global equities off to a strong start in the second quarter on encouraging numbers out of china and the united states, but is there enough to keep going? parliament still doesn't like any of the brexit alternatives as prime minister may goes to an all-day cabinet meeting, up against a hard brexit that no one wants. and we talk with the head of ford's european operations about and a possible trade war with united states means for his business. i'm david westin, here with lisa abramowicz. today.eel is off again lisa: we are watching lift bankshares -- we are watching lyft shares. this is an important indicator for other unicorns set to go public this year. we should bring you some breaking news. we are getting earnings from

walgreens. second quarter adjusted earning $1.64, below the estimate of $1.72. interesting to see if sales are part of the problem given the merger and whether they can find synergy and develop off each other. david: in premarket trading they are down just under 1%. lisa: and they are cutting forecasts. david: it doesn't look good going forward. we know walgreens is forming all of these partnerships with humana and fedex, and it will take a while to see those kick in. lisa: net sales were very much in line. there is something else that has to do with cost savings or lack thereof. we will bring you more on that as we get it. in the meantime, let's get caught up on markets. we have kind of meandering

markets looking for direction after yesterday's rally. nasdaq futures not doing anything. stocks in europe eking out again. stoxx --ching new -- stoxx in europe eking out a gain. crude reaching new 2019 heights. david: we are joined by peggy collins. this is a chart that illustrates something very interesting. the yellow line is the s&p 500. the blue and white line show that expectations are lowering about the fed cutting rates, so the s&p still went up. it is not just depending on easing for the fed. reporter: we were talking about the big divide in markets being between the 10 year yield going up.

the environment in which the fed is cutting rates is probably not good for stocks. what we've had in recent days since we inverted is that the amount of easing priced in is actually going down fairly materially >> -- fairly materially. i think that shows perhaps we are transitioning to an environment where we can handle good news. it is a far cry from being able to handle less easing, but thankfully there's tons of basis points before we have to think about that. david: we do seem to be -- lisa: we do seem to be entering a new paradigm where you end up having a central reserve with a new mandate. we are not going to hike until we see the whites' of inflation's eyes. i have to wonder, from the investing standpoint, how much conviction is there right now? line, theove that

eyes. of inflation's i think they are reacting to uncertainty on where the fed is going. we are seeing the s&p up about 14% year-to-date, but as we saw with walgreens a bit ago, earnings are starting to flow out for the first quarter. that is going to be where the tide starts to go as far as the next few weeks, reacting to those profit margins. david: today is a different day. it looks like markets are coming off a little bit from enthusiasm. luke: lyft was getting crushed and yougood friday, might think markets were a little rocky, but actually it was the days following that october 3 statement from powell

that we really see risk asset statements come under pressure. meanwhile, we are still worried about brexit. we have the british parliament yesterday rejecting a whole slew of additional options to avoid a no brexit deal. this is making some investors optimistic. take a listen to goldman sachs' co-head of global markets and emerging market strategy. >> we are angling towards a softer brexit package, probably a permanent customs union, possibly packaged together with a second referendum. we think that will be coming together in the next one to two days. we are coming to a big finish here, but i certainly wouldn't say it is not tradable. we think this is an important market opportunity. lisa: an important opportunity that might lead to upside for

the pound. how consensus is that? luke: fairly out of consensus, i'd say. his title is very important, head of global exchange and emerging market strategy. it does take an emerging market strategist to get a handle on what it is like in britain now. that's what the politics are like. david: i am struck by the fact everyone says we could have a hard brexit, and yet nobody is prepared for it. i have not heard what happens if there is a hard brexit. peggy: i think investors are so into this so lulled constant news that things are going so poorly that we have not seen what it looks like in the markets. david: the markets haven't digested it, but they haven't even told us what we need to digest. what exactly happens? do we really have trucks lined up or not? what happens to people living in

england who are europeans? peggy: that is a really good point. the whole idea of a no deal brexit is as unclear as brexit. we don't know how that will fixate. lisa: in terms of investment inm data around investment the u.k., it is softening to the lowest in a year. also low construction stats out of the u.k. it does appear like businesses in the u.k. are bracing for a negative. david: let's go to trade. whether it is brexit or the eu and the u.s., whether it is china, it is part of the agenda. there's a lot of concern about global trade growth as it has turned down. are the markets properly anticipating the possibility of world problems with trade? luke: i think that chart you're showing has more to do with the endogenous slowing in china that

had ripple effects for the european union more so than it is even about trade. i think in terms of that chart and how it will change, people will be more focused on the data that came over the weekend as a positive catalyst than anything that happens this weekend trade talks. we are now in a position where shares have been going crazy, up nearly 30% this year. states are you are trying to expose stocks that are doing better. more almost like we have china optimism priced into u.s. stocks then china stocks. data out ofconomic china might indicate the pboc they won't have to ease as much of a which could be bad news. honestly, this is blowing my mind. good news might be bad news for china. peggy: right.

somees look like we got slashing this year based on the fact that these tariff war's are still ongoing, so it is an overhang on the markets globally. david: thank you very much for being with us. later in the hour i will speak with stephen armstrong, ford of europe's chairman. we will talk about trade and how it might affect his business. in the meantime, walgreens is moving. lisa: let's take a look at walgreens shares, sharply lower, down more than 6% in premarket trading. they cut their full-year adjusted forecast. they are also looking at lower-than-expected revenue and sales. example,seann, for $1.64.quarter eps at $1.72.imate was

it is also the cost savings they are looking for as well. david: there's margin pressure going on there. what to say they are going to do is digitize and make a number of senior appointments to bring change to the business. lisa: what you are seeing is that cvs shares are also lower following walgreens. this is raising some questions about the whole model of conglomerates in this space with health care, the idea of beauty and health moving with pharmaceuticals, thinking perhaps you can get synergy to offset costs. maybe it is not so easy, which is making some people in the markets nervous this morning. we haven't actually seen the results. coming up, more on the equity rally pause. longview economics' chief executive and market strategist

joins us next with some contrarian calls. from new york, this is bloomberg. ♪

♪ viviana: this is "bloomberg daybreak." falling, walgreens are the drugstore chain cutting its annual forecast. company says growth will roughly be flat. shares of walgreens rival cvs are also lower. lyft resumed its drop. the ride-hailing company is lower in premarket trading after closing yesterday below its ipo. it is a worrying sign for other unicorns that plan to list this year, among them uber, pinterest

postmates. that is the bloomberg business flash. david: stockmarkets got off to a strong start in the first day of the second quarter. are concerned that they may be getting ahead of themselves, baking in an accommodative federal reserve. >> at the margin it does provide relief, and we did get the dot plot going down from two hikes to none. but we are really running on fumes be on this. david: it is interesting, running on fumes. the chinese pmi were not fumes. something is going on. lisa: there are some things

going on. right now high-yield bond yields are the lowest since september last year. risk onave full on message coming from the fed. david: typically if you had 10 year yields where they are, you would think we are in trouble, and yet we are not seeing credit at all. lisa: no. the idea is the federal reserve is trying to prolong the goldilocks scenario. right now markets are saying you've done it, you're in. the question is if you are , -- onrunning on fumes fumes. how long do you think before people start talking about risk incentives and the idea of

creating incentive? coming up, british prime minister theresa may fights for her deal. she is at a marathon meeting with her cabinet right now. more on her efforts to break the stalemate next. this is bloomberg. ♪

♪ lisa: theresa may continues to fight to get her brexit deal approved by parliament, but still uncertainty as eu chief negotiator michel barnier says a no deal exit from the eu is likely. the option of no deal looks very likely. i have to be very sincere with you. we've prepared for no deal. it is not the option i would have gone for.

you don't need a negotiator on no deal, do you? you need a negotiator for a deal. lisa: joining us from london, chris watling of longview economics. it seems like it is very likely, arnier, of nob deal, and yet you are positive on u.k. equities. how is that? guest: i think barnier is just negotiating. i think theresa may will be going back to europe for the next european summit on april 10 with nothing much to say, and they will push hard and negotiate hard, and she will end up with a long extension. barnier is simply negotiating that now by talking about no deal. he's just laying out that they think no deal might happen, and therefore we will end up with a long extension is a compromise. for a couplegood

more years, and i think that will be where we end up. david: let's assume that's right and that europeans are not sincere in saying they will not give a long extension. it is just kicking the can down the road. why would that cause european assets to increase significantly during that long extension? guest: it is not the main thing driving european assets. the main thing is global reflation. but what we are doing with the brexit story is just kicking the can down the road and end up probably with a second referendum, and britain voting to stay would be my guess. you are slowly moving back to this old status quo of britain within the european union. as i've said before in this movement, i think the remain ers have largely won.

global reflation is the theme of the year, and europe will benefit from that. lisa: global reflation? most people we talked to say there is zero sign of accelerating inflation globally. what gives you confidence we are seeing the beginning of something more sustained that could be called reflation? guest: well, the confidence comes from the fact that central banks have been moving. in fact, markets have been predicting what central banks are going to do, and central banks have been following. a bigbeen a -- we've had shift across the yield curve in 10 year and the short end. we seen central banks around the world become much more dovish. japanese minutes last week, south korea making dovish noises, the australian central bank making vaguely dovish noises, and so on and so forth. it is a long list of federal beingthat have gone from

on hold to making maybe dovish noises. the yield curve comes first, and the economic data follows. david: it appears the fed is looking at asset values to some extent, and being more accommodative because they are worried about financial markets. at the same time, take me through how this works. we had central banks being pretty accommodative, especially in europe, but it has not gotten inflation going. what is going to change so that a very accommodative fed and easy be will trigger inflation? guest: i think they will trigger a lot of reflation, which is listing asset -- which is listing asset prices. aggressive inflation wouldn't be my concern. i think we are talking about

economic reflation and financial market reflation. ,hat is triggered by liquidity and the shift starts from central banks. the market is in good shape, i think, here. lisa: it is sort of a catch 22. the better the economy gets, the more risk assets rally, the less inclined central banks are to remain dovish. why is that different? why is it that if things do recover and we get global it affects policies? won't central banks respond until they see the whites of the eyes of inflation or until they see a sense that

labor markets are even tighter. it is an order of play, and stockmarkets go first. david: as i listen to you and read what you are written, you are making a somewhat more subtle point which is that there is a difference between the economy and the markets. reflation is good for the markets and asset values, even if the economy is not growing. at some point, does that become dangerous? is that good if you are an investor rather than a trader? guest: well, again, it depends on the stiction between trading and investing. in terms of the long cycle here, we are a long way through the economic cycle. we are starting to get the first crack's in the economic cycle we are in whatever you call it in baseball, the seventh or eighth ending, but not quite the ninth. lisa: we are in the 15th inning. we've been saying eighth or

ninth inning for three years. [laughter] guest: i don't know how the game works anyway. [laughter] guest: but there's a couple more endings i think is the point. lisa: we just want to finish up here. just to get a sense of how much risk this sort of goldilocks scenario of 29th seen you for see gives us for 2020 -- you see for 2019 gives us for 2020. the next downturn i think will be mild. if you look at the it balances

-- the imbalances from an economic perspective, they are pretty minor. there's been a lot of healing, deleveraging. the corporate sector is in reasonable shape. i don't see a big economic downturn. i think there will be a much 18 aaa a economic impact four months down the line -- 18 to 24 months down the line. lisa: thank you. coming up, global carmakers raced to unveil their versions of next generation cars. stephen armstrong, ford of europe chairman, is next. you will be talking with david westin, digging into the electric vehicles. this is bloomberg. ♪ want more from your entertainment experience?

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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. the biggest week in television is almost here. xfinity watchathon week. starting april 8th, enjoy free access to the best shows and movies from hbo, showtime, epix and more. what! whether it's more jaw droppers, standing o's upon standing o's or tv's biggest show stoppers. get more into what you're into. get ready to watch with xfinity x1 or the xfinity stream app. xfinity watchathon week. free starting april 8th. boop! ♪ lisa: markets are trying to find some direction. s&p and nasdaq futures flat.

ftse 100 up, interesting given the fact that parliament can't decide what to do about brexit. let's get a check of what's going on across assets. two year yields lower. bitcoin really in the news today, surging dramatically. the reason? your guess is probably as good as anyone else's. the pound is declining against the dollar as we get some sort deal will over what avoid a hard brexit. interestingly, copper indicated lower. it seems to be risk off when it comes to some of the economic indicating market indicators. david: we are going to turn to automobiles now. auto companies around the world are making the transition to autonomous and electric vehicles, and ford takes the next step in that direction today with a big announcement out of europe. with the details we welcome n armstrong, ford of

europe chair, coming to us from amsterdam. what can you tell us about today? guest: thanks. it is great to be on air with you today. we've been in amsterdam revealing to the team here 16 new electrified vehicles across a whole range, starting with our hybrid fiesta all the way up to our future look at transit. we have a lot of electric vacation -- of electrification news today. david: give us some specs and figures about this. how large is the investment? ford in detroit has announced a significant electrification investment. how much will it be for europe? guest: what we are announcing today is part of that overall announcement that was made in michigan, part of $11 billion

worth of electrification. we've got 16 new products we've announced today. eight of them will go on sale by the end of this year. we've been talking about a full range of plug-in hybrids and self charging hybrids, so this .eally is a substantial place people who have been waiting for because,e more abound this is where we demonstrate it is not just one or two vehicles. it is a range across. out.: go five years how much of the fleet in europe will be hybrid as opposed to complete electrified vehicles? guest: if we think about electrification in terms of the hybrid and full battery

electric, we think by the minimum of the next decade, it will be 50% of vehicles sold that are electrified to some degree. we think probably in 2025, something in the order of 20% of the fleet will be full battery electric vehicles. hybrids will still be a substantial part of new vehicles sold because they offer a level of flexibility and capability to those that need some electrification, but don't, for whatever reason couple want to go to a full battery electric vehicle. going to be a very important part of the lineup for many years to come. automobilearious companies around the world move to automation and autonomous vehicles, there's a lot of teaming up going on. volkswagen and ford have been talking about various ways they can work together on ep's and 's.

how does this factor into the announcement you are making today? guest: the announcements today are not a part of the alliance we are forming with volkswagen. these are products we are going to be producing now, before get sharing electrification technologies. we will be collaborating on our next generation of commercial vehicles, so our smaller pickup trucks and light commercial vehicles. the news that we feared today is not linked to the bw alliance. it is products that will bring to market the whole receive the collaboration. take brexit, which your ceo has said has affected your vision making, and possible trade disputes between the

united states and europe. how does that potentially affect what you will be doing in europe , specifically with electric vehicles? brexit, of course, would be a disaster for our industry because we spent the last 40 years working with a supply chain i can barely move freely across the borders with europe, so we have a supply chain that is structured specifically to do that. we've been encouraging, but the british government and authorities in brussels came to an agreement that will allow us to maintain friction, thus movement of goods at the border, and tara free x -- and tariff free imports and exports. anything that mix it more difficult to move products around europe will limit our ability to continue to invest,

potentially, in the u.k. we want to continue to have a big is this in the u.k. anything that would impact our competitiveness in the u.k. would cause us to think a bgain about our future footprint and where we make investment. i encourage the u.k. government to find a way through the current impasse. david: finally, today you are announcing expansion of forward in the electric vehicle. at the same time, you've been stepping back, restructuring the overall plan in europe, which will involve letting go quite a few employees. where are you in that process, and when will we see the effects on the bottom line for ford? we announced last week some of the latest steps in that process, so the restructuring of

our business in russia, where we said we would be exiting the passenger vehicle business and concentrating on successful wemercial vehicles taylor: also -- commercial vehicles. we also announced we would seek reduction of the c max vehicle at our facilities. so you are starting to see some for our actions employees. we've said into 2020 we will continue to make those announcements to have a positive impact on our bottom line through 2020 and beyond as we complete the restructuring. david: thank you very much. that is stephen armstrong, ford of europe chair, coming to us from amsterdam. lisa: still with us, chris

watling of longview economics. we have seen trade moved sharply lower globally over the past year or so. how does that factor into your bullish view on european equities, especially given health potential a we ighting we have from the auto industry? guest: i think if trump imposed tariffs on the auto industry, that would be a mild negative. but the less powerful trade is, the more growth comes under pressure and he rely increasingly on the central bank to the heavy lifting of getting markets higher, which means all liquidity. financial markets are about liquidity and prime angel -- and

growth. so tariffs are perversely a bit of a positive. lisa: wait, i'm struggling to understand that. please go on. [laughter] guest: it's contorted. i understand. don't thinking is i we will get tariffs on european autos anyway, but if we did, i think the economics mean that growth is under a bit more pressure, but since central banks have to do more of the ing, financial markets like liquidity. david: you may not know baseball, but i think you are a spin bowler. [laughter] david: it is fascinating. it is almost as if bad news is almost always good news because it will trigger a central bank plot. that may be over some of buying it, but isn't that basically what you are saying? if there is bad news such as

tariffs, it will cause central banks to make sure they are injecting liquidity into the marketplace. guest: exactly. you probably wouldn't want to but the auto sector until it was bad news, but you would buy the market as a whole. encouragest, it options from the central bank liftingns more of the is done by central banks rather than the economy in general. lisa: what do economists say when you present your views? ironically, if you take a broader consensus then just my at the fundlook managers survey every month, the favorite short position at the moment is european equities.

i like that. that is encouraging to me. it means everyone is out, no one is in. there's lots of room for upside and lots of buying to come. thanks a been very worried for the european economy, but that is good news in terms of the stock market, and that is a good time to buy it. people are worried about europe, and i'm quite keen on it. david: finally, i want to turn to china for a moment. at least a month ago or so, you were saying china really struggling with ppi. if there economy is slowing, may it be a good thing because you have more fiscal or monetary stimulus? guest: that's right. the problems in china resulted in lots of stimulus. foraw this total credit jan, and feb was very strong.

weakata in the economy is in the banks are responding with stimulus. the chinese market is in very good shape and taking off, if you like. david: chris, thank you so much. that is chris watling of longview economics in london. let's turn to viviana hurtado with first word news. viviana: president trump now says republicans would wait until after the 2020 election to hold a vote to replace obamacare. his late-night tweet coming after he proclaimed last week republicans had a new plan. this political u-turn is a sign health care will take central stage in his reelection campaign. a delay in trade talks with the u.s. could further provoke trump's unhappiness with the european union taylor: leaders -- european union. the main sticking points include the role of climate and the

environment. the eu still unhappy the u.s. pulled out of the world clap it -- world climate accord. boeing engineers are working to update a system linked to two fatal crashes in five months. boeing says it will not be ready until the coming weeks. 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. lisa: we want to bring you some breaking news. itskrock is undertaking most sweeping organizational overhaul in a decade, citing "the wall street journal." they've been tweaking rules every year, and they announced , but this is really

something out of the ordinary that comes out of the $6 in aion investment manager race to the bottom for investment managers, as well as slowing inflows and a question about where they will generate revenue going forward that investors really do not want to pay any of the sort of fee on their funds. blackrock certainly responding to some of these pressures. it will be interesting to see whether this is accompanied by additional job cuts and who ends up getting more power internally. david: it is a fascinating story because blackrock has grown a lot through passive investment. larry fink is very much the head of it, but he's got to start thinking about succession. lisa: absolutely. there's also the question that the more assets you have, that doesn't mean you have the

most. so where is the alternative? is it shareholding, some other business, data? there are a lot of questions, and blackrock trying to address those with the biggest reorganizational shift in a decade. we will bring you more on that as it develops. aming up, lyft stock taking wrong turn, falling below its listing price. this is bloomberg. ♪

viviana: this is "bloomberg daybreak." coming up in the next hour, jeff solomon, cowan's ceo. ♪

viviana: this is "bloomberg daybreak." i'm the ve on or to hutto with your bloomberg business flash. as lisa david broke -- lisa and david broke moments ago, blackrock is launching its biggest organizational overhaul in a decade. the world's largest asset manager is installing new leaders at a key new investment dimension -- investment division and reorganizing staff. whole foods will lower prices on hundreds of items, price cuts averaging about 20%. amazon bought whole foods in an effort to catch up to walmart and kroger in grocery sales. for every whole foods there are about 10 walmarts in the u.s.. two submitting concessions to

antitrust regulators. offer to companies sell overlapping units to ease concerns of a combined business would have too much power to raise prices. that is your bloomberg business flash. lisa: thank you so much. really, this is remarkable news about blackrock because it indicates some of the pressures the entire nasa -- the entire asset management industry have been under. we will see their vision for the path forward. david: we don't know exactly how it will play out. having been at some of these announcements, good for them to get ahead of it rather than ,aving full reporting like us to come out and say here's the plan. lisa: i am so sorry to all those journalists that didn't break it ahead of time. let's talk about what wall street is buzzing about this morning. first up, lyft falls below its ipo price as analysts raise

concerns about profitability. bitcoin's mystery surge. the cryptocurrency rose as much as 20%. traders don't know why. manhattan home sellers seeing inventories rise as buyers say there is no rush to make a purchase. david: joining us now is bloomberg's cross-ice at reporter. facebook went below theirs as well, so it doesn't tell the whole story. reporter: it is not necessarily a portent of doom, but if you has beenhich monitoring, this concern about being able to grow, these are things you knew on friday and thursday. i don't know why they started to hit now. david: two or three days ago they said they are not sure when we will make money.

why didn't people pay attention? lisa: they really didn't because they have a lot of potential. well, let's see. bitcoin brings us to our second story. we didn't have to talk about bitcoin for months, and all it surged 70% in an hour. it's market price increased by $17 billion in an hour. are some theories as to what prompted this sudden surge? it may besuggested part of april fools. i would love to get a shout out or whormer hedge fund yesterday tweeted out a bitcoin

target and said it looks viable. maybe it is just some people reading the charts better than others. big conferencea with blockchain going on in sell. -- in seoul. the last time this happened they went up 30%. of theaybe this is art greater theory. lisa: maybe there is a greater fool theory failing to take place in the manhattan housing market because sales are slowing as all the uncertainty oversold seductions as well as just in general. of did see the slowest pace first-quarter sales in manhattan since 2009. i thought this was interesting because we seeing this study slow down, but have not seen a

market downturn in prices. that is the key question here. how much does this foretell of some housing downturn? luke: that is something i worry about. offsetng that could value. people saying it is a good time to buy. maybe the interest rate relief will prevent a bit of the price correction relief. when i look at this from a macro view, inflation, where is it? kawa, many thanks for being with us. coming up, john oliver's wwe takedown. more on what i am watching next. this is bloomberg. ♪

♪ avid: blackrock, as of about half an hour ago, news broke about restructuring, the biggest in a decade or so. lisa: here's the question we were just hashing out, does it matter? how much does this matter? how much is this good leadership, and how much anticipation of angst? david: i agree it matters either way. the question is does this reflect the business, as opposed to someone saying we need to move forward? -- liveion, coming up from new york, this is bloomberg. ♪ the biggest week in television is almost here.

xfinity watchathon week. starting april 8th, enjoy free access to the best shows and movies from hbo, showtime, epix and more. what! whether it's more jaw droppers, standing o's upon standing o's or tv's biggest show stoppers. get more into what you're into.

get ready to watch with xfinity x1 or the xfinity stream app. xfinity watchathon week. free starting april 8th. boop! ♪ david: good news is good news.

global equities off to a strong start in the second quarter off of good numbers out of china and the united states, but is there enough to keep it going? parliament still doesn't like any of the brexit alternatives as prime minister may goes into an all day cabinet meeting, up against a hard brexit no one wants. and how strong are we? retail sales, not so much. ism really strong. we talk strength of the u.s. consumer with the head of cowan. welcome to "bloomberg daybreak" on this tuesday, april 2. i'm david westin, here with lisa abramowicz. lisa: great to be here. a lot of corporate news today. the shares down 3% ahead of u.s.open and about 90 -- open in about 90 minutes. really a question here about the

investor appetite for some of these tech darlings as they are slated to go public. david: at the same time, facebook went down off of their ipo price as well, and look at where they are today. lisa: it is premature to make an assumption that lyft is going to do poorly. david: but yes, if you are uber or one of those waiting in the wings, this is not great news. lisa: let's get a check on markets. we are looking at meandering price action. the nasdaq managing to get 1/10 of 1% in the green. positive.urope more crude crawling to a new 2019 hi. slightly risk on, and yet yields drop off. meanwhile, equities did get off to a strong start in the second quarter. bloomberg's taylor riggs has the update. taylor: the s&p 500 closed yesterday at its highest since october after equity markets fell 9% for the month.

global growth doesn't seem that bad. sort of a classic defense sector selloff. that brings me to talk about the yield curve, back in february now up to about five basis points. the 10 year getting a lift, now up seven basis points for the year. coming to my terminal here at g tv . traders are the most short on the vix since 2009. that gives a little bit of pause as we are worried a bit about complacency. this is walgreens boots alliance. shares are off now about a present, seeing earnings-per-share growth flat from an ev year -- from an

earlier guidance, saying significant reimbursement pressure and lower generic deflation,- generic now flat versus previous estimates of 7% to 12%. david: thank, taylor riggs. that is how we are acting in the second day of the quarter. the question is what does it all mean? we turn to jp morgan message minimum -- jp morgan asset management specialist. lisa is going to chuckle and put up a golden cross. [laughter] david: this is fascinating to me. we have the 50 day moving average moving above the 200 day. does that indicate this is not notlacent and all -- complacent at all and the market has a way to run.

worst december since 1991, so where do we from here? you've mentioned the curve. thingses are saying that can slow down, or is it like the past decade where rates are telling you these are very accommodative financial and the path to resistance is even higher, and we would go that way. not only have earnings forecasts in 2019 been slashed, but the consumer, you could make the case right now that the consumer is the healthiest they have ever been in this cycle for three reasons. one, the stock market is 2.5% from all-time highs. the second thing, there's average hourly earnings high in the cycle. debt service ratio

is lower than it has been since 1980. lisa: this raises a question, last?is how long can this how long can we be in this late cycle euphoria? stein was a great advisor to a president. when the president said you keep saying unsustainable, what does it mean? he said unsustainable means things continue until they stop. we don't need the rest of the show. we are north of the grass. the sun is shining. let's have a party. [laughter] a few small little things. harry potter scenario unfolding in the u.k. we don't have a clue where this goes. we don't know the impacts of brexit. we don't know what brexit is. we don't know what 20% of the , will do inomy

response. we have this bizarre situation where italy, and long-term debt, trades below the united states of america. there's a little difference in credit quality. and the interest rates set by s,e policymaking central bank the real interest rate is zero and has been for a long time all over the world. this continues until it stops. when it stops, people won't like it. david: how much of it is because of central banks? that is the fundamental underlying question? i am going to put up a chart that suggests maybe this doesn't

answer the whole question. the yellow line is the s&p coming up. the blue and white line our projections of the fed. if it goes down, it means we are going to get more accommodative. this might suggests it is not just accommodation of the fed driving the market. >> last year and the year before that it was a function of earnings growth. the fed to come of there is nothing they have to do right now. they are at their mutual rate. they've checked both of their mandates, full employment and price stability. we believe a 60% chance of a cut this year, if you look at your own wrip pages. the probability of a cut close to 60% by the end of 2019, that is too much. that, to me, is pricing in a crisis or recession that isn't warranted. late in the cycle, you can't

just count on the central bank. you have to count on fundamental growth in earnings. through someo asset classes and which you prefer. junk bonds or equities? >> we lake erie trades because the fed is keeping rates common. the carriage rate works. you get more return in high-yield then just stragglers. >> selected etf's, shortening your bond portfolio while you of sell, and feed this beast ash at 2%.ly and c lisa: what about emerging --kets versus

>> make a trade deal with china, have everything calm down, soft brexit. lisa: sounds great. >> without those, they may be quieter than you think david: oh, that is all it takes. >> the fed is not hiking anymore. providing total social financing, and that is a good story. david: ok. get an update to on what is making headlines outside the business world. for that we turn to viviana hurtado. british prime minister theresa may will confront her cabinet with a potentially explosive plan to delay brexit by months. she will hold five hours of crisis talks after parliament rejected options put forward to replace her own popular plan. u.k. isrom friday, the

scheduled to leave the european union. brexit may have to be delayed until the end of the year or later. the eu leaders are struggling to a consensus on the role of climate, still unhappy the u.s. pulled out of the harris climate accord. president trump hanging a political u-turn on health care. he now says republicans would wait until after the 2020 elections to hold the vote to replace the affordable care act. his late-night tweet coming after he proclaimed last week that republicans have any plan. this is also a sign the election will take place in his campaign sign the issue will take

center stage in his campaign. david: coming up, more on british prime minister may s effort to break the british -- prime minister may's effort to break the british stalemate. this is bloomberg. ♪

♪ viviana: this is "bloomberg daybreak." blackrock reportedly launching its largest organizational overhaul in a decade according to "the wall street journal." the world's largest money reorganizing the sales staff and shifting two dozen directors into new roles. shares of walgreens boots alliance falling, cutting its annual forecast.

walgreens predicted earnings was rise as much as 12% this year, now seeing growth will roughly be flat. are also rival cvs lower. lyft lower in premarket trading after closing yesterday, but below its ipo price. the slump is a worrying prize for other athletes. -- for other unicorns. lisa: theresa may is fighting to break the british stalemate to get her deal approved. eu chief brexit negotiator michel barnier expressed his doubts earlier today. the option of no deal looks very likely, i have to be very sincere with you.

we've prepared for no deal. it's not the option i would have gone for. you don't need a negotiator on a no deal, do you? you need a negotiator for a deal. lisa: still with us, david and phil. do you think a no deal brexit is likely? if it happens, market response? >> april 12 is kind of breathing down there next. i don't think investors are prepared for that. i don't think investors really expect to that, and we don't really expect that. it hasn't really been expected. we couldn't be more unclear about brexit right now. i think the bigger story is the impact on rates. sentiment is so poor in europe that rates are being held so low, and that is bleeding into treasury flow, leaving the

.conomy david: what does the bond market even have to go on? i don't hear either side in the u.k. or brussels saying these are the issues, this is what happens with goods come up. with services i don't hear anyone laying that out for us. >> they forgot how to say it, but phil is right. the rates issue in the ecb trying to get away from a negative rate which has slaughtered the banks so the new tiers orether it phases, and the new leadership of the ecb, which is likely to -- noman, not italian disrespect to the italians -- is trying to get away from zero because it is destructive. any relief on rates raises those rates. the minute the rates in europe start to go this way instead of

this way, the pressure is on u.s. rates to hold them lower. lisa: hold on a second. if i am understanding this correctly, that means if we do that could endit up being a better case scenario for world assets because if there is a deal that relieves pressure, allows rates to rise, that could be more directive. >> rates rising from negative rates is a good thing. the 10 year is not a good thing come about from 2.5% to 3% is a good thing. i would take this and put it into a perspective. stock, that is where the rates are. flows, that is where the rates change. when you've suppressed to zero you created a altered this and

landscape hugely. you can attribute 20% or 30% of the yield on the 10 year treasury to the yield on the bund. when that stops come of changes, so that makes perfect sense. david: to around the other way. he was saying that when mario draghi raises rates, it creates some pressure. wouldn't he look at what happened to powell last december . that?ario draghi do plus is normalization moving past neutral. if the ecb is perceived as moving too much like the fed was, that is a different story. lisa: given the low rate environment, we are still seeing questionable earnings. boots alliance down in

premarket trading after showing margin pressures. this is going to become an increasing concern. david, what does that say to you? accommodative,re so you are seeing some serious mrs. in margin pressures. >> i think we -- some serious misses in margin pressures. >> i think we are going to see more misses. the trend is going lower. you have global growth slow down , and you no longer have the tailwind of the big repatriation flow to do buybacks and dividends. we've peaked on that. we are on the others. this is not such a wonderful scenario. it feels good right now. spring. [laughter] >> 2900 for the s&p we think is the near-term ceiling.

the way you get above that is by beating those earnings which we think have been taken down to about 4% on the s&p. without better growth and earnings, you are not going to get much past 2900 into that 3000 level until you can raise your earnings forecast. that is certainly possible, but i think a trade deal in capex, you would have to see some sort of return from that optimism from early 2018. david and phil, we are keeping you hostage here. coming up, boeing says it is still working on a fix for its grounded 737 max jets. more on that next in today's bottom line. this is bloomberg. ♪

♪ david: time now for the bottom line, where we look at three companies worth watching this morning. amazon has announced they are going to cut costs on prices of

hundreds of grocery items and whole foods to try and overcome the image that it is high-priced. when they first bought it, they did that. it appears now they don't think they did quite enough. lisa: this is the amazon way. cut prices to the point that there profits are quite small and hope they get enough critical mass to get as much business as possible. david: and it is not good news for kroger. lisa: meanwhile, not good news for appellant here -- for some of the other tech giants looking to go public this year. lyft shares are down 4.5% in premarket trading after the ipo last week. at $65.89 ang now share. not good news for some of the other tech darlings lined up for ipo's later this year. this is going to list it.

lisa: that is a good question. will we see more companies decide to stay private for even longer? david: the third we are watching today is boeing. for more, brooke sutherland joins us. at one point you say it was all fixed, it was all going to be fine. lisa: you are blaming her? [laughter] : that is a good point. they are having to say that even though we said we are going to file this through the faa, we are not quite ready yet. you obviously want them to do that. you want this software fix to be perfect. but this is another example of how boeing's mishandling the communication around this and there is a rush to say we have solved this when maybe that is not really the case. david: did the faa take a look

and say we are not going to approve it? brooke: there is reporting saying the reason why this fix was so delayed, what we didn't see it more immediately after that lion air crash in october, is because boeing really did not want to have additional training for the pilots. the faa pushed to have at least some training on tablets, if not in simulators. there was some quibbling about what type of changes would actually take place, especially regarding the use of sensors and data readings on the dashboard that has been a focus of the congressional testimonies, why those weren't mandated in the first place as a safety feature. lisa: i am trying to figure out why shares are only indicated to be going lower by 0.5%. brooke: i think the thinking is that there is so much already in, but i would disagree with that. these european and chinese

regulators are a totally different question. david: when they are sitting on the ground, that costs money to somebody. brooke: and that is most likely boeing because these are relatively new aircraft. some of these companies had expansion plans. they were expecting a revenue boost, especially in the summer travel season. if you start to see these deliveries coming out, companies not being able to take advantage of travel demand, this does get exponentially more expensive for boeing. david: thank you for being with us today. coming up, changing consumer habits. we take a look at how the sharing economy has changed for the shopper. this is bloomberg. ♪

lisa: this is bloomberg daybreak great i am lisa abramowicz. market trying to find some direction today.

the direction does appear to be nowhere. dow jones futures down barely. ftse 100 climbed higher. of more than 1%. two-year yields dropping. sincen gaining the most february 2014. the pound dropping versus the dollar with the brexit negotiations and copper lower. we are getting economic data with durable goods orders. david: durable goods off 1.6%. .t was projected they were up they revised it last month down .1%. transportation .1% up. .1% down --defense, take out defense, .1% down. durable goods revised lower. lisa: it seems like a mixed bag.

not much of a reaction but feeding this feeling we are not seeing runaway growth, an explosion of orders or anything like that. things and to be holding steady allowing the fed to stay the course. still with us are david scotexit and phil.otek payingata should we be attention to most as an indication the federal reserve should be rethinking their position? david k.: there is an issue in the labor markets we should see in the next couple of months. if we start to see wage pressure eating profit margin, and we start to reallocate in corporate america away from capital to labor, we will start to see the fed say wait a minute but they will go slowly and we will start to see this uptick in the inflation rate that will change

this entire narrative. we think that is coming. labor is time when finally getting energy, and we have a shortage, we have a situation in america where there are more job openings unfilled today than the official than the official count of people looking to fill them. that is extraordinary and that cap is widening. wages,when it comes to it cuts both ways. on the one hand it squeezes margins, on the other hand it is more money in the pocket of consumers. use that u.s. consumers are in great shape, but they are not spending it in retail. phil: the retail summers yesterday were mixed, but we are

looking at a 2% gdp quarter in the first quarter. pretty unexciting. when it comes to your question about the fed, they have taken 2019, theying out of barely have one in 2020. lisa: they have been known to reverse course. [laughter] phil: that is correct. the big story is inflation. it is not 2.1. we need to see sustained inflation at 2.5% for the fed to think about coming in, and that is a low probability. lisa: meanwhile the data we just got shows business equipment orders are continuing to fall. is this the consequence of trade issues or the consequence of weakness we are not factoring in , what is your view? phil: it is trade, it is uncertainty. in italy, that is getting better.

the bodies over the next couple of weeks we will see a trade deal. david: is a trade or uncertainty about whether the demand will be there. you need investment to get productivity up. david k.: i agree with phil on trade. i am not as optimistic about a trade deal. i would like to see one. protectionism is a bad thing and we have it throughout the world in one level or the other. what does protectionism do? it raises changes in prices and it takes away efficiencies and that lowers productivity. you can have amazon cut the price of food in a store and the consumer will say i don't have inflation but the forces are still in play, even if the price of lettuce goes down. david: david and phil, thank you very much for being with us.

emma chandra is standing by here in new york. emma: i'm here with the ceo of how one -- of cowan. thank you much for joining us. we just got that durable goods data coming in. less bad than expected but still down in the prior month revised down. how confident are you in the consumer this year and by extension the u.s. economy through 2019? >> i think we are long in the tooth from the economy from the recovery in the bottom of 2008 and 2009. the always have to be concerned when the recovery has been going this long. consumers are smart. they have to realize their earnings power has to go a lot

sother in this economy they're being smarter about what they're doing with their money. you can make the case that people need to be more aware of their personal finances. do i think long-term we will have a change in spending patterns? probably not. in the short term to we have a blip in consumers pulling their horns? maybe. emma: this conference is about the future of the consumer. what opportunity does that provide for cowen? jeffrey: there are massive changes in the consumer industry, changing consumer that aret, new brands helping consumers to be better at what they do by immersing them in experiences. i think digitally native communities are matching buyers to sellers in ways we have not

seen before. the emergence of health and wellness as a category. that is changing supply chains and changing things about how people deliver products and services to the consumer, it was a much smarter consumer than ever before. what we are here to talk about today is that disruption. there will be winners and losers. emma: do you see in particular losers? jeffrey: that is the job of our research team to pick the winners and losers. most americans invest in the market today through passive product but they are missing opportunities to make significant returns by picking winners and losers. there are a number of us in the industry at cowen who do that for a living well. it is about being able to identify those trends and helping our professional investors to make better and more informed investments. emma: you talk about disruption

and one of the big disruptors is over. -- is uber. on talk about the uberficati of consumer businesses. you see a big change coming in the american workforce? jeffrey: it is evolving. what i like about this group of consumer companies is the training space in time. humans are amazing. before email, what did we do? we had to take time to write letters and go to the post office. then email comes along and we are more efficient at responding. and then snap comes along and a short system comes along and we're even more efficient. we create space to do other things. ation orook at uberfic the sharing economy, is geared towards creating more time for consumers to enjoy themselves. -- i feele the air is

like the efficiency element associated with shopping and consumer experience is helping consumers in ways we cannot imagine. we can ever imagine a ridesharing app five or seven years ago. it is creating opportunity for us to do other things with our dollars and our time and that is part of the learning that will go on today. emma: let's talk about cowen's business. the investment banking results -- isnd what is driving the consumer a part of that? jeffrey: we are focused on health and wellness. we do a lot of health care and the consumer experience. we are all about the emerging economy and focusing on companies we think we can be significant disruptors in the private market in public market. there is a host of companies doing things across that spectrum. emma: specific ones you want to tell us about? jeffrey: i cannot talk about

specific companies, but as you love the areas we've chosen to engage in around health care, consumer, tech, payments, all of these amazing places where the u.s. consumer and the economy is going, that is where we want to be and that is where we focus our energy and it is reflected in our numbers as you lean in and put resources towards exposing ourselves to that growth. has: one deal cowen reported to be working on is helping the chinese owner of the dating app grinder south itself. -- sell itself. are you concerned about growing consumer protectionism? how will that impact more tech enabled consumer businesses? jeffrey: i think rejectionism is at the forefront of everybody's mind. yesterday you saw mark zuckerberg talk about regulate me, i need guidance on what is

acceptable. consumers are wise do it. three or four years ago they were less concerned. ,ow everybody is concerned given privacy breaches and their use of euro data. this is an area of street -- the use of your own data. the government is concerned about it. anything related to china at this moment is off-limits until the geopolitical situation figures itself out between these countries. what you are seeing is a natural extension of that. emma: jeff solomon, thank you so much for joining us. ceo of cowen. back to you in the studio. david: thank you so much. coming up, the energy sector takes a silicon valley approach. that is coming up next in today's follow the lead. this is bloomberg.

♪

viviana: this is "bloomberg daybreak." coming up, wto director general. david: time for all of the lead. a deep debt -- time for follow the lead. we are focusing on different areas of the u.s. job market. today it is one of the sector seeing a reinvention of true technology. ceo steel sat down with vp from the bloomberg conference. she began by asking what he is looking for in future employees. >> we want a diverse workforce

and we want people to look like the places we work in around the world. that is not something the industry has been known for. we want people who are values-based. trump is massively important in the world. we want people to have a real values-based driver. we want people who are digitally savvy. it is either an opportunity or a threat. we see it as an opportunity. we want people with a combination of those attributes. next generation of workers, where you find them? bernard: we are for engineers, scientists, people with data analytic skills. i have a reverse mentor i work with -- a 26-year-old. he is a master in experimental physics from cambridge. we are looking for all sorts of different skills.

skills, machine learning, artificial intelligence. alix: reverse mentoring -- how does that help bps bottom line? bernard: these people are helping me upgrade my own skills and understand what the organization needs. we are tech. when we think tech we think google or amazon, but when i asked him what you stay at bp? one, because we have enormous amounts of data, and secondly the computing horsepower we have is extraordinary. alix: have you been able to notice a change in your business from dealing with a reverse mentor? bernard: it allows me to much better drive our agenda. we have a large agenda around transportation. digital is one aspect but it is also agility, which is about how we make our organization more

efficiency and it is around mindset. getting feedback from connor is a rally me -- is allowing me to drive digital better but also influencing other areas. alix: was your workforce look like in 50 years? bernard: we will still need many of the skills we have today. the new world of computer horsepower means problems that were unsolvable 20 years ago are solvable today. we just found one billion barrels of oil in the gulf of mexico and it was with an algorithm being run on her super -- being run on our supercomputer. that would've taken 1000 years to run on a computer just 10 years ago. the problem was unsolvable 20 years ago. the skills remain the same but it is how we use them. , if you're going to explore an area for 15 years, that is going to cost money.

how quickly can you find a return on invested capital for technology? bernard: technology is one of the most leveraging things we can do in terms of return. these barrels are incredibly valuable. they are there. we cannot see them. we cannot develop them. we are seeing this area has enormous returns, the same with agility, very little cost involved in some of the performance has been tremendous. alix: is it hard to find workers now? bernard: it is not. when you are in the u k or the u.s., we tend to think about the world through those lenses. we hire people in angola, we hire people in egypt. we are probably the most attractive employer in those countries. gave you earlier, a master in experimental physics from the university of cambridge. we are not having trouble

attracting talent but it is important we continue to transform the business to get clarity on what this industry does and work from that agenda. alix: in the u.s.? bernard: in the u.s. we can attract people. but we do adapt and involve. that is one of the reason we put our headquarters in denver. we think we will have a better time attracting people in denver, colorado. lisa: that was alix steel speaking with bernard looney. for more jobs in the energy sector, michael mckee joining us . it is interesting to me, we are hearing this from a lot of different sectors that it is all about technology but the technology is not going to replace the people. michael: that is true. the petroleum industry is doing huge contributor to the u.s.

economy. let's look at this graphic on the petroleum industry. 600,000 people work in petroleum. that does not include people in transmission. 308,000 in mining and extraction. .t is a very important industry according to the u.s. energy and employment report, 77% of oil companies say they had trouble hiring last year. 32% said it was extremely difficult and part of the problem is they cannot find the people. job theyl support the had the most trouble filling. one of the problems as everybody is going into alternative energy. take a look at this chart. people whomillion ,ere in the energy industry 242,000 are now in the solar industry. it is the most rapidly growing of the alternative energy industries.

hiring was down 3% last year because of the trump tariffs. in february he put tariffs on the solar industry. the wind industry coming up 3.5% growth. year.up 15% last that was the tesla model three. it brought a lot of people into the alternative auto space. then you look at the coal industry. they are losing jobs overall. jobs have barely risen. it has been a long-term secular decline. you can see the white line, how coal industry jobs have fallen. in the right-hand corner it has risen a little bit. the other lines tell the story. the blue line is coal exports. that is where the coal is going. all of those steel mills we are putting tariffs on.

the yellow line is coal use in the united states. it has calmed down as plant after plant has closed because ,hey see other fuels particularly natural gas and solar, as the fuels of the future. this comes from a report produced by the department of energy until the trump administration discontinued it. energy started putting it out. lisa: interesting to see how .hat breaks down bp says it is fine finding workers but some of the hardest jobs to fill are not in the tech sector but in the nuts and bolts of getting it done. michael: they have to pay more to get people. lisa: michael mckee of bloomberg, thank you so much. hey google, talk to walmart. you will soon be able to buy skim milk from walmart with the google home assistant.

this is bloomberg. ♪

lisa: here is what i'm watching. walmart is letting customers order groceries through google smart home. interesting to me. raises questions about who can do that on my google smart device. david: you have alexa. you can talk to alexa and order things from amazon. if europe walmart you say i'm at a disadvantage. lisa: will it be delivery? how much is walmart paying google for this feature? is it just groceries, is it other things? a lot of questions. david: and how it fits with walmart's approach to going and online shopping.

they have been aggressive and done a good job. lisa: there are theories saying there will not be websites. it will be accessible through other things, including voice operated technology. interesting to see this evolving . lisa: -- david: you raise a good point about your kids. whose voice? it.: you put a lock on david: coming up on bloomberg the open, mohamed el-erian, bloomberg opinion columnist. 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, equity markets kicking off q2 with enthusiasm. the s&p 500 closing in on record territory. stronger data out of china and the u.s. kicking doom and gloom out of the global bond market. the gloom and gloom entrenched in u.k. politics. parliament is to find a path toward brexit. 30 minutes away from the opening bell. futures fairly positive. up not even .1%. yesterday yields up, yesterday yields lower. weaker, a touch sticking in a narrow trading range. euro-dollar around 1.12. we begin with our top story. widely held assumption the economy stabilized and the rally has further to go. >> our