stronger than raising hopes that the world's second-largest economy may be stabilizing. coming up of a strong first quarter, markets look for any indication of what is to come as some big players take expectations down. and einstein said it was the definition of insanity. parliament votes fora fourth time on theresa may's brexit plan -- votes for a fourth time on theresa may's frexit plan. -- brexit plan. welcome to "bloomberg daybreak." that you are quoting albert einstein on insanity. it is april fools' day. david: i learned that that was the day they sounded apple. lisa: they did because they were such pranksters. steve wozniak and steve jobs were both in their 20's. in the third partner

pulled out because he worried about the debt they were going to incur. lisa: meanwhile, we definitely have a risk on feel across markets. anufacturing data giving positive trend to the board. the dax at one point having its best one-day gain in more than a month on china's economy gaining steen, giving some fuel to the -- gaining steam, giving some fuel to the german economy. the yen is the haven choice these days, and the dollar perhaps a bit of a risk on feel. david: time now for the morning brief. we start off the second quarter today with critical retail sales eastern.t 8:30 the trade forecast report for 2019 and 2020. on wednesday, china's vice premier will resume trade negotiations in washington,

reportedly closing annoyed possible deal -- closing in on a possible deal. and nato turns 70. finally, friday is jobs day in the united states. now it is time for the bluebird first take. we are joined by christine harper, "bloomberg markets magazine" executive editor. we will start with positive pmi's. overnight, that seems to be what the markets were reacting to. >> really we are in a world now where the u.s. and china control everything, and our new issue of "markets magazine" this week is the debt issue. would look at how china, since the financial crisis, has taken on the role of stimulating the economy. obviously the fed decision to become more dovish has been positive in trying to reduce economic headwinds, but really we've seen china playing this lead role. that is an interesting factor

when you look at trade negotiations. you don't want to slow down china too much. lisa: that is where i was going to go, marty. how much can china sustain this kind of momentum without some sort of resolution on the trade front? >> i think both parties from the u.s. and china want to get to a deal. donald trump has said he doesn't want just any deal. he wants a great deal. the question is how do you define that. it is interesting that the markets are totally ignoring a weak sisteris in the global economy. lisa: we are going to be talking about it. don't worry. disappointing german manufacturing data, and yet german assets totally rallying. look, the dax in germany really a notable

which brings us to what we are hearing from an increasing number of economists. global growth and the outlook, woman saks and morgan stanley both downgrading expectations for year-end yield -- goldman sachs and morgan stanley both downgrading expectations for year-end yields to 2.8% from 3% and 2.25% from 2.4%. how do we square this idea that china is gaining steam and people are getting more bearish on global growth and u.s. yield? christine: that is a good question. [laughter] christine: i can't answer that, but for the markets in some ways, whenever global growth forecasts go down, people get more hopeful of stimulus puzzles these -- stimulus

policies from central banks. answer why they are cutting growth. david: is the u.s. administration helping or point? at this you've got donald trump saying you've got to cut the rates, larry kudlow saying you've got to cut the rates. marty: i think it is actually helping in a certain respect. the market is actually catching up to him. he is saying cut rates 50 basis points now, and the market seems to be catching up to that idea. they are now pricing in a rate cut before there's any increase this year. lisa: but doesn't to question the independence of the federal reserve? if you've got president trump saying it is not a cuff -- it is aused.ough you p

christine: to the extent the market will try to realize that outcome, they will. it is an interesting thing. you've got china, which has been concerned about growing leverage in that economy and trying in fits and starts to reduce it, and then re-stimulating every time growth starts slowing there. you are seeing something similar with the central bank's policies. david: which is the cart and which is the horse? to what extent is the market fedng the president and the is going to drive the data? arey: the fed can say they completely data dependent and independent of any outside pressure, but it is not like they have your plugs in their ears -- they have earplugs in their ears. they have that subconsciously in their minds when they deliberate. lisa: do you think chairman powell looks at president trump's putter feed? -- twitter

feed? marty: i would suspect other people do and let him know what is in it. david: let's get back to brexit. they are going to have some more votes today. here are at least three alternatives, although i am told there are eight alternatives at this point. at what point can we really say theresa may's strategy of waiting to the last second to force an agreement has failed? it doesn't seem like parliament is saying we've got to come together. it is rapidly coming to that point. the real question is whether there is going to be a snap election to try to sort out this mess. the concern is that the election will be inconclusive like everything else happening in the u.k. it raises the prospect of a hard i don'tnd a crash that think anybody is pricing in. lisa: one question i have is, as

this drags on and we get vote number 4622, what is the effect on the financial sector? that has been one of the biggest question marks going forward. how much have big financial banks already taken jobs out of the u.k. in response? even as close as we are getting to a hard brexit, they are not doing that. it plays into the argument that maybe a hard brexit wouldn't be as bad as people fear because predictions weren't what people said they would be. stocks are not doing great, but they are not crashing. i guess we will see. markets don't seem to be panicking at this point, which is interesting. what point doat we do real damage to democracy in great britain?

this has been such a long-standing parliament tree democracy, a bastion around the world, and now it looks like it is a joke. marty: it is almost comical, but there is a real threat to the democratic process in the u.k., and that is spilling over into the rest of europe. if this turns out to be a crash out of the eu. lisa: did you see the banksy picture heat weeded out of onkeys running parliament -- picture he tweeted out of monkeys running parliament? there you go. thank you. we appreciate your insights. you can find all the charts we used and more at g tv . pmi's.up, a tale of two sendgermany manufacturing investors fleeing to safe havens? we will discuss with david owen

jeffries, chief european economist, and federated manager.' portfolio this is bloomberg. ♪

viviana: this is "bloomberg daybreak." a takeover will create a in a deal worth $4.6 billion. that price represents a 43% premium from january 15. raised in a middle eastern payment processor are up to $3 billion. shares will be listed in london.

50%.'s biggest bank owns producer's largest oil is preparing for its debut dollar bond offering. bloomberg has learned today saudi aramco will begin its roadshow. raise about $10 billion. proceeds will be used to help buy a majority stake in a saudi corporation. lisa: thank you. european stocks and u.s. equity futures are higher after china's latest manufacturing data at eased concerns about the pace of the global slowdown. meanwhile, german manufacturing has investors fleeing to safe havens. joining us now, our own mike mckee. michael: good morning. we have some data for a data dependent world.

we've been looking at a slowdown globally. central banks say it is temporary. the markets seem to be pricing a recession, so these are a leading indicator about where we are going. pmi's, purchasing managers index is. the idea is simple's. you ask -- the idea is simple. companies ifu ask business is better or worse. pmi's are a pretty good leading indicator of where we are going. you can see a slowdown in some of those. we should get numbers later today from the u.s. that will help us update that come about the news this morning relatively mixed on where we are going. as you mentioned, things are better in china. sincehas been slowing 2017. its manufacturing numbers going below the 50% line that suggests any kind of contraction or expansion. today a dramatic turnaround in both of their numbers. they have both a private number

and a government produced pmi, both over 50%. china expending again after all kinds of stimulus. as you mentioned, the numbers and europe are not good. that is still a worry for people because germany, which is the blue line here, a significant drop over the last month to the lowest since the euro prices six year ago. , italy was also lower, and that led the white line, the european composite, lower. the question is does china become the chicken or the egg. if china is improving in the euro is its biggest trading partner, does that mean a turnaround in europe? in the u.s. purchasing managers index out at 10:00 this morning. we will see what the world's largest economy is doing, and that should give some

direction going forward. david: furthermore we welcome david owen, jeffries' chief european economist, and steve chiavarone, federated investors portfolio manager. if you had to pick between good pmi numbers out of china and disappointing numbers out of germany, which would you rather have? >> china, without a doubt. the interesting thing about german pmi's within the narrative, you've got brexit concerns writ large. brexit is a very hot topic of discussion amongst german investors. obviously the concern here is that brexit uncertainty is impacting germany. you can't make that case with other countries around the system. quite literally the -- quite clearly the numbers were wea

k. pmi running into a crucial period of the relationship with the eu. at the moment i would rather have china picking up and would focus more on that. lisa: it seems like brexit is weighing on some of these numbers, but steve, i am struck by the fact that everyone has been saying the german economy is highly leveraged to china's economy. here we have a real rebound in the china pmi's and still have we this persistent and deepening in the german economy in manufacturing. how to use per these -- how do you spur these? steve: stimulus. hopefully this morning's numbers are the first signs of starting to filter through the economy. in terms of europe, you just had the about-face by the ecb

recently. what is going on is not that growth is slowing. that has been the story since september. but now the inflection point is that growth bottoming and starting to move higher. it makes sense and economy at a cyclical and has stimulated as much as china would be the ones to rebound, and you hope that pulls you back into a more stable position. that is our view. lisa: so you are betting on europe right now. steve: we are betting that global growth is going to surprise to the upside between now and the end of the year. david: david, when we talk about growth, growth in what? it is one thing to talk about goods. there's a lot of services embedded in some of the trade, but also services we are not paying enough attention to. right.that's absolutely narrative is

always that germany is an export machine, but it exports services as well. you've got the real estate market. all of these things have been recovering. the labor market is tight and wages have picked up. it must be very clear that the ares for manufacturing overflowing the slowdown. those things look encouraging. wondering ifi am you think growth scare's have bottomed out here were reached their peak. what assets are you buying in europe? steve: europe is at the lower end of our list. if we were to put a hierarchy of things to buy, in the u.s. we

want cyclicals that really got hammered last fourth quarter. small caps. lisa: we are going to get there. in europe, any opportunities or none? [laughter] really want to bottom feed in europe. around want to nibble banks or luxury goods companies with exposure to china. if you can get those kinds of name exposures without exposure in the u.k., all the better. lisa: both of you are staying with us. i do want to give you some breaking news currently. there are a number of airlines, southwest and delta, that are having system issues affecting flight schedules. both said it is unclear with the estimated time is of when they will be fixed. southwest and delta both tweeted this out. david: it is also unclear from

bloomberg headlines with the system failure is. is this air traffic control, their computer system? something is affecting a lot of airlines now. which is concerning for a variety of reasons, but especially considering the fact that it is coming from a number of different airlines. you have to wonder, is it nefarious? david: we will keep following this and report as we get information. coming up, turkey's president erdogan suffered a rare election setback over the weekend. what does it mean for the turkish economy? this is bloomberg. ♪

david:david: turkey held local elections yesterday, and although his ruling party prepared overall, president erdogan suffered some rare setbacks as opposition parties. posed -- opposition parties appear poised to take the

capital and ankara. what isaac i just said was wrong -- what i said i think was wrong. guest: at the moment it is unclear, but the latest is the opposition has been shown leading numbers against the other at this stage. david: how much of this was simply because of the turkish economy and what is going on with the lira? guest: i think that's got a big part to do with it. economic-wise, it's been a bit the economic throwdown and all agility -- economic slowdown, and volatility. lisa: how do you bet on turkey? we are seeing the lira now gaining as things become clearer

or perhaps more murky. guest: it is a very difficult .arket it is a bit tricky to put any investment position on. i would say the take i have is still to watch what is going to come now on the economic program expected monday of next week. david: you deal with emerging market investment more generally. is this idiosyncratic in turkey, or is there a danger of contagion? david: i think there is more danger of contagion in the sense that last week the euro was very difficult to get access to from investment point of view, so investors who have turkish

exposer were forced to look for otherltnatives and more liquid instruments, for example, mexican peso. i think there has been some contagion channel. lisa: thank you so much for being with us and for that update. coming up, parliament takes control again. u.k. lawmakers meet again today with hopes of angry and -- of agreeing on an alternative to premised are theresa may's -- two prime minister theresa may's plan. from new york, this is bloomberg. ♪

♪ lisa: a risk on feel across the board for all the major indices in the u.s. let's get across asset check.

10 year yields in germany actually rising the most on a basis point level since early this year. an indication that perhaps people are excited about growth, despite weak manufacturing data. the euro gaining against the dollar again. crude continuing to gain after the best march gain for oil since 2009. it is now at its highest level since november. let's see when president trump is going to try to tweak to put that back. [laughter] david: there is news going on outside the business world. viviana hurtado is here with first word news. viviana: today, systemwide outages at four u.s. airlines are causing flight disruptions. andhwest, delta, united, american are affected. furtherot give any details. delta says it does not know when the problem will be fixed.

china is making some goodwill jesters before trade talks with the u.s. resume this week. beijing is extending a suspension of tariffs imposed. president trump is repeating his threat to close the border with mexico. he says the u.s. detention areas are "maxed out, and we will take illegals." the state department moved to cut aid to central america at president trump's request. many are escaping gang violence. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm viviana hurtado. this is bloomberg. david: thanks so much.

the british parliament is back at it today with a series of folks scheduled in its continuous effort to find some sort of consensus on how it will leave the european union. we welcome bloomberg brexit reporter jess shankleman. are they narrowing the -- thences jess differences? the option they hope they will see tonight, any sort of majority so that there's a soft brexit. they will be hoping tonight they might narrow that down even more and maybe even get a majority lisa: you've been covering this for a long time. is this just a big mess? are we moving closer to some revolution, or is this just another grain of sand? jess: it certainly seems like a big mess from afar, and feels like a big mess here.

i think we are moving closer to some kind of decision, but nobody knows really what that might be. it could be a general election, some people calling for a referendum. theresa may said she would step down if she got her deal, and this week we are seeing people vying to replace her. jeremy corbyn is looking for a different general election. let's just assume that the customs union actually did prevail. for a customs union, with that require extended delay to this deadline, which is now april 12, in order to negotiate with the eu? that's right, but what theresa may's government is they would use that to try to get hard brexiteers to

vote for her deal and a fourth vote potentially this week. david: you've got to give it to her for being steadfast. thank you so much for reporting, jess. lisa: again, i go back to your i'm kind -- your einstein quote on insanity. [laughter] , davidtill with uslisa: iavarone.steve ch how much damage has already been done? david o: that's very difficult to say. what we do so is business of the u.k. has been incredibly weak over so. we also know four development flows are already moving. likewise, we are seeing fti bl ows out of the u.k. in the

service sector. what we are not seeing as many fracturing removing, but arecally service providers shifting. when it comes to the services, it is the mavs what is key, the customs union which eventually sectordoes not cover the . ultimately you will have to move some of your production actually . the damage to some degree is happening. you're building up entrant tories -- building up inventories as well. your pointo back to about foreign direct investment, as i understand it the u.k. needs a lot of for a direct and advancement- direct -- as i understand it the u.k.

needs a lot of foreign direct investment. after theediately brexit vote itself in 2016, there was a lot of interest in the commercial real estate market in u.s. economy, as is it is obviously cheaper in u.s. terms. but in terms of financially in the current account deficit, which widened again in the fourth quarter of last year, a sees massive inflows into u.k. debt securities. you had investors selling german and reinvesting into high-yield u.k. gold market. what we've been warning people foreign direct investment

flows are already beginning to move. ,isa: that's really interesting the idea that foreign investors are playing in u.k. because the pressure from the ecb isn't necessarily good to be there. from your perspective, steve, are you one of those investors flooding into u.k. bonds. steve: no. [laughter] lisa: or any u.k. assets? interesting is you haven't seen major disruption to the u.k. equity market despite chaos. if you knew that brexit was going to happen, you'd have been inclined to go short for about 30 minutes. i think it gave investors a sense of humility around these kinds of events, which even when they are normal, where possible .-

it will be interesting to see if this is the calm before the storm if something goes awry. lisa: david was talking about how the ecb might not be quite as a connotative -- as accommodative. but it seems like the federal .eserve is , based on of the year how dovish the fed has been, how risky is it? steve: number one, there was no reason to continue to hike because there's no inflationary pressures. but can you imagine the ?onversation there's no other central bank in the world that has any bullets left at all. the u.s. is the only supplier of real stimulus at this point. for us to have paused make a lot

of sense because you don't want to push this too far in terms of these international economies. you also have a scenario where slowing, but there's no indication of a recession. extent- david: to what does this first quarter in the just not as bad as the others are? o: that always reflected in valuations that -- valuations of asset prices. i colleagues in the u.s. will try. need to the fed will pit it and i thing the ecb will change policy and the second half of this year. onehat point we could see

point or another what is happening with brexit. lisa: you think that the market is wrong and the federal reserve is going to pendant back to possibly raising rates again? is that what i'm understanding? david o: absolutely. lisa: if that is the case, how disruptive will that be to markets right now? quiteo: it could be disruptive. hadhe end of last week, we back and forth from that meeting. we got a huge change in structure at the ecb. we knew inflation would print lou are -- would print lower.

it is now going to pick back up in april. the ecb may not be as accommodative in the second have of this year. david: we've been a negative interest rates there for some time. at what point does that cause sustainable damage because they they ared by it to -- hurting basic structure? --id: they need to do's david o: they need to do something with negative rates. if they think they need more stimulus come june, they will take it further. there's going to be another tltro affected in september. it is really not known, and it will wait until june to decide what to do. o.e, if david is right. right andd o. is

becomes more hawkish, how much would you have to trade on that? we think second get highlights this year, but our view right now is who in from global synchronized tightening to global synchronized easing, to a re-acceleration. in terms of the fed, i think you would have a real credibility over the course of a couple of months. seeingk we started definitely the last one in 2019. david owen of jeffries varone of federated investors, thank you. king.aramco is the

we will take a look, next. this is bloomberg. ♪

♪ viviana: coming up in the next hour, allegiant's ceo. ♪ viviana: this is "bloomberg daybreak," i'm viviana hurtado with your bloomberg business flash. names, psa group and fiat chrysler, or exploring a christly to build a super d fiatrm, the basic -- an

priceer, are exploring a merger to build a super platform. a wine collection of almost 17,000 bottles from a mystery owner sold for almost $30 million at auction the collection includes a number of rare burgundy's and first growth bordeaux. the buyer is still a mystery. that is your first report business flash. lisa: we turn now to wall street -- david: we turn now to wall street. first up, wall street gets pushed out of bond. bond investors cutting back the -- then -- the madma

middleman. saudi aramco has offered a glimpse into its financial performance, including that -- including net income. and march madness set to attract -- $1.6 million for tbs. lisa: a story generating a lot of attention among our customers, mike mckee, bloomberg editor and policy at are, this is going into how trading platforms are seeing a surge in all trading among corporate bonds. in other words, investor a going to investorb, how much does this change the scenario for wall street? talked: it has been about for years and years because we fed electronic

trading in equities forever, and the same thing for about 10 or 15 years for currencies. where has the bond market been? the problem is much of the bond market is so segmented from somebody different companies when we are talking about corporate's that it has been hard together some sort of electronic platform that could deal with it all, and now we are starting to get there and see people adopt it. it is still about 25% of the market come of it seems to be the way we are going. david: is it inevitable? is this just a matter of time. we are talking about different distribution of treasuries. treasuries are relatively easy compared to the corporate , but with daily markets you get the volume. it is a do everything on your phone world. do you still want to pick up the trader?d call a some people do, and that is what wall street's argument is. we don't know exactly what the

prices are. maybe people need handholding and advice for this. lisa: it is a question of information. just to put some number two it, up from 3%, sod a big jump. people saying i think we have enough information. banks hold less inventory and bonds, so makes it iconic for the. we've been waiting for a deal on equities, but now we have debt coming out. we have a rating and we are getting a peek inside to see what aramco is really about. steve: they are about making a lot of money. i don't think anyone is surprised. they made $111 billion last year.

made 82ast, apple billion dollars. so they are significantly larger. isa: the interesting thing to me that even with this huge revenue, it does indicate it is waysy profitable in the somewhat expect. couldn't saudi arabia just come out and say we need more, especially with prices so down? steve: that is the whole question of this ipo. saudi remco exists because it is an oil spigot. they are trying to diversify to get away from oil. the fact that they tax so heavily, that is what you would expect. so if they become a public company and their fiduciary

responsibility changes, then who gets the money? if they need more within the country. , if prices go down, for example, what do they do? david: pretty complicated, as is march madness. [laughter] david: what we are going to talk about is the amount of money involved in this. lisa: of course. everyone is watching the basketball game and we are thinking about the money behind it. initial indicating's are that ratings are up, but the number of dollars advertisers put into this are extraordinary. streaming ads have been going up a lot. anchor: it is a huge business, and we seen it a lot over the -- seen a lot over the years. more people watching in more different places, and the appetites they bring in will bring more people over the

long-term. one of the things you have to is who's with the way winning. i am wondering if michigan state didn't bring down the ratings a little bit because if you look it, everybody hate duke, and i don't know why. david: the thing that drove it more than anything else with the number of alums. michael: this is true. [laughter] david: we are down to four teams. going to have the finals next weekend to give us our winning brackets for a cause. that is the graphic right there all the people who contributed. lisa: i like how you tried to explain it and then were thinking and were like, no. was this this year or

last year? lisa: we'll find out. david: thanks so much to bloomberg's michael mckee. a possibility of collaborating on a super platform. more next in this is bloomberg. ♪

david: psa and fiat chrysler. there was a bloomberg exclusive they are talking about a possible tie up. psa is the president of peugeot. ha went up because they invested in the past platform. lisa: you see increasing speculation about consolidation

in the out of factor. when not clear where and the prospect will pay off. i compare the two companies and they are remarkably similar in their size. interesting, especially in line was too nissan guy over on the corner. david: coming up here, and joinias and lisa erickson us to discuss global growth, yields, and what investors can expect as we had in the second quarter. live from new york, this is bloomberg. ♪

♪ david: china to the rescue.

chinese pmi's come in stronger than expected, raising hopes for the world's second-largest economy may be stabilized. coming off of a strong first quarter, markets look for indie vacations of what's to come as some big players take expectations down. and maybe it will come out to a different win this time. europe expresses increasing frustration, and that is lying. welcome to "bloomberg daybreak. i am here with lisa abramowicz. alix steel was off today. this is not an april's joke. lisa: i'm glad i am not at an airport right now. multiple u.s. airlines having system problems, including southwest, delta, united, and alaska. there's a systemwide outage that has led customers across the city in u.s. to complain about what disruptions. united says the outage was affecting its ability to share data work. whyust raises a question

multiple u.s. airlines either are on the same system, experiencing the same issues. it is just a question about the vulnerability of the air traffic control system. david: but at the same time, we are talking about a need to consolidate. need tone hand, you cough. on the high-end, it makes more vulnerable. indicatedaq teachers up about a percent ahead of the open, leading the other major indices. the dax at one point having its best one-day gain in more than a month. dollar gaining versus the yen. people getting some confidence from chinese manufacturing data. now.: it is time for the morning brief we start off the second quarter today with critical retail sales numbers at 8:30 eastern time.

the wto releases its report for 2019 and 2020. wednesday, chinese negotiations begin again. gather inders washington thursday for an event, and friday is jobs day in the united states. asa: meanwhile, we did have slew of economic data out from asia last night. europe this morning kind of diverging. taylor: it is all about those pmi's trying to outperform while european pmi's are going down, the lowest since 2013. it is that data providing a .roup risks to all of the data

china data in particular will really provide some stability to some of the risk assets we are seeing globally. this is also providing some stability in the u.s. the 200 day moving average really providing some support , really approaching the targetsor year-end in the industry. another thing we will look at in the second quarter. we are taking a look at the volatility index relative to the vix. even though interest rate volatility is moving higher, act with great volatility is not. some are saying that although this means dovish central bank it needsdoes not mean

to happen forward. david: for more on where we are on global growth and what the second quarter may hold in store, welcome in anne matthias and lisa erickson. anne, you really focus on rates. how much of the global growth from thepe for coming low rates we have now in the fed and ecb? >> it is such an interesting moment right now because the central banks have really almost en masse steps back from the line and gone to a dovish stature. they've all said they are not going to raise rates in the village are -- in the potential future. growth ando foster create a little bit more inflation. that is a completely new message

for market participants to afford. i think we are all totally get to be focused on the data coming .p in the first quarter lisa: from an investor's perspective, have you recommended clients change any of their positioning based on the about-face we saw from the federal reserve in the dovish tone we've heard with central banks globally? this reversal earlier in the year, but we continue to advise our clients to stand pat on allocations, meaning that whatever their strategic allocations were, that we recommend those just stay in place at those same targets. even though that central bank positing message was a boost for , on the inside you

have some positive focus going have concerns, chief of which is the number of geopolitical risk out there. we are really at a fulcrum point with economic beta. -- economic data. we have seen a little bit of plateauing, but it is really going to be key on what is going forward. bottom-up and top-down data, we think it is best to staff that neutral position. david: are we seeing a fundamental tectonic shift here? after the great financial crisis, we had central banks saying we've got to save the world, which is an extreme your situation. now we think we are past that, and yet we have central banks, but even trying to lead the markets. >> this is very unusual. since the era of coordinated global central bank activity, we haven't been in a situation where what central banks are

trying to do his foster economic growth and inflation. i would just echo what lisa said , this is the time to be an active investor, but not reactive investor. it is easy to get the wrong message, to overreact to one side or the other, but it is very unusual. i think it is probably a combination of technological and demographic factors catching up with the markets and exerting deflationary influence over the markets. it is something very new for the fed and the other global develop market central banks. lisa: perhaps investors are to be in particularly reactive. certainly wall street journalists are reacting. stanleyorgan and goldman sachs both downgrading year-end yield expectations.

goldman sachs having a higher year-end projection. anne, do you agree with this assessment? are these ballpark figures for 10 year treasury yield? it is a tough one because 10 year treasury yields are telling us a lot about what is going to happen in the future. willuture economic growth transpire. it is sort of a negative out up in terms of where you think things are going in the economy from our perspective we are not yet he to call -- we are not ready to call it. i think to look at the 10 year treasury forecast of some of these other companies, what you tell us about the growth outlook. david: i'm curious about what

you said, that it is not a time to shift between bonds and stocks. given what's going on within the last month or so, is there any -- ao a. invest in bonds way to not invest in bombs. we are in a bullish market on blondes. -- on bonds. >> we think it is good to maintain that balance on bonds. even though we are relatively more on the optimistic side with respect to u.s. and global growth, there are a number of counterbalances that make us a little bit more cautious, maybe not just jumping into the water offset.ree is ourly what we see base case is four continued slow

growth going forward we look at our proprietary dashboard of indicators. 50% are really positive growth trend, but we do keep some eyes on that. david: thank you. coming up, parliament takes control again. u.k. lawmakers meet today with hopes of agreeing on alternatives to may brexit plan alternatives on a brexit plan. this is bloomberg. ♪

♪ viviana: this is "bloomberg daybreak." a takeover will create a european powerhouse in logistics and freight forwarding. a swiss rivalbuy

for $4.3 billion. at five u.s.tages airlines today are causing flight disruptions. american, southwest, delta, united, and alaska have been affected. southwest and delta safety problem is being resolved. today's shares of european discount airline following after being conned at the end of its outlook for the second half in a year. easyjet is seeing increasing softness in prices across europe , weighing macroeconomic uncertainty and unanswered questions about brexit. that is your bloomberg business flash. david: thanks so much. the british parliament gives it another go today with a series of votes scheduled in an effort to find some sort of consensus about how it will leave the european union.

teresa rafael's bloomberg's opinion editor. if explained to me what is different today from what happened last week because they voted on the same proposals last week. what has changed over the weekend? reporter: the main thing that has changed is we are counting down towards april 12, the new cliff edge for a no deal brexit. the u.k. has until then to explain to the european union whether it wants a long noension, which would mean election or leaving without a .eal i think we are going to see fewer options. we are going to see fewer extensions. we may see one option emerge as a sort of leading alternative to theresa may's deal.

lisa: how do you judge whether or not we are getting closer to a no deal brexit? optionr: no deal is the that every would says they want to avoid, and yet nobody has quite figured out how to avoid it. i guess we judge we are getting closer by whether an alternative to theresa may's deal comes forward and whether the government says it will embrace that. saying shey is not will lead on the basis of whatever parliament decides. hoping that a customs union will emerge victorious because they think that will push more mp's towards theresa may's deal, and others think that would end up splitting the conservative party permanently. i think we will learn something from tonight, but i wouldn't expect it to be decisive. lisa: teresa rafael, thank you.

mathias andus, anne lisa erickson. as we hear the u.k. parliament trying to get some sort of alternative to a hard brexit, markets don't seem to be responding. --a, are you at all wagering waiting, i should say, into the u.k. market, or are you avoiding it altogether in light of the uncertainty? >> we have a neutral stance across the board on equities, whether it is the u.k., continental europe or the u.s. in terms of the actual impact of brexit, our feeling now is it is a little difficult to weigh in on that. it is generally an edge lists risk in that it is a very -- an edgeless risk, given that you cannot see the end of it.

it is hard to see how that outcome is going to pan out. david: let's go over to the brakes question. question. the rates what are you anticipating in terms of accommodative versus tightening policy for the ecb going forward. david: in general, we believe monetary policy is on a more dovish stance. i think what we have seen from global bankers across the best few weeks is a reiteration of how they continue to support that global growth story. going forward, we see it as a more important outcome. we are really in unprecedented territory with where we've come with monetary policy. not only have we had an extraordinary several years of

quantitative easing. it is hard to predict how they are going to react going forward, knowing that they do want to be able to normalize when they can, and yet facing some of the slowing growth data we've seen in recent weeks. anne, we were talking earlier about how some of the pessimism for the european economy has perhaps been maximized and we might be turning a corner. what is your view? >> i think that it is very hard to say. everyone has their favorite wall street expression about trying to catch a falling knife. but if you think about the future, the idea that europe will get even worse or at an accelerating rate, when you think about it, a lot of the one-off global trends that have really buffeted europe should probably start to resolve.

they've got u.s. trade tensions on auto tariffs and other tariffs going, they've got china trade tensions, then you've got brexit going on, which affects the core of europe. situation.itical , any group of countries, any region would suffer from that. i think it represented fundamental deterioration that europe will able to recover. we are still underweight german bunds on the idea we will see some grocery acceleration in germany. we are preferring to be long and some of the higher priority peripheral companies like spain and portugal where the political risk has diminished somewhat recently, and the economic .pside resolution

that should bode well for these countries. lisa: thank you so much. stick with us. coming up, breaking up could be hard to do. dow dupont cut its first quarter profit outlook as it looks towards its standalone debut. more of that in today's bottom line. this is bloomberg. ♪

♪ david: time now for the bottom line. after thatng lyft ipo last week got tearing out of the box. it is now getting back some of that that's morning. still, extraordinary gains last week. lisa: it is crucial for all of the ipo's lined up for this year. also crucial for some of the private valuations of these big tech unicorns, even if they don't go public. if the ipo price goes below, not

great. meanwhile, i am watching facebook. you had mark zuckerberg over the weekend say he thinks there should be more regulation on data and internet usage. he says, "we have a responsibility to keep people ."fe on our services interesting that he's trying to come out on the forefront now. a little late, no? david: their chief lobbyist came out after that and said we need international regulations to apply to everybody, so they are trying to get in front of it? lisa: maybe. to be watched. >> the third story -- lisa: the third story is dow dupont. ,or more on the spin off of dow which as of today will be separate, we turn to brooke

sutherland. they always meant to break this thing up once they put it together, and dow is separating today. reporter: the idea was to do this three way split. it is interesting to me because while now and upon are putting their agricultural -- while dow upont are putting their agricultural segments aside, really this dow business going public later this week is sort of the original dow chemical. lisa: that's where i was going to ask about this. can you give us the overall thesis with the jingle bell the we've been dealing with? reporter: they've been cutting a lot of costs. they've been streamlining the business structure, so they have really narrow down the numbers of divisions between these entities. when they break up, you will have much more focused

companies. i think that is reflected in their poor fi -- in their profit outlooks. you did see a little bit of weakness in the agricultural business, but that was mostly because of flooding. the sort of growing global backlash, if you can isolate that in its own business, i think that backs up the underlying logic of the breakup. lisa: new york is going to become the second state to ban plastic bags. david: when this first was announced, i didn't hear that the special counsel would have troubles. reporter: it is more the doctors. they were not anticipating the

economy being at this stage. i think that is a real factor here. they are credit, planning to start share repurchase is right off the bat, so that may bring investors in that otherwise may not have been ideal here. david: brooke sutherland, thanks so much for being with us. we have more news about the airlines. it turns out they have resolved the problem. lisa: that doesn't necessarily answer the question of what caused it. david: coming up, we break february sales data and take a look at friday jobs numbers. this is bloomberg. ♪

lisa: this is "bloomberg daybreak" i am lisa abramowicz. better-than-expected china manufacturing data. s&p and dow both up ahead of the open.

just one hour away. ftse also up. the cac 40 in paris also rising. german ten-year yields rising the most on a basis point level in more than a month. 10-year gilts also indicated higher. the euro gaining and crude at the highest level since november. david: retail sales numbers. it is exactly what was forecast. .2%. if you take out auto, it is up .4%. , itou take out auto and gas is up .6%. revisions for the prior month -- remember the last month was weak. 1.7%.up to gas,u take out autos and retail sales numbers -- lisa: looked pretty good -- no, no. david: it is negative.

up for last month. it dropped. lisa: europe retail sales surveyng .2% versus the of a .2% gain so this is quite a big mess, which is interesting to me considering the consumer has been driving the economic recovery. david: where i got it right was last month was revised up. right got it wrong was this month is in the negative, which will only -- add: which will only support to the federal reserve position to be on hold. oneresting to see a miss retail sales when the consumer is still driving the economic bull market in the u.s. it raises the question of are we running out of steam from the consumer standpoint without bigger wage gains. still with us are and matthias and lisa erickson.

we did see this miss in retail sales. what is your sense of this? how big of a surprise is this? ann: i would not call it a surprise. i was thinking we would have better retail sales numbers. with a good month last month. we had a very weak february. we are past the point where we can blame this on the government shutdown. the upward revision of the prior month are important and then make the negative less bad, i guess you could say, but all in all it is not a great report. it is not a endorsement of the u.s. consumer. the u.s. consumer overall is in good shape. good job growth, low unemployment, low household leverage. it is a consumer that is not on the sidelines already but this reported showing the consumer does not have a todd of confidence. -- a ton of confidence.

it will be interesting to see how the markets play this week retail sales number off the very strong china pmi. david: but those points she just made together. on the one hand we have these weak numbers, on the other hand we have strong job numbers overall. strong wage growth. how do you square those things? it is hard to say right now exactly what is going on with that retail sales number. if we look the picture overall, we have remained confident in the u.s. consumer and as a key driver of that continued moderate taste of growth in the -- moderate paced growth in the u.s.. we have a nice basic jobs market. unemployment is at record lows and we have nice wage gains. even if spending this particular month did not come in as strong as consensus, they are a solid base to continue to support the economy and i think what is

going to be key moving forward is how we continue to see that economic data comment --, in -- if that continues at a steady pace, i think we could see those numbers bounced back. lisa: that gives edification to people are saying the federal reserve is right. is that good news? do we have a sense that if the fed remains dovish, that will remain supportive of risk assets or are we getting to a point where weaknesses bad it will mean that end of this credit cycle? ann: i think we are getting closer to that point but we are not there yet. credit valuations are bold but there are still decent economic activity. now comes from our credit teams that are active funds. we are focusing more on selection, trying to find the right individual bonds in the credit sector.

at the moment we liking financials and the energy complex, which already went through its top period in 2015 and 2016. in any scenario we can build looking forward, we have the yield curve which is likely to be steeper and that is positive toward the financial sector. we are past the point of the fed put, we have a fat on the sidelines, but bad news is bad news and good news is good news. david: when you say the yield curve is steeper, that is because the long end will come up higher. what will drive the long end higher? in either situation, if you have a good new situation, you have a longer end selling off, yields rising optimism about future economic growth. you do not have the short end selling off because the fed has said we will not be in a hurry to raise short-term rates.

in a bad news scenario, you have on the sidelines and communicating a strong willingness to cut rates. even though they've not said it, by being as dovish as they are, if the bad news persisted you would see the fed willing to cut rates quickly. it seems like the consensus in markets is the fed will remain highly accommodative for the foreseeable future and it will be supportive of risk assets. what is your most contrary and take and contrary recommendation to investors? lisa e.: our most contrary recommendation is worst case that we still see that economic data turning downwards. it is nice we have the central bank being supportive and focusing on that patients going forward. what we have seen from the bottom up and the macro data is

we're at a fulcrum point. while our base case is for moderate growth, there has been a trend of slowing in the forward earnings estimates for the s&p 500, as well as in the rate of change on the economic data. ift contrarian look would be we do not see those economic fundamentals coming through, really to continue to support that growth scenario. anne matthias and lisa erickson. thank you very much for being with us. viviana hurtado is here with first word news. viviana: china is making goodwill gestures before trade talks with the u.s. resume. beijing is extending a suspension of tariffs imposed on american cars and including the drug that no and a list of can -- the drug sentinel and a list of controlled substances. ganturkey, president erdo

nationalist alliance losing control of opera and other key cities in municipal elections. the opposition pulling ahead in the largest city of istanbul. turkey has been hurt by a recession. erdgoan's critics accuse of him running increasing -- end --ian with no --edian with no experience winning 30% of the vote. it has tapped into ukraine's lack of progress. the president receiving under 70% of the vote. the runoff is scheduled for april 21. 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. david: thanks. coming up, america's factories are hiring again.

we will speak with the legion chairman and ceo about where the jobs are in manufacturing in today's follow the lead. this is bloomberg. ♪

viviana: this is "bloomberg daybreak." coming up on bloomberg markets, cal stir cio. this is "bloomberg daybreak." a french advertising giant is

confirming it is in talks for what could be a $5 billion digital marketing acquisition. alliance data systems is looking to sell its epsilon unit. it helps clients tailor their app to their customer. epsilon already attracted a joint offer from goldman sachs. two big names in automaking may join forces. bloomberg has learned psa and cf chrysler are pursuing a partnership to form a super platform. that would reduce their investment costs. psa is a french company. the home of the whopper will now offer up plant-based versions of the giant hamburger. burger king says the sandwich we --d patties from impossible the sandwich will use patties from impossible foods. the company's burgers are designed to mimic meet using a -- mimic meat using a novel ingredient. follow the lead.

a deep dive into the stories making headlines and moving markets. all of this week will be focusing on different areas of the u.s. job market. today we are looking at a sector seeing a resurgence. american manufacturing. joining us is michael mckee. for u.s.the problem manufacturing is there is a difference between what we make and who makes it. for years we have seen declining employment in manufacturing, but not a decline in the number of things we make. donald trump campaigned on the idea of this being a national security problem, but take a look at this. on the white line, the value added by manufacturing. it continues to go up. we are still making as much as if not more than we made before. the percentage of manufacturing as a percentage of gdp has been going down is become more of a service economy. that means we have needed fewer

workers. automation making a big difference. nevertheless, we are seeing a rebound in hiring. we peaked in 1979 in terms of the number of manufacturing workers and have been going down ever since. it has been bipartisan. the red is republican presidents, the blue is democratic presidents. manufacturing employment declined and hit a low and the 2008 financial crisis. since then, starting under barack obama and accelerating under donald trump, we are seeing manufacturing jobs come back. we're a long way from the peak. thanks to automation, will probably never get back there but that does not mean we are not making in manufacturing as much stuff as we did in the past. lisa: thank you so much. it inside read on manufacturing -- four inside late we are joined by dave petratis, allegiant chairman. the company makes security

products and employs 10,000 workers globally, 2500 in the u.s.. michael mckee sticking with us. dave, i want to get your sense, given all the talk about how automation is going to kill manufacturing jobs, about how the u.s. economy is moving from manufacturing to service, where are you the biggest growth in manufacturing? we see growth in manufacturing in technical jobs, people able to manage those automation schemes at higher levels of pay. i have been a part of that manufacturing story over my 30 years and have lived that. i think there is a great underlying story. neveran manufacturing has -- is doing a great job of driving productivity. that is why the goods and services produced have never been higher. the skills of those jobs are at a higher level and that puts

challenges on manufacturing like allegiant. where for your company, are you in the cycle of increasing productivity through automation? are you as far as we can get given where we are with technology or do you have a ways to go? dave: i would say we have advanced the capabilities of automation in our style of product -- it never ends, but the real breakthrough that is coming in the next decade is digitization. how we use information technology, artificial intelligence, and information to be smarter manufacturers. lisa: i want to get to the myth versus the reality of the idea of automation, artificial intelligence will kill the necessity for humans. do you think there is a substantial amount of truth to the idea that the technological advances are steadily reducing the need for humans? dave: i challenge that.

where you have high variation, you will always have the need for human input. -- if you're manufacturing products have little labor input, like a cell phone, you can automate that. where you add variation to the product that is being developed or manufacturing, it requires labor. an example would be here in indianapolis. we have manufactured for 100 years and shipped globally here. we produce 2200 variations of a device that is in the building you occupy today. it requires human input because of the variations. a variety of industries, automation will not kill the need for humans deals in manufacturing globally. david: when it comes to manufacturing, their two dimensions. one is automation and the other is location. president trump is focused on

location, whether the autos are made in mexico or here. when you have that decline in manufacturing jobs, how much of that is automation and how much is shipping overseas? michael: it is a combination. automation has had a bigger impact than shipping jobs overseas, but both of that the manufacturing sector. the word david use is important -- skills. unskilled labor in manufacturing has moved overseas. anybody can do it in the pay is small. the question is the kind of workers his company needs to manage the automation, to manage the digitization, are those in short supply? is the education system producing the right kind of workers and what we do going forward to build those skills? lisa: pick up on that. this is a great point. there is a skills shortage a lot of people talk about. are you finding it difficult to find the employees you need to

hire and if so are you retrain people? dave: if you go to the allegiant website, you will see over 100 jobs posted. things like cnc operators, data managers, input managers. the challenge of you go back 30 years ago, the myth was you better study hard or you will end in a factory. that could be the greatest opportunity in young people's lives because we train and develop in a variety of's hills. -- a variety of skills. we provide benefits, 401(k) programs where people can learn and grow. what needs to change at the middle school and high school level is to put an equal weight or value on somebody that is accelerating in a technical path , maybe into a factory of the .uture, or university path if you go to places like germany

, technical growth and university growth is valued by society. here we look down sometimes on young people who are not going on the university path. that needs to change. michael: we talk about education and changing the way people come into the labor force. one of the big problems we have is people who are already in the labor force and no longer have skills. are you able to hire older workers and train them and you find older workers want to come to you and get retrained? we welcome a senior workforce. more stable, willing to learn, we absolutely will invest in people coming in the door at any age. we offer flexibility as well so that if i'm in the later part of my career, your options in terms of the number of hours worked. manufacturing has flexed a lot,

not only in adding skills to workers but giving flexibility so people can have a lifestyle they want. we think it is important to attract workers that are in the second half or fourth quarter of their career. david: you mentioned germany. you are a multinational company. compare and contrast the united states in terms of the training for its workforce with other countries. you said germany does a good job . are we gaining on other countries? are we losing? is the gap getting larger? dave: in terms of the skills gaps out of high school and university, the u.s. is falling behind. if i take europe, and i've spent many years in europe, we have many manufacturing plants in europe. there is a decision point about the age of 14 or 15, will i take a technical path or university path. i think this is good for young people.

that does not mean you limit them, but you better prepare them for the jobs of today. i have been aggressive in communicating with government , a technical college and universities, we can better prepare young people coming into the workforce so they can excel when they in a factory door. lisa: dave petratis, thank you so much. bloombergs michael mckee, our thanks to you as well. david, we do have breaking news. david: kellogg will sell keebler and related units to ferrero for $1.3 billion. , kelloggad of the open shares of more than 1%. they are fluctuating, but there is a question of whether we are looking at the deacon glamorization -- the decong

lomorization of american businesses. david: there's a report the price might be be -- the price $1 billion andn $1.5 billion. lisa: new york becomes the second state to ban single use plastic bags. plastic industry new york concern about their business model. this is bloomberg. ♪

lisa: here is what i am watching. new york state's ban on single use plastic bags along with the sweeping plan they pastor for the weekend. a lot of new proposals. david: a controversial budget coming out of albany. they will not be able to drive south of 60 streets unless you pay a fee. so wasteful.

lisa: there's a question of how much it will reduce the plastic bag usage. new york becomes the second state behind california to ban plastic bags. there is a question of whether it will be an option for businesses to charge for paperbacks. this does not apply to take out containers, toronto, -- to raw meat, to dry cleaning. lisa: it is a big issue for starbucks. the straws, they will not do this anymore. coming up next on bloomberg the income head.fixed live from new york, this is bloomberg. ♪

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

jonathan: coming up, a warm welcome to q2. signs emerging chinese stimulus is starting to bite. european optimism even as data elsewhere -- u.s. optimism becoming murkier. the cause for rate cuts growing. good morning. stocks up, bonds lower, yields up for basis points to 2.44% on the 10 year. futures firmer. the euro, even with dreadful data, the euro-dollar 1.1233. .e begin with our top story the belief that were china goes, the world will follow. >> the data is encouraging. >> very encouraging. >> i think china is forming a bumpy bottom. >> close to the chinese economy bottoming out. >>