned enterprises. people are taking money off the table and taking this pretty seriously. $345 billion erased from the chinese stock market overnight. you are seeing this reflected on the etf side. the etf's are down. they had been very popular. ie had a big change in msc where the major indexes were saying they were going to add more china to their index. going, hang on a second. we need to slow down and see where the authorities are heading. alix: the sovereign wealth fund in norway is actively selling

equities, with the exception of equainor. in 2018, they were adding to shares of most of their oil companies. we talked a while ago when you mentioned europe about the perception of energy equities there versus here when it comes to climate change and such. does this surprise you? gina: not necessarily. they are so exposed economically to the oil and gas industries. the sovereign wealth fund is overexposed as well. it doesn't surprise me that they want to receive that exposure for several reasons. these are stocks that have not worked for a while. this is a secular problem in the energy space. this is not a component of the portfolio. climate change is a huge issue. it's becoming a bigger issue globally.

it really impacts the invest ability of certain segments of the market. oil and gas is one of those segments. lity of certain segments of the market. xle, the largest energy focused etf, having large outflows in 2018. that etf is down .5% premarket. 1.5%, that tracks oil specifically. alix: gina martin adams and rachel evans, thank you very much. we will hear from steve jensen, the finance minister of norway. you can find all the charts we used on gtv on your terminal. up, more on expectations

for today's jobs report with the wells fargo asset management portfolio manager. here's a snapshot of female executive level roles -- the highest among utilities, consumer and financial sectors. real estate and energy lag. shocker. this is bloomberg. ♪

viviana: this is "bloomberg daybreak." deutsche bank and commerzbank have moved informal talks on a possible lender -- recent setbacks have added to the urgency to reach a potential deal. germany's finance minister has pushed the idea of a merger between the two. the idea is to create a

so-called national champion to serve the german export economy. the american plastic products maker has agreed to buy rbc this derails the takeover by apollo management. u.s. regulators have caused their review of t-mobile's proposed takeover of sprint. to reviewis needed the arguments of the deal. the agency wants to review significant new information. markets await today's jobs newers which could provide clues to the state of the u.s. economy. we are watching those revisions to the blowout numbers.

joining us now -- the co-lead portfolio manager of the private value equity team and stephanie flanders. what is bloomberg economics thinking? >> about 250,000. there's always a big range on the consensus forecast. it goes from 80,000 to 250,000. carl riccadonna was speaking earlier. they believe the jobs numbers will struggle with the weakness we saw at the end of last year. if we see weakness in the gdp number, the jobs number could keep powering through. david: that is the question. in the wayes economists predict, what can that do to stem this tide?

>> we look at the past times when you've had slowdowns, midcycle slowdowns, oftentimes, the jobs number can shrug that off. i'm not sure people will be 100% reassured. slowdown --mporary that story. alix: could the u.s. continue to outperform? >> i think it can. this quarter, there's been some uncertainty due to the government shutdown. q1 tends to be a slower quarter and has been for several years. that haved be numbers some change in them. , they did show weakness -- i wouldn't take it as something that means we are entering something more drastic or

seriously worse. david: it does raise the question of which data point is most important. how much is consumer and how much is wages? >> they are tied. there's more than just one data point that matters. it's important to never count down one data point. it's a collection of data points that matter to us. when i look at things, i don't get too freaked out by one thing. i look at a lot of things over time. carryknow the u.s. can along quite nicely when the rest of the world is not doing quite so well. it's been the one engine of the economy, the global economy this whole time. consumption,arket, corporate earnings, it's where the money is going into workers pockets.

3.3% wageking at growth? that is something that can keep the economy moving forward. alix: productivity increased. we got that number yesterday. could the increase in productivity offset wages? >> i think it can. you start to see consumer confidence numbers of slightly improve. housing looked like it had bottomed, maybe it starts to bounce. i do think the consumer is waiting for more positive data and possibly is stronger than most people expect. david: i assume we need to put those two numbers together -- inflation and wages. how much better are you doing? the real wages. >> you are looking at some wage

growth, which is not the case in u.k. at the moment. you have this nominal growth,, not just inflation but on the do have this nominal growth, not just inflation, but on the wages. low-inflation has helped in a lot of ways, especially with the consumer. you've seen it in the consumer discretionary sector with a lot of prices coming down for the consumer. it has hurt some of the retailers, but it hasn't hurt the consumers. alix: the reason why, a lot of the gains are coming in lower income worker jobs. what does that mean? >> that's where you start to see the wage inflation more recently. , they had tor's

take wages. and walmart and where they are amazon.ages and some of those lower-cost jobs are starting to see the wage increase. >> remember when we have these debates about if we put the --imum wage job we lose jobs up, we losewage jobs? it was jobs rather than wages. the employers are starting to give wages as well -- bringing it more into line with where the market should be. it is actually pretty positive. david: are we importing disinflation as the rest of the world struggles? >> that's obviously the

mechanism you have when the dollar is strong. we haven't had such dollar strength where that is a powerful indicator. we haven't seen commodity market so weak that that's the deflationary force, but that is something to watch for. up, regulators hit pause on t-mobile's planned purchase of sprint. it has been under review for eight months now. more on why there is a delay. that is next. this is bloomberg. ♪

david: t-mobile and sprint announced they are all stock merger almost a year ago. yesterday, things got even more difficult -- or did they? here to explain, jennifer. the ftc says we need more time

says we need more time. ,> a lot of the new materials we need more time to review and for third parties to comment. this is pretty common when new evidence is submitted. david: give us a sense of how difficult it is to get this done. the third and fourth player want to merge, people say we don't like this. concentratedncer market. the top four make up 99% of the market. the concentration numbers are tough. what these agencies will look at is the extent to which this concentrated market postmerger can be more open to coordination. there could be a price increase that happens because they could

.bserve each other more easily 5g is an imperative. the nation's leadership in 5g is at stake. t-mobile and sprint together are the only companies that can change that. 5g is critical for the country. we will change that. david: is this going to be a straight up competition analysis or will the concerned president trump has expressed about our being competitive with china bring up huawei questions, second, we can't afford to be this scrupulous now? that theyargument will have these procompetitive efficiencies, being able to

compete in 5g nationwide and allow the u.s. to compete is the procompetitive side. andcies will look at that weigh it against the potential for harm in the market and see which one wins out. these companies understand there's 5g importance to this administration. maybe this time, we can do the deal because of the 5g issue. alix: what kind of precedent is that? the issue here is the theory, thesein regulators are supposed to do that balancing test every time. to be honest, a court has never accepted the deal based on that argument. it doesn't mean the agencies haven't cleared a deal based on that argument. sometimes, we don't know the rationale for clearing a deal. she says i will

apply traditional competition analysis and both france and germany are so upset, they say they want to change the competition law. >> exactly. if you look at this traditional application, if the doj applies a traditional application, they might have trouble with this 5g argument. efficiencies merger specific? both of these companies were talking about 5g networks before they were talking about a deal. himselff the president were to conclude this is important for our country, will he elect to express that? there is reporting that the president did try to intervene to stop the at&t merger. >> many think there is some

stickiness there. doj and ftc will want to look like they are too influenced by the white house -- fcc will wantnd not toolike they are influenced by the white house. alix: coming up, china's big market slump. the downgrade from a brokerage firm sees 50% downside in chinese equities. this is bloomberg. ♪

alix: this is "bloomberg daybreak." happy jobs friday. yesterday, the selling started with the ecb lowering their growth projections despite the fact that they are in the market with dovish commentary,

extending short-term loans and pushing back the rate hike forecast. nonetheless, the pessimism weight in markets -- weighed on markets. s&p futures off by 11 point. european banks getting hit pretty hard as well, down 1.5%. energy shares getting really hammered over in europe as well. yesterday, it was a monster strong dollar story. today, the dollar giving back some of those gains. euro-dollar off by .2%. yesterday's rally in the bond especially unreal, when it comes to germany. yields moving 6-8 basis points. six basis points is where we sent. you get to negative, you have to imagine that doesn't help the spread, either. david: mario draghi is a smart man. he must have known this was going to happen.

alix: so much for the lows in the bond market. have we bottomed in bonds? nope. morning.good the trump administration is drawing up demands germany, japan and other countries pay to getice -- one way nato companies to spend -- countries to spend more on defense. theresa may will make a last-ditch plea on brexit to the european union. it live onry bloomberg television. tell thae eu that the outcome of the historic vote is in their hands. china over reported its growth

china inflated-- its gdp rate by 1.7 percentage points between 2008 and 2016. no response yet from the chinese government. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. david: the european central bank shook markets yesterday with its projections for softening growth in europe. overnight, china released import and export data sharply down, down even more than expected. ntill with us, an merletti and stephanie flanders. there was a lunar new year. expectation, down 5% more or less. what does this tell us about the state of the chinese economy?

it definitely is a bit worse than we thought. the first few months of the year, we feel like global conditions have gotten a bit better, there's optimism around china trade, a deal. that has fed into more optimism about momentum over the course of the year. right now, none of that is having an effect on the real economy. we haven't had a trade deal and the softening of financial conditions has not had an enormous effect on real activity. china is on the firing line for that. the weakness from europe feeding through to the export data. we can certainly see a risk here that trade gets a bit more hammered than we expected over the next two months by the slowdown generally, not just the tariffs. david: how much of this global slowdown is because of trade? the overall amount of global trade is coming down rather

substantially. if that continues, what will that do to global growth? stephanie: it puts an enormous question mark on china. will they soften the blow? they've had some reaction of policy but they haven't tried to crank up the economy. or do they actually look for a more dramatic change, less focused on u.s. exports? most of this global recovery has -- we had flatde global trade growth for five years. imported the third highest level of oil. play the u.s. side here. what get a trade deal, surprise upside might you see in u.s. equities? ceos and cmo's of

companies to have some optimism to go ahead and spend again. you saw that with the tax cuts where they felt better at the beginning of last year to go out and put money to work and spend on. on capex. they slowed that down, especially multinational companies. if you have a trade deal, you get some optimism in the multinational big companies to go ahead and start those capex plans again. that could help domestic growth in the u.s. david: let's assume that all happens. that's great. how long before it shows up in productivity? ultimately, the growth will come from productivity. ann: it will take a couple quarters before that starts to show up in the numbers. the market will project that.

we talked earlier about the fascinating,t is the market in the fourth quarter predicted the slowdown in the first quarter. the market is a projecting tool. we are sitting here with a softness in the first quarter. the market already predicted that was going to happen. we getstart of the year, the huge start, huge gains based off of some hope. now, we are getting a slowdown just in case because it might not happen. i haven't given up all hope. stephanie: we have waited for that capex for quite a long time. ann: it has happened in domestic companies. look closely at the domestic focused companies, they have put that money to work. they have gotten the biggest gain from the tax cut. cornerstone macro put out a they broke out,

the multinational companies from the companies that are most domestic based out of the s&p 1500. the companies that got the biggest tax break actually spent more money on capex than the multinational companies. alix: we are also watching brexit. live shot of theresa may delivering her speech in grimsby. this is her last pitch before the vote next week. david: she's putting it to the eu. this is it, guys. you have to come through or it's all going to blow up. at itshe cable rate lowest level since the end of february. merletti, thank you for joining us. stephanie flanders will be sticking with us. after shares falling norway's sovereign wealth fund announced they were selling their oil asset.

the country reduces its exposure to oil market. , where we are joined by siv jensen. >> we saw the norway's sovereign inlth fund take a halfstep divesting oil companies -- thank you for joining me. a lot of people don't understand , why not integrate oil companies since you explore for crude? expresses -- removing a betterpanies will be attempt to reduce our aggregated pressure -- >> the biggest integrated companies are the biggest ones

for expiration. that is al confident hedge when they are the biggest ones? >> the integrated companies are also the companies that are set to invest more in renewable energy. we don't think it is recommendable. expect the do you companies to invest in renewables? >> what we see for now is the investments are growing. it is an interesting market. would not beund able to invest in those companies in the future. >> if time goes on and they are not making investments in renewables, do you look at this issue again and possibly dropped droprated companies -- a the integrated companies -- possibly drop the integrated

companies? >> we have submitted a paper to parliament to make a final decision. this will be a slow process. monitoring howly to develop the investment strategy for the fund. we will do it slowly and with analysis behind it. >> the next step, it goes to parliament. reflects decision today a political compromise? >> no. this has been a long process based on advice given to us by the central bank and expert groups. we have taken our time, basing our decision on financial issues only. i'm thinking about things like future oil and gas ipo's -- aramco comes to mind.

will the sovereign wealth fund be able to buy into future ipo's? >> we have taken a decision today when it comes to this a specific group of oil and gas companies. at the same time, we've been very supportive of growth. the fund is invested in thousands of companies globally and has a small amount of investment in each of these companies. that is the strategy that has served the fund well. it's all based on the financial views. >> are you concerned about reports of large nordic banks implicated in money laundering scandals? could this damaged doorway -- damage norway? >> all countries are worried about money laundering. we are taking steps through legislation to fight money laundering. that is on the agenda constantly, also in norway.

potentially considering whether to let the fund invest in renewable energy infrastructure. there were green mandates. will he brought in the mandate to those cases -- will you broaden the mandate to those cases? >> we will expand the white paper. >> ok. you have two ministers who are female -- federal ministers who are female. really, females dominate politics in norway. one thing you would want to be changed -- >> to empower more women. , there'se population no reason for them to not take steps into leadership in different companies, and politics globally.

it's good for decision-making. >> we have seen a lot of markets move off decisions you've announced. you are arguably the most important woman in the markets today. >> we've made a decision today based on reducing the aggregated oil price risk in the economy. it has been well announced. when people realize this is a balanced decision, it will come down. >> siv jensen, thank you for your time. that was the norwegian finance minister, siv jensen, speaking to me in oslo. david: thank you to ann marie . alix: more on theresa may's final appeal for her brexit plan, coming up. currently.king take a look at today's jobs numbers and celebrating

international women's day. more women equals a better result. see the orange bars, 25% of the executives are female. you see what happens to their r.o.e. higher than the rest of the s&p. this is bloomberg. ♪

viviana: this is "bloomberg daybreak." el-erian, mohamed bloomberg's opinion columnist. alix: theresa may making her

final appeal for a brexit plan. you can see her speaking live in grac grimsby. what happens next week? stephanie: you had a lot of optimism in your description saying this is the final plea. i'm sure it's not her final plea. there will be many more please before the vote. -- pleas before the final vote. there was a flurry of optimism that the hard-line brexit deal will come into line. that,ess optimism around optimism coming out of those robust discussions. -- weteresting dynamic should say a bit about grimsby. one ofvery nice town, those towns that voted heavily for brexit.

go to those to areas to talk about investments that will be made in these areas. can the rebellion offset the tories voting against her deal? david: if we don't vote for this, we may never get brexit. has,anie: the problem she her deal is even more unpopular than the eu. she's managed to unite the country but not in the way she wanted. david: stephanie flanders, thank you for joining us. coming up, prep for lending. capsule set to the atlanticing in ocean. here's a list of some companies

that have the longest tenured female ceos. live from new york, this is bloomberg. ♪

david: here's what i'm watching. , more specifically the spacex crew dragon. it's on its way back to earth after successful launch and docking with the international space station. -- justmatthew bloc about right now, they will start the deorbit process. what is that deorbit process? what will happen between now and when it is supposed to splash down in the atlantic? burn,y will do a deorbit fire eight rockets on the crew dragon for just over 15 minutes.

that would slow the dragon down, allow it to come out of orbit and essentially start its reentry into the atmosphere. that process burns 15 minutes. then the reentry starts in about an hour from now and we should have a splashdown. we will lose visual contact with the crew dragon once it goes through that. then we will be looking to the skies. to parachutes will deploy bring it safely back down to a splashdown in the atlantic ocean. david: explain to us the crew dragon part of it. this is different from the cargo capsule. it may make it a bit more complicated on that reentry. >> that's right. this is the second version of the dragon capsule. it has been designed to do two

things. up to seven astronauts into space. in the future, it could be used for the cargo trips. youplan from here is that will see a crew version and that will be reused for cargo. one of the big design to haveces, it has rockets to help with emergency situations. that has adjusted some of the design. the parachutes will be quite critical in the next hour or so to demonstrate this new design to bring people back to earth safely. at what waslooking

happening with the crew dragon. everyone hoping for a successful splashdown today. there will be another test in june before a july flight. that timeline could slip. that is the current timeline. that ist just a spacex part of the new push to take astronauts back to the international space station. boeing is also involved. boeing and spacex's were awarded $6.8 billion in contracts. the star liner is currently undergoing testing. it will have further tests in may. it will try to take astronauts into space in august. both companies looking at the commercial use of these rockets.

they are hoping to offer spaceflight to tourists in the future. we hear a lot about the roominess and spaciousness of these capsules. airbus is not involved in this, but they have a contract with nasa for orion, a manned space mission plan for november. david: why are they splashing down in the atlantic? shuttle landing on a regular runway. >> we will see. the atlantic is much closer to the florida-based, easier to recover. spacex had originally planned to use the rockets to help a

land-based touchdown. they banded that project a year --two back that's abandoned they abandoned that project a year or two back. alix: thank you very much. the deorbitconfirms process has begun. you are looking at the johnson space center. coming up, we continue our jobs they coverage with the associate a general -- societe generale chief economist. this is bloomberg. ♪ you.

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this is beyond wifi, this is xfi. simple. easy. awesome. xfinity, the future of awesome. comcast business built the nation's largest gig-speed network. then went beyond. beyond chasing down network problems. to knowing when and where there's an issue. beyond network complexity. to a zero-touch, one-box world. optimizing performance and budget. beyond having questions. to getting answers. "activecore, how's my network?" "all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast. alix: jobs day, brace for impact. markets await the february

employment report. -- exportsgh day fall, equities think the most since october. the most since october. yields in negative territory. is europe at risk of turning into japan? david: welcome to "bloomberg daybreak." it is jobs day, but it's also international women's day. alix: a perfect segue to a strong leader in europe, once again campaigning for brexit. like a delaygs could lead to a second brexit referendum. the chances of a second referendum have grown since january. this is the head of a historic vote next week in parliament -- ahead of a historic

vote next week in parliament. david: this is your last chance to make some accommodation to the backstop. it is a complicated speech, saying there is an increased chance of a second referendum. it doesn't say we will leave without a deal. alix: government policy is still to leave the eu, but compromise is necessary. a reporter is asking if she will apologize to companies and people for the uncertainty brexit is causing. cable rate off the lows of the session. markets decidedly risk off. it started with the ecb and then went to china. that is now spreading to europe and the u.s.. .3%.dollar up is it a good bounce or a relief

rally? market buying yesterday was spectacular. more buying on the margins, particularly in the courre debt in europe and in the u.s. butay dumping oil stocks, not the majors. good numbers for oil in china. the norwegian thing times not as dramatic -- for the morning brief. 8:30, we will get u.s. nonfarm payroll numbers for february. then january housing starts. the space x dragon capsule

will splashdown off the coast of florida. staying with the jobs release number, economists expect 180,000 jobs in the month of unemploymentt the rate went down to 3.9%. joining us now, subadra rajappa and constance hunter. our bloomberg intelligence people are saying it could be higher. constance: it could always be higher or lower. this is one of the most volatile numbers there is. we sacrifice accuracy for timeliness. this comes out at the end of the month. at what jobs are going to be -- with labor force

participation and where we expect unemployment to be in the next several quarters, we are looking at an average of about 200,000 for the first quarter this year. that would suggest lower payrolls. david: these are remarkable numbers. go back five years, nobody would have predicted this. what does that say about the state of the economy? subadra: it is pretty strong. there's one shining spot, the jobs picture. things have been steadily improving. we are averaging about 225,000 jobs a month. it's really a positive story on the jobs front. the question is for the bond markets. is this mostly about global growth and the slow down there? meld with asn't strong consumer and strong jobs

number. are we overbought? subadra: i think so. the u.s. bond market feels a bit overbought relative to fundamentals. it is reacting to the global picture, the ecb. is there more weakness than we think there is? we've had china revise its expectations for growth to 2.6%. meaningful story on core countries in europe. david: how do we reconcile this strong jobs story, wages increasing, with the forecasts for longer-term growth? look at global growth, economists saying we will not grow that much. constance: regions are increasing relative to where they were. they are still low relative to

previous expansions. then there's the distribution of those wages from low levels. decades,past several we have stopped adding middle adding low pay jobs and high pay jobs. population ise only growing at 0.3% every year. we got really good productivity numbers yesterday. we're looking at a potential gdp of 2.1%. that is why people are expecting it to drift down to that potential gdp level. alix: the labor force participation rate has been rising. can it continue? there's more slack in the market. or you are reducing the amount of slack that is out there. how do you view it?

constance: the types of jobs that were created in the beginning of this expansion, many people were in jobs that weren't there best use. there's a little more slack in the labor market as they rotate into their best use jobs. we are seeing the participation rate move up. the people that architected the tax cut will tell you this is because we've lowered taxes on wages. it's a greater incentive to work. subadra: it's all the women coming into the workforce, which is a positive. david: for the united states, it's the men staying out, actually. it is still not close to historic norms. other countries like japan have a much higher participation rate. subadra: that's what's been weighing down the participation

rate for years now. are we able to pull workers into the workforce and keep them there? down,have been slowing which is why we've seen the participation rate pick up. that is something i will be looking to see. the fed chairing highlighted as being one of the positives for the economy. david: at the same time, if it takes up too much, does that mean inflation is around the corner? subadra: no. exactly the opposite. effect is ifdiate there's more people entering the labor force, there's less pressure on wages, less demand for inflation down the road. alix: what is your favorite trade? margin, given the

fact that we continue to get good data, i like being short bonds here. reluctant short. bonds are displaced relative to fundamentals. what makes sense is to have some steepening exposure. see the next year, we will the potential for the u.s. economy to go into recession in 2020. if that happens, you would see a deep steepening of the curve. david: that is not a steepening you want. there is this dichotomy that the u.s. economy is really strong. the nicest house in a bad neighborhood. if we have spillovers from the international economy, especially china's debt situation, if that spills over

to the global economy, i don't think we would escape a recession. --x: is there another case what do you do with bonds, for example? subadra: that's what is a struggle. a good example is the last employment number -- we saw a decent selloff in bonds. to anchor continue treasury yields across the curve. it is a global world. you are seeing more re-coupling of global bond yields. last year, the story was decoupling of global bond yields. now, you are starting to see more re-coupling. correlation will be very much in play. alix: subadra rajappa and constance hunter will be

sticking with us. coming up, stocks retreat. break -- head to break, we are waiting for spacex's dragon capsule to head back to earth. it is a super dark shot. david: it's entering the atmosphere right now. noseconeclosing the right now. alix: we are waiting for it to reenter the atlantic. a big moment for human space travel. this is bloomberg. ♪

viviana: this is "bloomberg daybreak." the new york yankees are close to a deal to buy back the network -- the network broadcasts yankee games and the nba's brooklyn nets. it is the first collection disney is selling since acquiring 21st century fox. the u.s. federal communications commission says more time is needed to review the arguments for the deal presented by t-mobile and sprint. they want to review significant new information. audiences willng respond to a superhero movie where the lead is a woman. captain marvel is expected to

reagan $175 million domestically -- rake in $175 million domestically. it stars brie larson. david: ironic that this comes out on international women's day. that we first marvel had wonder woman -- it's the had wonderl -- we woman. -- everyk at avengers single one had a movie except hawkeye i and black widow -- hawkeye and black widow. $72 trillion of private wealth could be held by women over the next decade or so. you should want to get that if you are a company.

are you going to see it? david: the reviews have not been great. i loved wonder woman and black panther, which was also disney. alix: i'm seeing it. shocker. david: theresa may has been talking in grimsby. may neverhe u.k. leave the european union if the deal is rejected next week. still with us, subadra rajappa and constance hunter. turnout next week? subadra: it's hard to know. there's been ups and downs on brexit. this momentum building for this new referendum move. david: are gilts trading off of it? subadra: not so much. global yields in general seem to be led by what's happening with the ecb recently.

you have seen generally that towardsing seems to be optimistic outcome on brexit. you see that in sterling. people are more inclined to belong sterling in anticipation of some sort of positive outcome on brexit. alix: the rhetoric a year ago goodlobal growth is pretty -- that has changed. actualyou view the economy and sustainable growth in the u.k. regardless of brexit? constance: you can't view the u.k. economy without brexit. people were afraid there might be a hard brexit, that was the most adverse scenario. any brexit will cause a fororary reduction in gdp the u.k. and the countries that

trade the most with the u.k. it's definitely disruptive. now, we are talking about a never exit -- my first gut reaction when the iserendum came in was the eu the hotel california. you can check out any time, but you can never leave. david: when they first put the eu together, the idea was we would be stronger together economically. now, you have brexit going on, germany suffering, italy saying we might not want to be in this party. subadra: absolutely. you left out france. the yellow vests in france. you have the extreme right an extreme left in europe -- and

extreme left in europe. populism is getting stronger it. david: our economy is fundamentally sound and growing despite whatever issues we have here. in europe, they have a strong labor market and increasing wages. yet, they are suffering. why the difference? subadra: different regions have different growth rates. the divisions in germany were quite meaningful. germany is subsidizing the other poor countries. everybody needs to pull in their share of work. you are seeing positive signs on spain, any resolution on italy would be positive. the bifurcation between the core and non-core is leading to all of this growth stagnation.

leading to the issues we've been having recently. alix: subadra rajappa and constance hunter sticking with us. nextll take a look at the economy.rding the u.s. companies with more women as managers have consistently seen lower earnings volatility. i wonder if that has to do with the way women approach risk. -- if weat 202 number keep going, it would take 202 years for women to catch up with men. alix: this is bloomberg. ♪

alix: the dollar trading a bit lower ahead of february's jobs data.

180,000 jobs is the consensus. we have to go to euro-dollar here. does this breakout today? over thebeen overall longer term a bit more bullish on the euro, stable to bearish on the dollar. it's important to take a step back, take a deep breath and say, what are the underlying fundamentals? it's have an overreaction yesterday in the euro. the extreme dovish language out of the european central bank is driving the euro. we should see a backing off from that. really, what he proposed to do was not nearly as dovish as what the words that came out of his mouth and in his statement. you wind the flipside,

up having a potentially strong jobs number, wages continuing to increase. how do we not have more dollar upside? >> it's kind of interesting. to bearishable dollar was predicated on the fact that the fed appears to be done. other central banks were still leaning towards tightening. we've had a pretty significant seachange in australia and canada and just yesterday in europe. it's become a race of the doves. everyone is racing to out-dove everybody else. you can make a case for a stronger dollar. it was consensus late in the year. overall in terms of the central banks after we get through this round of talking about monetary policy, we will realize we are

at a point where all of them are stable and static and taking a step back. it will be a catalyst driven market, driven by real fundamentals in the data. contrasted with europe, one thing mario draghi said yesterday, we have a problem because it's not structural reform in the economy. is that a place where the dollar deserves to be a bit stronger than the euro? they have not taken action to have the fundamental reforms. >> right. that is certainly a piece of the puzzle here. why you have seen so much continuing dollar strength even though the fed has been backing away from interest rate hikes. the big part of the market moves is that the picture the ecb painted about the european economy was very negative, but

the proposals weren't that significant. just delay the potential window for hiking a bit, extend the loan repurchase agreement, but not at terms that were as favorable as they are currently. the rhetoric did not match the action. actionfundamental perspective in europe, we don't see it as quite as bad as they the sentiment would leave you. alix: 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. alix: this is "bloomberg daybreak." it is decidedly risk off as we head into the numbers.

chinese stocks selling off, spreading to the u.s.. euro-dollar having to bounce back. bonds continuing their climb higher as yields move lower. now i will turn to kevin's really who is live at the labor department with the numbers. jobs added in the u.s. economy in february, missing expectations. the unemployment rate declined .2% to 3.8%. meanwhile, average hourly 27 .60 sixse $.11 to $27.66. participation rate held steady at 63.2%. there were revisions. 220,000 revised up from to 227,000. 304,000revised up from

to 311,000. 20,000 jobs added to the u.s. economy in february. gains in jobs added to the health care and holzer trade sectors. employment and construct -- and wholesale trade sectors. employment in construction declined. hospitality,, little changed. heavy and civil engineering construction down. a .2 percentage rate decline in unemployment rate represents furloughed federal employees returning to work from the partial government shutdown. david: kevin, thank you so much. matthiash us are and and constance hunter. i will turn to you first. explain the numbers.

concstance: i said something in an earlier segment that you have to look at the revision and the average for the corner. we are averaging about 180,000 jobs per month if you take january and february together. there was always going to be noise as a result of the shutdown. average --at that $180,000 -- 180,000 jobs, that is where we should be. david: people were concerned they would revise it down, there revised it up. concstance: and they revised december. it is not unreasonable we would have a full back in february given strong months and months growing faster than where we would expect them to be. david: an immediate reaction in the dollar index -- it has

really fallen down, as you might expect. anne: this is a very odd jobs report. i agree completely with constance. you have to look at it over a couple of months. i think that is a normal reaction for the dollar to do that. this is such a catalyst driven market. bit -- to think a little the unemployment rate falling is important. continuing strength in the job market. the odd 20,000 number, which is low, it is a jobs report the fed should feel good about. seems to me more of a full employment conversation. you end up hiring less people but those in the market are getting paid more.

where is the bounce in yields? where is the support level on his immediate reaction to the downside? subadra: not seeing that much of a reality -- what sticks out is wages are starting to tick up. 3.4% year-over-year. this has been growing for the last several months. will have to you start being concerned about wage pressures and wage inflation. we are not there yet, but that is something that stands out in this report. alix: the underemployment rate also felt quite a bit to 7.3% from 8.1%. is this going to be the story of the three-month average? constance: yes. i want to also point out the housing number. labor market is a concurrent indicator. housing is a leading indicator. 2018 anded throughout

we now have a back at 1.2 million. that is a good situation for housing. you have to juxtapose these numbers together. rates went up over the course of 2018, then in the fall the starting to come back down. you're seeing that reflected in the housing market. david: up almost 19%. alix: pretty solid. give us your take. you told us about the dollar. you also covered rates. anne: i think the steepener is the trade to sure -- the trade du jure that makes the most sense. i think it is important to think about the nuance of what the fed is telling us. it is saying we will encourage a little bit higher inflation. we will encourage things in the

economy that will let it run hot to raise longer-term inflation expectations. inflationstandpoint, protected instruments is an interesting place to be as we find the steepener attractive because in and in positive inflation starting to pick up environment, you should have longer-term yields selling up and the curves steepening from the long end. if things go bad, the fed has told us they will not over tighten. they will do everything they can to avoid a mistake. that is why it is such a popular trade and i do not see anything that would make me change my mind. subadra: what is interesting in the bond market is the divergence between the real yields and inflation expectation . expectation starting to take up but real yields starting to decline in the u.s.. , but that is slow growth

somewhat inflationary environment getting priced into the bond market. probably what the fed wants. they want inflation to run hotter than the market expecting. there is a lot of talk about inflation averaging as a part of their mandate. i think that is something they are focused on is keeping inflation expectations high, especially they have to bring rates back to the zero mark. they do not want inflation expectations to decline. in the credit markets, in our active credit funds, it is not a grab everything rally. it is a more discerning rally. we see credit is fairly valued at this point. there is still a lot of room to run. that is what the fed has told us. they will not put the brakes on this economy.

as credit investors, we are becoming more discerning across the board. higher-quality credit outperformed. we are starting to leave the turmoil of the end of the year in the rearview mirror. constance, on: the inflation subject, is there anything in this that would give the fed pause about their position? the soft jobs numbers would. constance: i think the others have touched on this. they are willing to let there be higher inflation. the terminology they use is symmetry. that is different than the ecb. if you listen to mario draghi, their target is at or below 2%. 2%,fed says our target is symmetry.is alix: i want to bring in something that is cool. spacex dragon is coming into

our. a shot of the dragon from a plane they have. we are waiting for it to come into the atlantic ocean as it comes down to the atmosphere. the altitude is 46 kilometers. you can see the extreme heat. that is what the light is. alix: pretty amazing. it should be touching down about 15 minutes? if it can do it safely, this is a huge step for being able to transport people into space. david: remember, boeing is not far behind. it has its own space capsule be putting up soon. as far asay, deciphering what 20,000 jobs being at it means when you have an unemployment rate that fell as well as wage gains, i'm going to go out and say something else. risk you run the

to hot. we are talking about average inflation. if we're going to have something symmetric, when we run hot? anne: i think the fed is hoping we will run hot. i've been -- i do not know it's done is the right word -- i have stunned by how -- they are and pushing the idea of average inflation of 2%. since inflation expectations have been below 2% for quite some time and running below 2%, that means they want to run above 2% for a long time to get the average back to 2%. what they are communicating is inflation is ok. i do not think them as we see several quarters of inflation above 2% or 2.5% even, we will start to see concern on the part of the fed.

they are confident in their inflation fighting capability. they're more worried about their inflation encouraging capability and worried about getting into situation where we become like japan. alix: constance, you were nodding? constance: the national association for business economics heather policy conference. bill bostick was there from the atlanta fed. one of the things they are talking about is raising the inflation target. i the privilege of interviewing alan greenspan. he was saying that if you look at what we are spending on the fiscal side, it would be perfectly reasonable to inspect inflation. fed has beenthe trying to communicate. the markets are -- the market should spec -- should expect higher inflation. alix: we are looking at the parachute that just employed from the dragon.

this is parachuting down to the atlantic ocean. is down to the altitude of commercial airliners. white-hot with the first parachute. i believe more parachutes will be coming. alix: this is a shot from the plane that has a camera. amazing. david: and there's a ship waiting for it. to pick it up out of the atlantic ocean. the dragon has been extremely successful since its launch last saturday. if the reentry can be completely safe, this is truly a breakthrough in human transport into space. here we go. full deployment. david: full deployment of the shoots. you can hear the applause. i think that is houston we are listening to. pretty dramatic.

those parachutes are amazing. alix: 15 years since we've had this kind of capsule. david: are measuring -- i remember as a boy watching apollo gemini and things like that. one of the gemini capsules, something went wrong with the hatch and it filled with water. the astronaut got out. alix: pretty spectacular. david: beautiful. the question is are we going to have this more routinely? the big issue is united states versus russia. for some time we've not been able to launch any people into space from u.s. soil. we've been using russian launch vehicles. saved a couple seats on the next shuttle from russia because they were not

sure this was going to work out. whenis a critical moment it reenters and lance the atlantic ocean. lands in the atlantic ocean. david: i want to bring in our colleague from bloomberg. dramatic shots. it looks flawless. you have information about how successful this has been? matthew: it does look pretty clean, doesn't it? that kind of parachute deployment was the last big issue. from here, getting it into the sea and putting it up should be routine. what we critical is the analytics and data they get from the human dummy that has been the passenger, which they called ripley after the lead character series.alien" film if the information they get from the dummy checks out they will be able to go ahead with the , the abort test in

june and the second mission with real astronauts in july. david: about to touch down in the atlantic ocean off the coast of florida. incredible.s atmosphere, four parachutes to ploy. looking at a camera from earth. matthew, where is boeing in the race? matthew: they are a month or so behind. their plan is to run a similar mission to what we have seen with spacex and then perhaps in may they would do their own abort test. alix: touchdown. >> the dragon has returned to planet earth.

crafts from the vessel going to collect the parachutes. alix: on time and on schedule. that was impressive. it seems like at least we know -- it feels like a very successful seven days for the dragon. much on thisou so historic day for spacecraft. the dragon lance successfully in the atlantic ocean -- the dragon lands successfully in the atlantic ocean. to recap what is happening in the markets, the reaction to the u.s. economy only adding 20,000 jobs last month. you did see wages increase, you saw the unemployment rate come down as well as the underemployed rate. , what is to our panel

going to be leading the bond market? is it going to be the data out of the u.s. or is it going to be something else? subadra: i think it will be global growth and the global environment. you're going to see yields one fundamental start to improve but you'll need to see consistent change in the global growth outlook for yields to rise meaningfully. probably range bound between 250 and 280. i do not see any reason we should rally beyond 2.50 but i think the global growth picture -- david: i'm always curious about productivity and the relationship between higher wages and productivity. we are seeing wages move up. those exceeded expectations. are we getting to a level where we will drive more capital investment because ceos want machines rather than people? constance: if labor becomes more

expensive, then the relative cost of deploying capital becomes cheaper and you see that mix between labor and capital shift. we have already seen it as the expansion has continued. it is reasonable to expect that to carry on. the only thing that would hold that fact is global growth expectations and any disruption in the financing and capital markets. alix: it feels like central banks -- we lost anne. it feels like central banks are along the phillips curve. does this give you a feeling that might be a good bet? constance: i would never want to comment on just one number, but the trend we have seen over the last several years is we are seeing higher wages. there is a somewhat flatter but existing phillips curve. alix: what is going to be the rest and was the upside potential if we get a china

trade deal? are we prepared for that kind of upset in the economy? subadra: i think a lot of it is already baked in. i do not know how much more upset there is. it feels to me as a bond investor that the rally in risky assets, whether it be equity or credit has run its course. ne pointed out, they are cautious where they want to invest in credit. we've seen a move lower in yields. a decent rally in equity and credit spreads. if we do get a trade deal out of china, i do not know if that will translate to higher yields were positive risky assets. we talk about the trade deal is always china. there is also europe.

how much pressure to the projections from the ecb put on the eu to come to terms with donald trump on trade? there is absolutely the prospect of auto tariffs is significant and it would be damaging. i think there is going to be pressure to resolve that without having tariffs. constance hunter and subadra, thank you both very much. markets reacting to the jobs numbers. the three-month average, still on target. wage growth at 3.4%, the highest of this expansion. combating negative data out of europe. german factory orders fell in january. combating the chinese market as well as the bad import and export data. the u.s. continues on its own in terms of the better growth. the dollar dropping. a little bit of buy-in on bonds

and long run but stocks moving to their lows. we will break out the job numbers even more in the market reaction, next. this is bloomberg. ♪

alix: i am watching the market reaction to the jobs number as well as the jobs number itself and the rhetoric we will hear of the next yours. let's get to emma chandra. emma: this was a big surprise when it came to the jobs report. hiring at the weakest in more than a year. wage gains the fastest of the expansion and the unemployment rate fell. the market team in the u.s. describing it as if salvador dali had been a market technician and come up with this data. immediately we. futures fall, the dollar fall, 10 year treasuries rallying.

this may be reflecting there is not a consistent message. in terms of the stock reaction, we saw the banks fall, we are seeing a number in the red premarket. that is concern on the news it would be more unlikely rates were to go any higher. some of the biggest forces like boeing, caterpillar and john deere are down given the week data out of china. sayingrg's reporter rarely will you find a stronger example of do not trade the headlines. alix: a fair point. do not trade the headlines. david: how many days in a row to we have that information? yesterday we were surprised by the ecb moving more quickly than we thought they would on liberalization, at the same time china numbers came out overnight. it seems like every few hours. alix: the negative reaction does seem to be sticking despite the

fact that you can make an argument the report was looking at a tighter economy in terms of jobs, which is a good thing in theory. the negative reaction, is a commentary on the ecb, is at the china numbers, that may be feeding into the market more. david: we have kevin cirilli in washington. what sticks out to you? kevin: the 20,000 jobs being added fueled by the decline of the construction numbers and that 31,000 decline is the construction industry. ,hen you dig deeper specifically heavy construction and heavy construction projects relying on civil engineering, the more high end type of construction, that declined by 13,000. when you look at the average hourly earnings rising to $27.66 year-over-year, that is the 2009.t since april of the bottom line, the labor

participation rate holding steady at 63.2% but only 20,000 jobs added to the us economy in february. david: thanks a much to kevin cirilli. back to 2009, people were getting laid off. alix: true. a lot of conflicting signals. you know the overall market will be trying to digest that as well as the weekend trade data. coming up on bloomberg markets with jonathan ferro, larry kudlow will be reacting to the job report. president trump already tweeting that the economy is very strong. this is bloomberg. ♪

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

struggling for stability. u.s. payroll delivering a freak disappointment. chinese exports plunge, fueling worries about global demand and the latest central bank you turn stipulating concerns. live from new york city, let's get to the price action. good morning. futures session lows. we are off by .8% on the session. in the face of that freak data point, treasuries well behaved. yields 2.63 on the 10 year. 1.1227.arket, let's begin with the payrolls report. joining us is kevin cirilli to work our way through each and every data point. kevin? kevin: 20,000 jobs adding to the market in