the fed under fire. trump says u.s. stock market could be as much as 10,000 points higher if it was not for the fomc. j.p. morgan shares jumped the most since 2016. wells fargo tumbles. goldman sachs and citigroup report today. one of the biggest comebacks in sports history. tiger woods pulls off a stunning turnaround. welcome to "surveillance."

let's check in on the markets. we saw the s&p 500 blow through 500. third week of gains for u.s. stocks. are taking aties pause after three days of gains. a little bit of pauls and risk assets. we did see yields jump in europe. the bones jumping into positive territory. we are well above 250 on the 256 handle. what a rally we saw in oil. six weeks of gains for the new ur r, taking a little -- fou wti. coming up, we will speak to every piece. that interview is this afternoon on bloomberg market. here is going with the roger. >> tiger woods pulling off a

remarkable comeback winning his 15th major title more than a decade after his previous one. woods playing his fifth green jacket coming back from scandalous injury. that is according to marketing analysis. other news, the prime minister continuing talks, this as they work towards and way -- a way to end talks over brexit. chancellor philip hammond is reiterating the prime minister has no plans to stand aside until she has delivered brexit. >> as far as i know she doesn't have any intention of leaving until the deal is done. she is a person with a strong sense of duty. she has an obligation to the british people to deliver

brexit. she wants to make good. union taking a closer look at google's operations in ireland. resuming theiant tax obligation within the bloc. google and the european commission both declining comment. winter has come. the final season of the game of thrones has started with more than one billion people watching. the story of dragons, white drawing-- white walkers many viewers. premiering back in 2011 and has .vertaken fans are still waiting for the sixth and seventh novel in the series. global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries.

i am uma pemmaraju and this is bloomberg. -- at ease concerns about a slowdown in global growth. asian stocks near a high after the s&p 500 climbed within 1% of reaching an all-time high. meanwhile president trump has renewed his attack on the federal reserve tweaking the stock market could be as much as 10,000 points higher if it wasn't for the fomc. mario draghi said he is concerned about the relationship between the resident and the fed. he told reporters that he is "worried about central bank independence." , julianus now chillingworth. paul, let's start with you. we pulled some data out of china which gave a lift to risk

assets. where do you stand on global growth? paul: we are going from above trend growth last year to trend growth this year. the main problem with global growth is that investment is weak. that was a big drive for the slowdown last year. it has come from the uncertainty about trade. the imf said trade tension is the biggest threat. economists came to that conclusion at a far less expense. it is a slow down which is supposed to happen. nejra: julian, i want to pick up on the comments that president trump made. the view from 36,000, trump treating the stock would be 5000 to 10,000 points higher if it wasn't for the fed. this is showing the dow index. aat high either on the dow

relatively high on the s&p 500. it would take a lot more than a shift from the fed. julian: it would indeed. with an election coming up and this is the opening salvo campaign. he thinks knocking the fed is good for his midwestern constituents. what i would say in simple terms, consensus earnings for the s&p 500 for 2020, $180. that puts it on about 16 times. tois difficult to stretch it 17 to 18 times. think, it is aspirational more than achievable. nejra: what is your take on your global growth picture? what more do we need to see to give equity markets a lift? julian: as we go into this reporting season, people are not

that optimistic. i concur that we have seen global growth blossoming out in china. the u.s. growth is tending to trend around trend. it may be slightly weak. having seen a strong rally, to get stuck markets further on from here, we need an improvement in global growth coming in the second half of the year. that will drive through earnings. we are going to see much in terms of pickup and earnings unless we can see china trade deal and that comes without any tariffs. we need to see the stock market higher. nejra: on china, i know the point you were making, paul, that we were getting to trend growth. i have some people -- i had some people expressed concern that the import data was concerning because of the chinese consumer.

does it concern you? paul: not at this stage. when we have had tax changes in the past, or is some creative reporting -- there is some creating reporting. you book things happening earlier or later to avoid tax changes to get the benefit of tax changes. this may be a tax change related thing. we may be surprised by the numbers that come through in april. a lot of imports into china are not going to consumers. there is some more understandable weakness. global investment has been sluggish because of the uncertainty around trade. even with a trade deal, we are not going back to where we were. around. change trade companies are going to be more cautious about investing over the medium-term.

nejra: one thing i loved, julian, is that stocks are likely to do better. aspects that tend to -- prospects that tend to the gallant just take a long. julian: what we were referring to were non-cyclical names. also those companies that are close to the consumer that might make reasonably's, something you razoruy every day -- make blades, something you will buy every day of the week. nejra: staying with us for the hour. plenty coming up including our interview with philip hammond at the imf world spring meeting. don't meet -- don't miss that meeting -- this is bloomberg. ♪

nejra: economics, finance, politics, this is "bloomberg surveillance." now to the banking consolidation story. olaf schulz saying bank mergers should be seen in a wider european context. lacqua atith francine the annual spring meetings of the world bank and imf in washington. europeere successful in so change the scenario. a common supervision for the relevant banks. we built a financial fund which is able to work with very big

banks all over europe. this is a situation which has changed. my view is we should look to europe as the european economy and the banking system and the financial industry. it is a big mistake just to reduce the bank and situation to one country. francine: can you assure the markets they will do everything to make sure that everything is stable? >> the most important question we are working on since the last economic crisis in europe is to .uild a stable banking sector we have made a lot of progress and we will do the next step. it is very good. i will have to do some businesses here. nejra: that was olaf schulz speaking with francine lacqua. from europe to the u.s., jpmorgan kicked off the earnings season friday with a clean beat. shares rallied 5% impelling the

s&p 500 to a six-month high. to join u.s. banks able the jpmorgan lead? dani: that beat set up a strong quarter for u.s. banks. robustimon credited consumer spending. the firm stood by its net income forecast. it was also wells fargo, dropped after the bank lowered its interest forecast. that is the banks biggest source of revenue. which way will the rest of wall street go question mark expectations are to the upside -- go? expectations are up. bloomberg intelligence expect the top line to decline. analysts say it is the strength

against mobile revenue trend, that is more just global revenue trend, that is more critical. risksl get updates to key as well as capital return plans. bank of america is out the following day. from bank of america, the trading numbers are going to be -- four bank of america, the trading numbers are going to be watched. bank of america outpacing other categories. nejra: still with us, paul donovan and julian chillingworth . julian, i know your views to stay invested with more of a defensive tilt and your portfolio. what is your view on holding u.s. banks? julian: we are underweight sector globally. the only banks we will contemplate our u.s. banks.

coco -- ok. julian: in the reporting round, the banking sector in the whole -- or on the whole will come in well. i would agree that bank of america is a wildcard. struggle.e banks may nejra: paul, what did you learned -- learn from jpmorgan and wells fargo? what is your take on the u.s. consumer? paul: one of the issues is the u.s. consumer has become less credit exposed over time. if we look at the credit to income ratio over debt, that has come down since the crisis. it is plateauing now. there is less information than

it used to be about credit availability. what happened in 2008 -- 2010 was a dominant it -- and dominic . the consumer is doing fine but i would not be looking to credit for leading to -- leading signal. showing the chart u.s. bank. julian, i know you said you're not interested in banks locally but the u.s. is one area that you would look to. can bank profit send the s&p to a record given we closed within 1% of that record on friday? julian: i think the answer is yes. nejra: a clear yes from julian. let me go back to the chart. at half a decade of negative interest rates. u.s. -- european banks trade versus the u.s.

would it not be an interesting proposition? >> there are a number of issues sector.he european that is prevalent in some of the southern european and eastern european banking sectors. to drivehe will consolidation in the banking sector, we will have to see how the deutsche bank comments go. as the finance minister said, that is what is required and it has been slow. the other final thing, we are faced with negative rates in the if they can see how they are going to get around that, so consequently it is quite different to know how

you're going to boost banks. nejra: not a big buyer. i want to show you this chart as well as the s&p 500 to show how far we have come. a discount to september price to ratio -- price-to-earnings ratio. we can go quite a lot further because of low inflation and low bond yields. can we go a lot further on this rally, paul? paul: i don't think so because the low inflation is something which starts to constrain profitability. we are seeing rising costs. the support from the economy comes from the consumer. the support for the consumer comes from tight labor markets. increases but there are wage increases coming through. either you get inflation or you get skewed margins. we are tacking toward profit

margins. i would argue that this environment is not one which necessarily pushes us to a dramatic increase in equities. it is a risk on environment. i'm not sure you play that through an equity position. nejra: are you overweight equities, julian? talk me through your equity strategy based on the chart. julian: we divide equities up risks so thatke is corporate bonds and the like. we look at pure equities. we are neutral on pure equity and we are underweight equity like risk. we have been taking a little money out of the overall equity portfolios. that is the way we will trend through the rest of the year. i agree that it is difficult to

see profit margins expanding in the current environment. there are a number of reasons wage pressure -- great conversation so far. lots more to come. we look at somebody biggest movers in today's session including north hydro. this is bloomberg. ♪

nejra: this is "bloomberg surveillance." . am nejra cehic in london what is moving on the markets today. annmarie hordern has more. : 4.5 in dollars to marketing unions -- units. this is a play on digital as well as expansion. norsk hydro also hiring, this is their brazilian unit, petitioning the court to lift the embargo on aluminum. norsk hydro outperformed the sector by 3% or 4%. nokia is down today. nejra: what you didn't hear was annmarie advisory on how to take my vacation. thank you. as the u.k. government and the

labour party are locked in talks, both sides say this is the only way to fix brexit. we will discuss that next. the pound up a little bit for the second day. looking at the equity market today. it is a quiet session after three days of gains, the stoxx 600 unchanged. this is bloomberg. ♪

nejra: economic, finance and politics, this is "bloomberg surveillance." i am nejra cehic. here's uma pemmaraju. >> fans of tiger woods still

celebrating one of the most remarkable comebacks in sports history. win that 15th big comes more than a decade since his last. are saying hes generated more than $20 million. in other news, donald trump claiming the stock market would be 5000 or 10,000 points higher if it weren't for the actions of the federal reserve. trump blamed his attack on the federal bank. several republicans indicating one of trump choices, herman cain, may not be able to win senate confirmation. there is no truth of spying from huawei. --s comes as the u.s. comes the white house saying the chinese company is a security

threat but the company's representatives are denying any wrongdoing. they have there had over our head is a tiny spy. verifiable.ve to be .> winter has arrived the final season of the game of thrones returning to the airwaves as anxious fans await. the story of dragons, white walkers and noble houses drawing fans across the globe. the popular series winning over 40 emmy awards. it is already way ahead of the on.s the series are based global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries.

i am uma pemmaraju and this is bloomberg. nejra: think you so much. philip hammond says theresa may has no intention of stepping down until a brexit deal is done pt spoke with francine lacqua at the annual spring meetings in washington dc -- in washington, d.c. she asked by -- she started by if that would clinch a deal with the labour party? >> we have gone into these talks on the principle that we agree with the labour party. we need to leave the european union. beyond that we haven't set out red lines. we are prepared to discuss anything they put on the table. this is one of their of the demands. it is not what we set out to deliver, but we are prepared to discuss these things. because they put it on the table doesn't mean we are going to do

it, but we are prepared to talk about it. francine: would you accept it? >> we are prepared to talk about it. francine: a lot of markets are wondering if theresa may will go? a theresaer to have may to say -- >> the prime minister has said she will leave what she has done the deal. she doesn't have any intention of leaving intel that deal is done. she is a -- leaving intel that deal is done. will want to make good on that obligation. francine: how damaging could elections within the conservative party be even after october 31. >> we've already got people jockeying for position to succeed her. that is one of those things.

in both major parties we've got ambitious people who are all the time looking at their relative position. that is a fact of life of politics. francine: would you serve under boris johnson? >> i will not speculate about who i would serve under. what i do believe strongly is starting the leadership process before we resolve the brexit question would not be helpful. it would look self-indulgent. the public back home expects us to be focus on delivering brexit. francine: how many questions do you have to feel from g20, central bankers and financial ministers on brexit question mark -- exit? think that the process we have gone through has made the likelihood of a no deal

of brexit much smaller. pricing onn markets the assumption that a no deal brexit has become a very small risk now. that is positive the guys i have believed we need to leave the european union with a deal and with a plan that allows us to protect our economy, protect richest jobs. -- protect british jobs. the way things have evolved is positive. we have to get this over the line because the downside of the extension is we have created a deal of uncertainty -- created a period of uncertainty. get the deal done and i am confident we will unleash a wall of money, a wall of the vestment just a wall of investment into the u.k.

nejra: that was philip hammond speaking with francine lacqua. still with us, paul donovan and julian chillingworth. you both had great headlines in your research. heard about the six-month extension. for you, paul, it was trick-or-treat. you, julian, it was groundhog day. question, the worst of both worlds? julian: you get a softer brexit but you don't get position in the you -- in the eu. you don't get a vote but you may end up paying money into the pot as the norwegians do without a say in how that money is spent. expect it will be negotiated, that doesn't look to be what people wanted when they voted for brexit.

i suspect if you voted against that equally you will want to stay in the full eu with proper thatrship, as opposed to three-quarter way out. nejra: providing some sort of solution, is that a silver lining? paul: certainty is a big step forward. the consumer in the u.k. is chugging along perfectly happily. the labor market is strong. we have that lack of investment. investment takes place but why is -- why as a chief executive you would make a decision today which will be impacted in six months time or nine months time? regardless of what happens, the u.k. will take european union

rules on trade because the union has been setting itself up as the global rule setter. nejra: interesting. the point you made about ceos and deloitte came up with a survey. this is a cfo survey about long-term exit concerns reaching an all-time high. they talked about confident risk appetite remaining muted. the finance leaders predicted a decline. placing a greater emphasis on cash can relation -- cash accum ulation. is this something you have observed as well? >> your point about consumer confidence, there are figures this morning that show the labor .ndustry is seeing some pickup

consumers feeling better. i think confidence is lower among business. this is leaders tell us they have held back on investing in new projects and that is something that they will still not do. aboutis a lot of concern how long this process is going to take, whether we reach a conclusion in october. consequently, is it kicking that can down the road much further? how that impact investment and longer-term growth of those companies? one thing we do is attract business investment, not only from our companies within but externally as well. we are not seeing that external investment coming into the u.k. which will improve profitability on a long-term basis.

nejra: not sure we'll get an extension by october 31. on the six-month one, we got the data showing that prices for london homes rebounded in april. some commentary is right. sellers are hoping the extension of the brexit process will boost .he market in coming months . >> the numbers are not going down. london has reported 1.5 thousand people are moving job. mean you move your entire family to frankfurt. sure we got this mass exit is coming. what we have is supply and demand balance. the properties that foreigners by suddenly increased and supply

, particularly from -- increased in supply, particularly from asia. you've got a huge disparity of prices which is suggestive of a different problem than brexit. nejra: paul says i should be looking at the brexit headlines. paul donovan and julian chillingworth stay with us for the hour. europe emerges as a chief .oncern all eyes are on the ecb's next move. we will discuss. this is bloomberg. ♪

nejra: this is "bloomberg surveillance." i am there a change in london. here is uma pemmaraju in new york. >> here's what is happening, jack ma is encouraging tech workers to embrace the industry's extremes. this devise a growing backlash over alibaba's remarks. foul saying that employees are already dying from the stress from the pressures of this kind of work schedule. in other news, elon musk is and it isforecast reminiscent of the one that landed him before a federal judge earlier this month. a chief executive writing that tesla will make more than 500,000 cars which comes as his lawyers are just -- are negotiating over an agreement that put controls on the billionaire's tweets. google insists they are paying

$4.5 billion to buy a marketing unit. this as the french advertising group is expanding in the u.s. the company is focusing more on data analytics as giants rely less on tv commercials and billboards. -- uncertainty over brexit knocks this is confidence. this is according to a survey by morgan mckinley. it is warning that the delay to brexit will only make the stress on businesses and unable to make plans for the future. that is the bloomberg business report -- flash. back to you. europe, one ofto the key takeaways from the imf meeting was europe is the sixth man of the global economy. the company forecast to the slowest pace since the financial crisis.

the ecb will have to act carefully in the coming months. >> still i think we have to be very prudent because growth will be moderate, inflation is not yet where we would like it to be. we need to maintain monetary policy. nejra: still with us, paul donovan and julian chillingworth. paul, are we getting too much of an easy have it -- if you have it? it?asy have japan.t used to just be now it is china and europe. europe's not doing that badly on a per person basis. it has been doing as well as the u.s. has been doing.

i don't think it is a sick economy. i think there are problems within europe. when you talk about europe, you "excepttalk about the certain's justy sentence. has had a second round effect on global trade and that europe does forcibly. america doesn't export much. europe has been hit by the slowdown in investment. nejra: julian, when we were talking about european banks, you hit it that you don't have a lot of faith in tearing. do you have much faith in the tools that ecb has to lift european growth and inflation? reality.re limited in is i cannot see

how you are going to implement it on a flexible basis. it will be very difficult to put into practice. europe is concerned, every agree with composition starts with "apart from italy." we got to face up that we are going to see slower and lower growth. states, we united are starting to see slow growth over time. we have to look for those faster growing economies as germany has done by trending export more into asia. the trade dispute between the states and china has been very unhealthy for germany and german exports into asia. that is not helped sentiment. one of the issues about investing in europe is sentiment

is quite low. you need a few catalysts. one is probably a trade deal with china. the second one will be something around the banks which i struggle to see happening in the short-term. nejra: what does it mean for how you invest in europe? for quite a few people, you mustn't look at that absolute unit level. the curves are steeper in europe. there is value to be found in european bond markets. since, --equities sens, we are looking toward companies. -- we have been avoiding financials and in

particular banks, and that is something we will continue to do. clients buying german bones -- bunds around the zero interest rate. by negative is not an attractive prospect for us. nejra: i've got this chart about pboc support, whether it will stay amid the credit upswing. this takes us back to the numbers we got on friday. does this chart tell you about anything where europe goes from here? paul: it doesn't sell to the chinese. it is reexported somewhere else. what we have to do is not looked -- it is wrong to say china slowdown has slowed european exports. that is not a correct conclusion to draw because so much passes through china and goes to the rest of the world. we look at where the goods in

up, china is and growing a bit. that does help the european economy bit but essentially for small of an to economy to matter because it doesn't consume that much itself. it is a transition to longer, more complicated supply chains. the global economy, not much. nejra: paul donovan and julian chillingworth stay with us. up next, is elon musk in hot water again? the ceo tweets and new production forecasts but his lawyers already in talks over a similar post from two months ago. this is bloomberg.

nejra: in tech news, elon musk is at it again. he has posted another forecast, reminiscent that landed him before he federal judge earlier this month. tesla will make more than 500,000 cars in the next 12 months. still with us, paul donovan and julian chillingworth. there's a million angles we could take here but a

semiconductor is one thing you are focusing on. paul: it is the broader picture we are seeing technology being used more efficiently in the economy. we are cutting down on the number of devices we use. i don't have a work computer and a home computer. i have one computer. we are becoming more efficient and how we use technology. nejra: julian? julian: what has been key is looking at the numbers coming out of so many industries this order. -- this quarter. will we see that recovery coming through? statements are going to be very key as for the movement for next year. nejra: you were talking, fangs are heterogeneous. you got to post them company by company. julian: we're looking at them on an individual basis. you've got companies offering

shopping. two companies offering film. they are separated out. nejra: great to have you with us today, both of you. paul donovan and julian chillingworth, thank you so much. coming up, we will speak to herbert diess. that interview this afternoon on bloomberg markets. this is bloomberg. ♪ moving is hard.

no kidding. but moving your internet and tv? that's easy. easy?! easy? easy. because now xfinity lets you transfer your service online in just about a minute with a few simple steps. really? really. that was easy. yup. plus, with two-hour appointment windows, it's all on your schedule. awesome. now all you have to do is move...that thing.

[ sigh ] introducing an easier way to move with xfinity. it's just another way we're working to make your life simple, easy, awesome. go to xfinity.com/moving to get started. tom: this morning, should she stay or should she go?

the chancellor of exeter says -- the chancellor of the exchequer says stay. it is a 400 page document. it will drop this week. the presidency's total exoneration. -- tiger willt never win again, and the dragons want to kill jon snow. spoiler alert. good morning. this is "bloomberg surveillance. " yes, i stayed up to watch "game of thrones." tom keene in new york, guy johnson in london. it is unusual whether for our east coast audience. we have a tornado alert basically from north of new york city all the way down the eastern seaboard to delaware, philadelphia getting a lot right now. as serious matter. guy: i would imagine it would be. i do not think i've ever had to

experience a tornado alert. keep your heads down, i guess, is the advice. is this the same weather that affected the masters? is that why everything finished early and i got to go to bed on time? tom: i totally agree. i am not going to save is same weather pattern, but with tornadoes, where we usually see them out in the midwest and south a few days ago. let's get to our briefing. --: here is happening theresa may's government and the opposition later -- labour party agree on one thing, saying that there talks are the best chance in finding a brexit solution. labour is pushing for benefits and a customs deal with the e.u. in other news, another sign that the u.s. and china are getting closer to a trade agreement. steven mnuchin saying that the

u.s. is open to facing penalties if it does not live up to its commitment to the deal, saying each side would establish an enforcement office. the president is slamming the federal reserve again, saying 5000stock market would be " points to 10,000 points higher if it had not been for the fed's actions," tweeting that quantitative tightening is a disaster and the fed should have done the opposite. remarkableger woods' comeback is complete, winning his first major title in more than a decade, capturing the masters by one shot. this comes after a high-profile six scandal and multiple injuries almost ended his career. his victory a big loss for sports books -- fanduel lost $2 million in paying off those who bet on woods. global news 24 hours a day on

air, and on @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm uma pemmaraju. this is bloomberg. tom: thank you. let me do a data check. futures flat. now 1.1317.her, i am struggling. that bull market continues in the vix. 13.41. higherre is a lift -- yields and lower note prices in 0.06,y, the tenure up to a green sheet for mr. draghi. guy: mr. draghi stepping into interesting territory. overnight was what we -- what we saw was not much happening in europe. the equity market absolutely

flat. you are looking at a similar thing when it comes to fair values in the united states. elsewhere, watching the pound, recently flat. volatility has collapsed. volatility collapsing and -- in the pound story. and we're waiting for goldman and citi. dow on the bloomberg, the right now, to get back to toober and the collapse down december, what a recovery it has been. not to record highs, but we are beginning to see, through the weeks, a little index here, a little index there. bull a great, unloved market. --ht now, let's get started

stephen gallo with us. with us,n schenker usually in new york. i want to get to the politics in a minute, but let's do a mop up of the imf and the idea of the move forward in the imf and other multilateral institutions. how multilateral can we be in the future, or is there a permanence to donald trump -- is there a permanence to donald trump's approach to trade? martin: there is a certain level of permanence. if you take the approach that donald trump will not be reelected, the next president of the united states will probably be preoccupied in his or her first four years undoing the america first trade stance that donald trump is pursuing. tom: within the foreign exchange

market, are they pricing in the idea of the present state being a four or eight-year one-off, or is there a permanency seen through foreign-exchange of a new non-multilateral world? stephen: i think that is right. you hit the nail on the head. there is a global rebalancing dynamic. we have been talking about this for years, maybe even decades. before trump even became close to the white house. but when you look at things like u.s.'s balance of payments, there could be evidence of reassuring -- re-shoring. backdrop, itobal is similar to the situation in 1998, 1999. a strong u.s. economy, lots of global risk. you are seeing relatively similar, though not to the same degree, near inversions or inversions in the u.s. treasury curve, and the fed is turning more dovish but mainly to respond to increased local risk.

but on the trade side, the disruption to supply chains, the america first narrative, and what i am seeing in the u.s.'s balance of payments and what i am seeing negative and other of payments,lance notably in the euro zone, it bodes well for the dollar. guy: the e.u. voted to start trade-offs with the united states. france is not on board. we had the japan talk kicking off as well. do we get the same tactics employed by the white house in each of these cases, can we take china as the benchmark? martin: primarily what donald trump wants is to get this china deal done. there are indications they are getting closer. the devil is in the details. innate hostility towards the year -- towards the europeans from this white house, which is odd in terms that they are close to us in terms of

political alliance. i think you will play tough with the europeans. tom: martin schenker, looking like that guy in "game of thrones" up with the night watch on the wall this morning. stephen gallo with us of bmo capital markets. coming up, really going to drive the word the conversation, the wonderful guest we had friday in ofhington, ian bremmer eurasia group on television and then radio. this is bloomberg. ♪ bloomberg. ♪

we have to be very prudent, because growth will be moderate.

inflation is not yet where we like it to be. the question is monetary policy -- we need to maintain. guy: that was the italian central bank governor, saying the ecb will have to act carefully. hisident trump renewing attack on the federal reserve over the weekend, tweeting that the stock market could be at least 10,000 points higher if it were not for the fomc. stephen gallo and martin schenker still with us. the president made these comments, and that came hot on the heels of one of the other , marioentral bankers draghi, voicing his concern about the independence of does ? martin: he absolutely has a point. but donald trump is setting up the fed to be the fall guy if the markets turn soft as he

approaches 2020 reelection. most economists would agree that that has been relatively sanguine for markets in general, and for him to say it is an impediment to growth in equities is strange, but this is what donald trump does. he sets up villains to explain why things are not going his way. makes a point -- marty makes a point in that the fed is being set up as a villain. the market has absorbed with the president has said about the fed. the fed has clearly paused. it has delivered a lot of easing. you kind of wonder whether or not the president will get any more out of this narrative. do you think the market is underestimating the potential for this to move in a further dovish direction? stephen: i would not relet the fed the more dovish. we have been paring back our

views on fed tightening and rate hikes -- guy: based on the president or based on the economy? stephen: based on the global picture and some of the stuff coming out of the u.s. but if the fed does take a very dovish pivot or a further dovish pivot this year, it is public going to be more so because of global risk. i think it is a little ironic to see draghi criticizing -- he was the guy who came forward and 2012 and said the euro is irreversible, but the euro is a political decision. central bankers all the time take criticism from politicians, they gave criticism. there is a lot more attention now, because it is donald trump who is making the criticism as opposed to barack obama or someone who could have been in trump's place if he did not win in 2016. this happens all the time. it is normal. we need to relax a little bit. tom: marty schenker, what is

wrong with a little dissent in the fed? alan greenspan started the idea of a unanimous fed. what is wrong with dissent? martin: you can make the argument that there is nothing wrong with dissent at the fed. ben bernanke also extolled the virtue of consensusbuilding within the fed. sent underlittle dis his leadership. but the appointments or potential apartment of stephen moore to the fed would create real tension in those deliberations, and some argue that is worth having that discussion on whether or not rates are too high. tom: let me bring up a chart here -- i am watching a tornado on the east coast weather watch. team coverage with "bloomberg surveillance." but stephen gallo, here is the

dollar, range bound back for years -- four years on the bloomberg dollar index. how does mr. trump interpret that? it is not like it is a runaway strong dollar. stephen: it is not a runaway strong dollar. you have a wider fiscal deficit in the u.s., although i think this is, if anything, a longer-term concern, the fact that the u.s. has a widening fiscal deficit. if anything, it is short-term, dollar supportive, because the other jurisdictions are not doing enough fiscal stimulus. the fiscal multiplier is lower. that is good for the growth and amec in the u.s., the wider fiscal deficit. a role to play in slowing the move in the dollar down, but you are not ofting this risk on impulse dollar weakness, where you see strong demand for other non-dollar currencies.

i do not think that will end anytime soon. script.l rip up the guy johnson, you can continue this with anna edwards. francine and i said hello to mr. draghi, the usual ballet, and in the middle of it all, almost quiet, was the governor of the bank of england. where is mr. carney's place within british financial society? question,s this a you're asking me -- tom: yeah. i am asking you where governor carney sits in right now in the great dialogue of the united kingdom? stephen: i think his comments about no deal brexit last week were interesting. he switched his tone a little bit. maybe he wants that knighthood, wants to guarantee that knighthood. as far as the economy is

concerned, he is like the rest of us. slave to the is a outcome of brexit, a slave to whatever the future relationship will be between the u.k. and the european union. really difficult question -- guy: to be honest, once that is negotiated, it is going to be his successor's problem. stephen gallo of bmo capital and martin schenker staying with us. we will talk about the banks -- be up. and citi will this is bloomberg. ♪

uma: this is "bloomberg surveillance." let's get the bloomberg business flash. french advertising group publicist is trying to deepen its expertise and expand in the u.s., agreeing to buy alliance data systems' epsilon marketing unit. it is the biggest takeover ever by publicis. meanwhile, according to the ""wall street journal," a deal could be announced today that would offer a 22% premium to advanced disposals closing price.

the iphone will go into mass production in india this year, according to foxconn. it is a shift for the company. foxconn has long concentrated iphone production in china. india has become the fastest growing smartphone market in the world. tom: thanks so much. stephen gallo with us of bmo capital markets and martin schenker in london with guy johnson as well. it will drop -- a 400 page mueller report. it will be redacted. redacted is all the black box, right -- black marks, right? actually be will color-coded based on the reason for the reactions -- redactions. tom: ok. it will look like a froot loops or whatever. do you expect a lot of these color-coded reactions? -- redactions? martin: yes.

barr has pretty much so that will be the case. but he also said that there portionssignificant that newsrooms across america will be going through full speed as soon as the report hits. we will get it before wednesday, because that is when barr said it would be released. tom: it came up at least three times this weekend. is barr in the pocket of the president? i do not perceive that, but i could be wrong. gauge where this attorney general is versus the president and with justice and the american people? martin: i agree with you that everybody come all the dissident democrats jumped all over barr for his four page summary because it did not a narrative that they wanted. we have to wait to see what the report says and how much

information is divulged. then barr will go on the hill and defend his actions. he strikes me as a conservative republican, and whether he is in trump camp or not, he is somebody who really cares considerably about the law and his place in history. i think it is too early to judge just what kind of attorney general he is. guy: the market, when the first elements of the mueller report moved on.- it just is that going to stay the same? is this a market moving event? stephen: i think it is more of a beltway event. the market is much more focused on global trade issues and the fact that there seems to be, already, a path towards a u.s.- e.u. trade war if and when

something gets done on china. i am skeptical this ends with any kind of agreement within the next few years or months -- weeks or months. i think it goes right to the 2020 elections. you shouldmp wins, be able to tie what happened with the mueller report theoretically -- andhen: if you are brussels beijing, you're trying as much as you can to play a waiting game. you're trying to inject a little bit of stimulus where you can. china is constrained in that regard because it has a debt problem. it is, in some ways, pushing on a string if it stimulates aggressively. there has been a lot made of this china stimulus in the market amongst pundits over the last few weeks. i do not see much of it. i do not think it is large compared to what we saw in 2008

or 2009 at all. so you are trying to wait it out. risk for them is what if it never ends? trump has a trade policy. he wants to bring manufacturing back home. it is the long game. tom: stephen gallo, thank you. and marty schenker in london this week. marketup, the equity story. the bull market. and the earnings season in general. we look at the greek letters in the market. this is bloomberg. ♪

guy: guy johnson in london, tom keene in new york. he is on tornado watch. francine lacqua has a well-deserved day off. let's get a bloomberg first word

news update. uma: thank you. pete buttigieg is making it official, the mayor announcing he is running for the democratic nomination for president. he is an underdog but has seen an uptick of support. he is 37-year-old, gay, and speaks seven linkages. he also spent four years and the naval reserve. president opening the door for a third summit with kim jong-un. kim says he is willing to meet if the u.s. offers acceptable terms for a nuclear agreement by the end of the year. --sident micron france is waiting for macron to set out conclusions following a series of debates with citizens, those discussions designed to take the heat out of the yellow vests protests.

thousands of protesters turned out again for a 22nd consecutive weekend. jack ma again urging tech workers to embrace the extreme overtime culture in the sector. day, endorsing a 12 hour a six days a week routine. social media backlash, dismissing those who expect a typical eight hour lifestyle. global news 24 hours a day on air, and on @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm uma pemmaraju. this is bloomberg. guy: thank you. prime hammond says minister theresa may has no intention of stepping down until a brexit deal is done. he spoke with francine lacqua at the annual spring meeting of the world bank and imf in washington. francine started by asking the chancellor if you would support a permanent customs union if

that were required to cling to deal with the labour party. >> we have gone into these talks on the principle that we agree with the labour party that we need to leave the. in union, need to end freedom of movement, but beyond that, we have not set out red lines. we are prepared to discuss anything they put on the table. we know this is one of their public man's, a customs union. it is not what we set out to deliver, but we are prepared to discuss all of these things with mpa just because they put it on the table does not mean we will accept it or will do it, but we are prepared to talk about it. francine: personally, would you accept it? >> i am a member of the government. it is about the government's position. francine: a lot of markets are wondering whether theresa may will go. is it better to have a theresa may that will stay beyond the extension now that you have at october 31? >> the prime minister has said she will leave once she has done

the deal and taken us out of the european union, but as far as i know, she does not have any intention of leaving until that deal is done. she is a person with a strong sense of duty. an obligation to deliver brexit. damage incurred elections within the conservative party b, even after october 31? >> we already have people jockeying to succeed her. that is just one of those things. in both major parties, we have ambitious people who are, all the time, looking at their royalty of position. francine: would you serve under boris johnson? >> i will not speculate over who i would or would not serve under, what i would or would not do in the future. what i believe strongly is

starting the leadership process before we have resolved the brexit question would not be helpful. it would look self-indulgent. the public in the u.k. exorcist to be focused 100% on delivering brexit. francine: how many questions did you have to field from g20, central bankers, and finance ministers on brexit? do they believe an extension means brexit gets watered down? >> i think multiple think -- and i agree with them -- that the process we have gone through over the last month has made the likelihood of a new deal brexit much smaller. marketswe have seen tightening on the assumption that a no deal brexit has become a small risk now. that is positive, because i always believe that i've always believed we need to leave the european union with a deal and with a plan that allows us to protect our economy, protect

british jobs. have evolved is positive for us, but now we have to get this over the line. the downside of the extension is that we have created a longer period of potential uncertainty. it is clear that the only way we can get our economy powering forward again is to put this uncertainty behind us, get the deal done, and am confident we will increase a wall of money and investment into the u.k. guy: chancellor hammond speaking with francine lacqua. the u.k. parliament is in recess easter,xt week, after with talks between the parties still ongoing. apparently, there is the possibility of breaking this deadlock. we will see. edmund shing of bmp pair about -- b.n.p. paribas joins us now.

in the pound collapsing. do you buy that at this point in time? week, one month, six month. vol looks more attractive, but as we were discussing before, this become self-fulfilling. -- being associated and long vol keeps cable euro-dollar in range. it is back to things like brexit and global trade tensions. events ormultipronged things that can lead to multipronged outcomes that will break the ranges. you favor the, dollar ultimately. there are pockets where the dollar may not do as well in the e.m. space, but not so much g10. if the global growth theme looks

like it is accelerating, it means the fed and start hiking rates again. if they are not, you do not want to own anything else besides the dollar anyway. edmund, good morning. you like u.k. cyclicals. why? edmund: because they are under owned if you want to find the most hated portion of the developed equity market anywhere in the world, it is the u.k. been running away from u.k. equities on the basis of we have no what is going on, so we will not even try to understand. we have given up and will go somewhere else. that is what has happened in the last year or so, which makes u.s. -- u.k. assets valuable generally. tom: let's do equities in the next block mubarak now, let's keep going with what you have, which is united kingdom multinationals and equities.

how much cheaper are they right now? give me a metric of this deal that is u.k. larger companies? edmund: within the larger companies, you have less valuation, but at least 10% versus the long run average. it gives you a 10% upside on long-term evaluation alone. but if we do see some resolution of this impasse, finally, then as chancellor hammond has said, we may see a few switches of investment. investment has been lacking in the u.k. that would put a boost on the cyclical sectors, which have been under owned. tom: what do bnp economists say? is it a goods producing sector, service sector, soccer teams? edmund: it is everything. the problem is every type of investment has been on hold, certainly within the services

sector. if you look at financial services as the obvious example, companies are ready to send people fleeing overseas. were to get some resolution that helps the service sector more than expected, maybe a lot of those companies would stay the course, not send people overseas, and reinvest in services within the u.k. guy: what would that do to the pound? environment, vol has collapsed, people are not hedging risks for the next six months. you get any hint of an upside, the market is not position for that kind of big move. stephen: i think what my colleague is talking about is talking about buying things now, regardless of what happens with brexit, regardless of what happens with the euro zone growth picture. but i think you would hedge most currency risk anyway if you wanted to invest anywhere in europe now.

i am not going to disagree with anything you have set on u.k. corporate's, but as far as the euro is concerned, we sit here and think brexit is a mess? we have countries in the eurozone that have virtually no nominal exchange rate flexibility, no nominal gdp growth. the eurozone fuels imbalances because it is too weak for the german economy. increasingly it looks like e.u. elections will make it more unwieldy to govern the euro zone. risk, ifhe currency you are a non-european investor, it gets hedged now. tom: stephen gallo and edmund shing. i want time on the equity markets. coming up later today, i thought about it in the imf meetings. imflipsky, the former

managing director and first deputy managing director, in the 3:00 hour. this is bloomberg. ♪

tom: "bloomberg surveillance." good morning. guy johnson in fort francine in london. i am tom keene in new york. great time in washington and an international audience, other people who came up, watching. it was really gratifying to hear from them about what we are trying to do with conversation. right now, we will do the conversation guy johnson had his had december 26.

he piled into the equity market and take advantage of the great bull market. edmund shing of bnp paribas and stephen gallo of the amount -- of bmo capital. you write a hyper detailed note. how do you write a note on the greeks for pros who have missed the great bull recovery? edmund: it is a little deceptive. it is a great bull market recovery -- except if you were long vol. when i have conversations with investors, all institutional investors i spoke to were very cautious still. on the one hand, you may say we have had this great bull recovery since the end of last year. on the other hand, i would say that is all very well, but investors have not loaded up at all. have continued more out of equities then into

equities. that tells me this is somewhat fragile and that people have not participated. i would say stay long or go longer, but also take advantage of the low volatility levels in markets to do hedging. put your hedge in long positions now. tom: where is normal vix? like eight weeks or 10 weeks ago, there was an idea of a new reset on vix. then all of a sudden we have come down in the calmness of the market to a lower number. are we still on the same vix parameters or have you adjusted your set on that? edmund: generally we are pretty much in the same volatility regime. the overriding driver remains liquidity more than anything else. we know from central banks, from what the fed and even the ecb have said, we know that

liquidity will remain somewhat plentiful. the fact that liquidity is plentiful and, until that changes -- because you are right. at this point in the economic cycle, i would normally say, with a positive output gap, structured volatility should rise. however, while the fed continues to put on its liquidity act and end quantitative tightening, that will be delayed. would equity markets be significantly higher if the fed had done its job properly? [laughter] edmund: what do you mean? guy: i am just quoting the president. he wants the fed to do a different job from the one it is doing now. i am curious as to how the relationship works as to how the market sees this debate? edmund: i think president trump, one and a bit years out from an

election, and therefore starting his campaign now, and wanting to make sure there is not a recession between now and then to keep his chances as high as possible is not necessarily the foremost person i would consult. they should bank, have raised earlier when they had the chance, when the economy was strong. ok, they did not do it. but to criticize the fed for that now is pushing it far. they have done an ok job. the question of independence is there, but for now, they remain independent. let's see how the fed chairs are reshuffled and how the president is going to influence that with his nominations. but for now, they have not done a bad job at all. i do not think the equity it would have been higher in another environment. guy: what would it take money flowing the other way across the atlantic coming to european equities? as you see the flow story

developing, what would it take to get the story moving in the exact opposite way? european equities have seen significant outflows. some of that has gone into the u.s., some elsewhere. stephen: you are right. the liability side on the eurozone's balance of payments is appalling. it is hemorrhaging portfolio investment and fdi. the is a product of political picture. two things would need to have -- the ecb doubles down and buys everything. i am talking houses, everything. initially, the balance sheet expansion and the run-up to it would get global equities into european assets. the second thing would be some type of strong fiscal policy impulse, a coordinated effort, to do what trump has done in the

united states -- spend money. because money supply growth and nominal gpd growth will benefit from fiscal stimulus preview will get that one possibly in a bit more small way, but not necessarily enough to significantly turn the tides. shing and stephen gallo are staying with us. coming up, we will hear from herbert diess. this is bloomberg. ♪

uma: this is "bloomberg surveillance." i'm uma pemmaraju. american airlines is confident that the -- is not confident the max will be flyable anytime soon. it is increasing daily cancellations. boeing is working on a software fix following a second failed crash involving that specific model. volkswagen has unveiled an

electric suv to challenge tesla's model x. covered in andts artificial leather madef from apple juice waste. yuan musk has already been warned about his twitter use. now, he is posting another production forecast like the one that got him in trouble in the first place, writing that the company will build over a half million cars within the next year. that is the bloomberg business flash. guy: thank you. the pboc releasing a statement saying it will maintain a prudent monetary policy and exchange rates will be stable overall. still with us, edmund shing of bnp paribas and stephen gallo of bmo. anything new in there?

it is under the shadow of what is happening with the trade talks, but it is hard to take anything away in terms of a policy story with what the pboc has put out this morning. stephen: no. and on the fiscal side, if you look at the military -- cumulative increase, it is miniscule. the idea that there will be this chinese stimulus that causes a insive v-shaped recovery asia or the global economy is false. overall, three things contribute to an uncertainty or somewhat bearish stance on china. one is the trade tension. the increasing dominance in state control. that creates uncertainty. the other is deleveraging and the financial stability risk. they were in a prolonged period of a deleveraging campaign prior

to the start of the trade wars. that raises questions of how much stimulus they can add. so overall, uncertain. the edmund shing, is chinese stock market a "real stock market?" [laughter] edmund: no. i think it is fair to say. sector ine banking particular is far too manipulated by government policy, because it is an arm of government policy, to some extent. when i look at the chinese stock market, i like to look at asia and local shares. if you look at the a-share index, you have a higher proportion of true private sector. that is where i want to put my money. within china, put my money in the new, growing parts of the economy, not the old parts. tom: edmund shing of bnp

paribas, thank you so much, and stephen gallo of bmo capital markets. coming up, he named his cat "wto." ian bremmer joins us. we are counting to zero, g0, g5, g7 -- does anyone care? let's go to new york. cover of thend the "new york post." and i am on strict "game of thrones" spoiler alert. ♪

tom: this morning, should she stay or should she go? the chancellor of the exchequer

says stay, various others say no. page document that will drop this week. from westeros to king's landing, the president's "total exoneration." and yeah, it is a bear market, tiger will never win again, spoiler alert. this is "bloomberg surveillance ." i am tom keene. johnson.ndon, guy francine is off today. why does parliament go to a halt today, does parliament go home? guy: they all left and went home exit for those negotiating between the conservative party and labour party. those talks are ongoing. when those mp's get back tuesday, we will see progress. tom: it is odd to see british

newspapers do something else, not resident. u.s.another sign that the and china getting closer to a trade agreement. steve mnuchin saying the u.s. is open to facing penalties if he does not live up to its commitments in a deal, saying each side would establish an enforcement office to monitor compliance. and in other news, prime minister may and the opposition labour party agree on at least one thing. both are saying there talks represent the best chance of finding a brexit solution. labour has been pushing for a customs union with the e.u. some conservatives want to take the customs of union and then resign. president trump saying that quantitative

tightening was a disaster and the fed should have done the opposite. and severe weather blamed for the deaths of at least eight people in the southern u.s. deadly storms and tornadoes hitting parts of texas, mississippi, louisiana, arkansas, and georgia. a suspected tornado hit shelby, ohio, injuring six people. meanwhile, new york city is under a tornado watch. won his tiger woods first major title in more than a decade, capturing the masters , the windne shot coming after six candles and multiple injuries -- after a sex scandal and multiple injuries almost ended his career. paying lost $2 million out to those who that on tiger

woods. global news 24 hours a day on air, and on @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. for our global audience, let me pick this up. i thought the "post" did a nice job. they have tiger in the front, he is back. then you flip over to the back to see if the mets lost, they did. .ice touch let's take a look at the momentous data check. really not much. the euro, 1.1312. edmund shing with a nice discussion. high yields in germany. guy: i think they would say he is back -- to win the masters with his back is impressive for tiger. let's look at where we are with the markets. year up flipping from red to green, a bit like tiger yesterday. red shirt on and then putting on the green jacket. cso 300 started strong, the trade headlines from steven mnuchin driving it, but that

faded. cable going nowhere. index.have the banks this ahead of goldman sachs and citi later. european banks on the front foot. we also have confirmation of an management isaste buying in advanced disposal services. 40 3000 employees at waste management, 6000 at advanced disposal. 43,000 employees at waste management, 6000 at advanced disposal. momentsre many good friday at the imf. >> we think it is important for people to find ways to address

the domestic problem while still sticking with international rules of the game, but those rules may have to be changed. we may need smarter rules. >> trade tensions with the u.s. is an external risk. our negotiating group is currently negotiating with u.s. authorities, and we hope we will be able to avoid further escalation of trade tensions. ofwe are doing the question minimal taxation and where we can find to national agreement to do something like this on the international level. this is a common idea of germany and the united states. >> the idea itself is absurd. we must cooperate. the values are so close, but in case, and with president trump you never know, we must be prepared. tom: a clash of civilizations at

the international monetary fund. you may have watched "game of thrones" -- king's landing, westeros is not part of the g0 world. ian bremmer is. it has been too long since we have enjoyed his interpretation of international relations. i want to go back to the theme of these meetings -- multilateral is there, multilateral is gone. is it your framework that we will never get it back, or can we get to some form of multilateral world post-trump? ian: you cannot get back to u.s. led global multilateral, but you are seeing china increasingly important in terms of building a series of hub and spoke relationships with countries around the world. you are seeing countries with challenges. and whether it is trump or get ridmp, you will not

of that idea. tom: i love that idea -- describe the hub and spoke. what example, china in italy. how do you interpret that? ian: xi jinping goes to italy. we tell the italians, john bolton says do not join the belt and road, the g-7 economy. the italians say great, you will invest. we say no. and they say you are deftly committed to trade. and we say actually we are about to put tariffs on airbus. of course they join. it is not that the u.s.-italy relationship is broken, it is just that, given the americans focusing more on what is happening at home in the united states, there is a lot of hedging going on, even with some of america's closest allies. , you're talking about a government predisposed

to support trump. but they are also predisposed to support italy first. and italy first means we look to who is writing the checks. , is is the united states the trump administration, going to be successful in factoring the unity of the european union? trade talks are about to start. the germans want nothing more than the car issue to go away. the french are worried about their agriculture. how important will this be? ian: it will be important. if you want to bring a back to the imf meetings, one of the most controversial things the imf did with its outlook is say we will avoid a recession. that requires a small ball to play out and none of the big risks to hit. a whole bunch of economists saying we think the fundamentals are ok. they are getting softer in a bunch of countries. but all of these risks will not hit. you mentioned one of the risks that is more likely to hit in my

view, which is once trump gets his deal with xi jinping in mar-a-lago or washington, the focus of the americans and the trump admission ration -- is the europeans. i do not believe, in the run-up hashe 2020 elections, trump an issue with adding more tariffs to the europeans, even if it makes the markets softer. tom: jamie dimon out with a message of the fraying of america. is that a good word? ian: i think it is. i do not think america is in decline. if you look at the strength of the dollar -- tom: you are not a gloom guy. ian: i am not. but i think capital -- jamie dimon and others -- have defended a lot. tom: this is really taking shots

-- ian: they are not morally qualified to do so. they are intellectually qualified to do so. in some way, i am not morally qualified to do so. in the sense that 10 years, 15 years ago, i am a political sayingst, where was i -- i am glad they are starting to make this statement. tom: dr. bremmer with us on television and radio. it just gets better, the conversation on bloomberg. we do that with john lipsky in the 3:00 hour. from london, from new york, this is bloomberg. ♪

tom: "bloomberg surveillance." at the tigerooking woods -- that big comeback. even i watched. to america and cover not georgia but washington. we do that with ian bremmer. kevin cirilli to join us in a moment. let me give you an open question. it is a field day for the democrats. in your study, they always went to the middle. do they have the mechanism now to move from a progressive/liberal voice to a middle voice to win? ian: with 18, back to the 19, candidates, they can go any direction. the reason why you got trump in part was because he had so many strong centrists among the

republicans, among 17 running, beating each other up, and that created space for ted cruz and donald trump, outsiders. on the democratic side, you have a lot of progressives, a lot of centrists, a fair number of true outsiders. that is good for the party, because they need to not have someone who is anointed top down, like hillary clinton was. but if you end up with someone like bernie sanders, the likelihood against trump would be a stronger one-on-one. tom: george will is that within you but if you will be with us in the coming weeks. the view on the democrats are the democrats party's 2016 achievement, the election of the current president, the guy from texas contemplates amending the constitution to "show the corporations are not people."

the senator from massachusetts, thoroughly trumpian proposal, made where pandering is perfected. iowa to ban foreigners from buying u.s. farmland, the party with its mosaic of factions to placate the let's go to kevin cirilli. how is the mosaic doing, how are the democrats doing with some form of serious message into june? may, in -- and kevin: the 18, 19 candidates all have the different message. that will be the competition in the summer of the democratic primary. you have senator sanders. the voters know what sanders stands for. you know what senator elizabeth warren stands for. the question becomes do you know what south bend mayor pete buttigieg stands for? yesterday, he tried to lay the

foundation of crafting a personal message and a policy one, the backdrop to his roll out a car factory plant. so you are seeing the beginnings of him trying to get beyond the personal narrative. that will be a test or some of these lesser-known candidates on the national stage. tom: let me ask you about your trench -- who is playing best in pennsylvania? go to scranton, pennsylvania, of course former vice president joe biden is going to say that he will be able to win that portion of the state. likewise, the western portion of the state. but someone like mayor peabody he is-- pete buttigieg, trying to get into the centrist lane and younger boat lane. he is someone who has said his policy position is a bit more to the middle, like a biden. that is where it gets interesting. with senator, harris -- senator

kamala harris, how will she play into that centrist point? there are some of the centrist lanes, the personality lanes, and the social democrat lanes. in: do any of the democrats the race at the moment go after trump voters? kevin: absolutely. the magic number is 70,000. 70,000 voters who voted for previous president obama and then switched over to president trump in states like pennsylvania and went into michigan, wisconsin, ohio, and florida. those battleground states, those centrist voters saying they will be able to win those white working-class votes. it is why -- and i do not want to make light of it -- why biden's response was so interesting and layered, that

joking response talking to union workers. that was a message not just to national media but to the type of voters you are talking about. guy: great stuff. thank you. bloomberg's chief washington correspondent kevin cirilli. ian bremmer will stay with us. coming up, fred cannon, kbw global director of research will be joining us. this is bloomberg. ♪

guy: guy johnson in london, tom keene on tornado watch in new york. francine lacqua has the day off. president trump are doing -- renewing the attack on the federal reserve, tweeting the stock market could be as much as 10,000 points higher if it were not for the fomc. cannon,us that is fred ian bremmer still with us. to quote mario draghi talking about central-bank independence. certainly worried about central-bank independence, especially in the most cheery -- thertant jurisdiction in world, referring to the united states. does united states have anything to be worried about? ian: not in the near term. the fact that the president is talking about undermining the

fed chief -- out of nothing people around him believe that. certainly the most recent aoating of stephen moore as fed board appointee makes you believe confidence is at a lower premium, and there is a desire to put it on the scale, but republicans have reacted as a consequence, this is not changing what we think near-term. guy: ok. fred, would u.s. faang stocks the higher if interest rates were lower? fred: likely they would be higher at this point in time, because that is the key thing for economic growth. what is happening with growth is that lifting -- it is not so much about where

the fed fund is with the bank stocks, it is the yield curve. and that is negative now. tom: is mr. trump supportive of american wall street, is he a friend of wall street? this came up in conversation. does he like, admire, enjoy, support wall street? fred: there is no clear sign he has any consistency on that or much else, to be honest. it is hard to say he is a consistent supporter of our street. he is a real estate developer by background. he has had an are not knauf -- he has had an on and off relationship. ian: less enforcement. there has been some rollback, but the fact that fines are lower in the pocket special interests are doing better under the trump administration, it is the opposite of the swat being drained. even though people on wall

street may not like trump personally, he is a boon in the short term perspective. fred: that is fair, certainly with deregulation, but i was looking at a longer period of time. guy: do you think the cycle is longer if the president wins again? i am trying to figure out how around maneuvers itself this story. thus far, the president has indicated a willingness and keenness to make sure that 2020 is not a recession year. i am wondering how this overlays each other. fred: the politicization of the fed is not something anyone would deport. intotronger economy going the election is what the president is looking for. the real fear of politicization

of the fed is not deflation, it is inflation. right now, we are a long ways away from an inflationary period of time. but if we get into an inflationary period and politicize the fed? tom: coming up, if you are part of global wall street, stay with us. mr. cannon will give us a walk-through. accounting with fred cannon. and goldman sachs and citigroup out with earnings today. it is like "game of thrones" will they be jp morgan or will they be wells fargo? this is bloomberg. ♪ xfinity watchathon week has sadly come to an end.

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for francine. here is the first word news. buttigiegpete announcing he is running for the democratic nomination for president. he has seen an uptick of support recently. , and 37 years old, gay spent eight years in the naval reserves. president trump has opened the door to a third summit with north korea's kim jong-un. the president describing the relationship between the two as excellent. kim says he is willing to meet if the u.s. offers acceptable terms for a nuclear agreement by the end of the year. french president emmanuel macron will address the nation tonight. tonce is waiting for macron set out conclusions following a series of debates with citizens designed to take the heat out of the yellow vests protests. thousands of demonstrators once again turning out across france saturday for a 25th consecutive weekend of protests.

czlionaire jack ma urging address theto overtime culture. who week he dismissed those have a typical eight hour office work style. 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 uma pemmaraju. this is bloomberg. tom: thank you so much. monday, a story on china out. how do you fix the farm issue in the united states? just shift the tariffs to other goods. much more on this. guy? guy: worth pointing out that the trade coming out after the boat this morning --

after the vote this morning, saying that the trade talks should be proceeding at pace as soon -- at pace at the soonest opportunity. the german finance minister says the bank mergers should be seen in a wider european context. he spoke to francine lacqua at the annual meeting of the world bank in washington. >> we built common supervision for all the relevant banks. we built the financial fund, which is able to work with very big banks all over europe. this is the situation which has changed. my view is that we should much ane look toward europe as open economy. it is a big mistake just to reduce the banks and the

situation to one country. francine: can you assure the markets you will do everything in your power to make sure everything is stable in the banking sector? >> the most important question we are working on since the last economic crisis in europe is to build a stable banking sector. we've made a lot of progress, and we will do the next steps. as you may understand, i will have to do some business here. guy: that was the german finance minister speaking to francine over the weekend in washington. deutsche bank firmly in focus. it is fascinating to see just how much pressure is being piled on the bank at the moment. a nice bloomberg story this deutschealking about as well this morning. tom: we are joined by ian bremmer, accounting expert, and cannon, truly an

expert on this as well. here is the book value of a bank. you are always buying a wonderful bank at a higher level, except not in the weirdness of germany, where the book values here -- where the book value's here. it is a positive, but they can't go out and spend the money, can they? >> it is a positive kind of. accountingegulatory sense, it is capital. but capital is really about confidence. tom: what is so important here is the dilution that everyone knows is coming down the road. the shareholders, sovereign wealth funds, and all the others of these troubled banks, do they understand the dilution they are going to have to put up with like the 10 to one reversal at citigroup years ago?

>> they should by now. they've been hit by it for a long period of time, both in the u.s. earlier, and now in europe. those banks in europe just can't make any money in a zero interest rate environment with their expanded operations. as a result, they will trend at very low levels relative to book value guy: -- book value. guy: is the ecb responsible for this? there's a big debate in europe right now over tiered interest rates and whether the ecb is responsible for the lack of profitability of european banks. what is your sense of what is happening here? i just wonder whether it is as much to do with the ecb as it is about the fact that europe just doesn't have a banking union, and capital markets union. it doesn't have the pieces in place that u.s. markets do. ian: it is certainly true they do not have those political capabilities, but in terms of

whether it has to do with ecb rates, i am turning to fred because i am not an economist on that. fred: they have to hold all these mortgages on their balance sheets, unlike the u.s. the second thing is zero interest rates just mean it is very tough to make any money, just like in japan. ian, all of the bright guys like fred and the others say you got to go cross-border merger. but there is a massive cultural issue in europe about this. describe for our audience the tension of unicredit/commerzbank versus an international bank. it is visceral down to the voting bloc, isn't it? ian: if you think about it the way these voters think about national champions -- tom: nothing has changed. an: the idea of creating

national identity works for regulatory policy, whether on finance or in technology. they actually act of their weight when it comes to regulating the world's largest common market. theyhen you talk about how create industrial policies towards individual corporations come of the way the individual leaders go out and try to grab investment for themselves, this is not. it is one of the reasons the europeans are so far behind in behindricans -- so far the americans in new technologies. they are looking to benefit individual jobs and payouts for tiny sectors. in that regard, it doesn't work. guy: let's pare it to what is happening in the states right now. as we all know, we saw pretty solid numbers out of jp morgan friday. that is one of the reasons why the u.s. banks are in focus. today we've got goldman sachs and citi a little later on.

european banks trading a little higher. we've got wells fargo coming out. shares under pressure there. tuesday we get to bank of america. morgan stanley coming out on wednesday. let's talk to ian bremmer and fred cannon a little more about this. do the top and bottom line matter today? fred: i think it is the top and bottom line. we expect goldman sachs to reduce expectations today. i think people will continue to look at that company and say, relative to where it is trading, to the money it can still make, and to improved outlook, i think it will still do pretty well. the fact is the operations move beyond the more cultural issues that are important. tom: i look at the earnings season and all of the expertise. why aren't we see in more mergers? had suntrust.

do you think we will continue to see this? fred: the size of that merger, bb&t/suntrust, it will be hard to beat anything like this. tom: there's a new ad campaign on axios. when you look at jamie dimon's letter, technology wins. full disclosure, i saw it with the what cobia transaction a million years ago -- the co-via -- the wachovia transaction a million years ago. fred: it was all about technology. they need economies to scale, especially for consumer banking to compete. guy: fred, should i value a u.s. bank as a u.s. bank, or as a technology company? i see the amount of money a company like jp morgan spends,

and there's a discount for being a bank. is there anyway way at some point that we end up with a reevaluation of a banking sector as a technology sector? increasingly, that's what it feels like. fred: in jamie dimon's dreams, i think that would happen. what we've seen so far with sin tech -- withsin techs going public, they tend to be valued as banks. it is very difficult to get technology multiples on that business. guy: we are going to leave it there. ian bremmer of eurasia group, fred cannon sticking with us. we are watching egyptian stocks today. they've gained more than 30% in the first quarter in dollar terms, around 90% this year. we are going to find more out about fdi.

we will speak to egypt's minister of investment and international cooperation. this is bloomberg. ♪

♪ uma: this is "bloomberg surveillance." let's get the bloomberg business flash. waste management has agreed to ,uy advanced disposal services which includes about $41.9 billion in debt. premiumpresent say 22% -- it represents a 22% premium to its closing price friday.

the iphone will go into mass production in india this year according to foxconn, the largest assembler of apple services devices. it is a shift for the company. it has large focused in china. india has become the fastest growing smartphone market in the world. that is the bloomberg business flash. back to you. tom: thank you so much. guy johnson in london. i'm tom keene in new york. with us right now is the most important woman in the arab world, egypt's minister of investment and international , who is advocating notstment for a politically troubled, but interesting, egypt to say the least. i have to get the news of the moment out of the way. "the times of london" expanding

on a story in "the new york times." i want to dovetail your economic and investment efforts with the political challenges that mr. of -- that mr. el-sisi has faced. guest: thank you. on yourlovely morning program. as you mentioned, we are moving forward with legal reform to improve the business environment , and there is a grand vision for egypt where investment would be driven by the private sector. so we will do all of the required reforms to ensure that. this is reflected in the indicators.

we have continually improved rating for egypt. efforts andonomic international cooperation efforts, are they amended or changed given the politics that egypt?sisi has in guest: the politics have helped improve the environment and open the grounds for more business to come to egypt. we see the fdi numbers and private investment. when you look at the prospects in the economy and egypt, you have to put international conflicts. i've just come from washington for the meeting of the world bank, the imf spring meeting. they are talking about the slowdown in the global economy and international prospects. despite this and the crunch in emerging markets, egypt continues to rise, right now at

4%. egypt ranks one of the top-performing countries in the region -- top-performing countries of the region. fdi notister, why is going at a higher rate? if, as you say, the investment opportunity in egypt is as good as you think it is, fdi should basic the way higher than where it has been. that is not taking place. what do you need to do to get that fdi story moving in the cooperation -- in the right direction? guest: it is important that when we looking fdi in egypt, we put it into the international context. we have to watch what is happening globally. in the spring meetings, the main outlook globally, there has been a slow down in fdi. there's an overall slowdown in -- in the overall economy.

nevertheless, egypt has been increasing at 4%, and that is how we look at it. today we are having an investment impact of the u.n., where heads of state are giving their statements regarding impact investment, and that is what we are wanting. what kind of fdi are we really attracting? fdi that is going to create jobs, that is going to be value added to the economy, that will bring in management technology and be export oriented, and be able to generate foreign currency. that is the quality investment we are aiming for. guy: let's talk about private investment in egypt. interest rates are just shy, the deposit rate, of 15% in egypt. is that number two high, and is it discouraging -- number too high, and is it discouraging investment? guest: let's see what the

numbers tell us. the sector gives you a lot of optimism and positive outlook. we don't only look at fdi, but the total, which includes also the domestic investment in the number of companies that have been established every day. this is including -- this is moving at 27%, which gives me a look at the investment in egypt. tom: let's go to mr. bremmer with a question for dr. nasr. ian: there's been a lot of news because you sudan have significant domestic instability. do you feel like you have dodged that bullet given the arab spring and el-sisi taking over from what had been a much greater period of domestic

instability? or do you think there is a much more significant level of mass discontent, even in your country, and terms of the working and middle-class? guest: it is very important to ighlight that we have a grand vision for egypt, including a bold economic program that has been packaged with a lot of social safety nets. we look at all of the different amendments that took place. we have new investment that puts all of the guarantees and insurances into the private sector. it provides incentive to reposition egypt on the global economic map. we've also led major reforms in terms of sectoral reforms on gas flows and energy renewal, and all of these that bring in the private sector. you see that in the number of big companies that are currently expanding or establishing. that thened the issue

egyptian people are part of the reform program because it has been done through extensive consultation by the public, and the parliament has been very much engaged in that. so there is a lot of appreciation because there has been a very transparent system of acknowledging challenges, but also putting forward the way forward in a very consultant have manner. tom: we are going to have to leave it there. thank you very much. us.se stay with from london, from new york, this is bloomberg. ♪

guy: bit of breaking news on volkswagen over the last couple of minutes. to use the car analogy, a rearview mirror story. co martin vendor corn erkorn charged with fraud in germany. , theis the diesel story

story that germany, in its entirety, is trying to get away from at the moment. this headline just brings it back. not much reaction in the share price. tom: but let's look at the 20 year plus chart of vw, which is absolutely extraordinary. you and matt miller know this way better than i do. it is stunning how we don't understand the size of vw. versus 170,000es at general motors. this company is germany, isn't it? guy: absolutely. you look at the supply chain and the impact diesel has had, but people talk about this whole sector facing annette the simple crisis -- facing an existential crisis. today we got trade talks between the u.s. and the eu. you've also got the shift from

diesel to electric. vw trying to make massive investments there. ,uge investment going into that and tesla obviously the story we are talking about so much, and those tweets coming through from elon musk overnight. that s.e.c. story is not going away. so many different inter-blaze between these companies. fascinating to see what is going to be happening. tom, you will continue the conversation with jon ferro on bloomberg radio. but coming up a little later on, we are going to hear from the current ceo. "daybreak:sation in america's." so much happening with this company and this sector. this is bloomberg. ♪ and this sector. this is bloomberg. ♪

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pleasant surprise, and today we see whether goldman and citi can keep it going. imf chief christine lagarde says the world economy hangs in the balance with trade a big issue. and how good it could have been. president trump says the dow would be 10,000 points higher but for an aggressive fed. ecb president draghi steps into defend the fed's independence. welcome to "bloomberg daybreak." i'm david westin, alongside lisa abramovitz. alix steel on assignment today. lisa: i think this is fascinating, tiger woods among back with his first major win in more than a decade, 43 years old, after all of the personal issues he has gone through, showing that he is still a winner and showing his star power, frankly. ago he wastwo years saying he wasn't sure if he was going to get to play golf again at all.