♪ black,e: back in the credit suisse swings back to profit, sending shares higher. says the executive global markets unit is still viable. >> we are pleased with this performance, please with our people, particularly in global markets who have been under intense criticism and depression. records, bulls race to strong corporate earnings push the s&p to all-time highs, but stocks in asia and europe struggle for direction. a $1ank swoops in, taking

billion stake in the beleaguered german payment company wirecard. good morning, everyone. good afternoon if you are watching from asia. i am francine lacqua here in zurich. we spoke to the ceo of credit suisse who was optimistic about the future. we are getting breaking news out of germany. that april german business confidence figures coming in below confidence at 99.2 instead of the 99.9 estimate. the current assessment index is also a touch below expectations. looking at the markets, certainly those record highs are not translating into gains in europe. , more from our interview with the chief executive of credit suisse. but first, let's get straight to first word news in new york

city. donald trump says he is opposed to having current and former administration officials take part in various congressional investigations. this in an interview with the washington post, he says further testimony is not needed following the release of the meal the report. quality --ight for for huawei is coming. this as the head of intelligence agencies are set to meet in the u.k. for a cybersecurity summit. the nations are mulling a total or partial ban of huawei eq uipment. the frontrunner to be the next eu commission president says populist do not have the answers, these comments coming as manfred weber launches his campaign. he says the challenges from populism and global trade.

they may have to update regulations to allow them to compete globally. >> on the global stage, europe must define our key industries and what we see as future markets. we have to defend them and create a global champion in such key industries. egypt's voters approved sweeping changes to the constitution. it would allow the current leader to remain party until 2030 and is drawing stiff opposition. by amendments won landslide, but less than half of eligible voters took part. global news, 24 hours a day on air and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. francine. francine: thank you so much. u.s. markets close at a record high, european stocks are struggling for direction.

the s&p 500 index market new milestones as twitter, lockheed martin, and hasbro rose unfavorable first-quarter earnings. but do fundamentals actually support these valuations? joining us now is chief economist at unicredit. great to have you on the program, even if i am far away. what do record highs tell you? are you worried that stock and thatrformance -- it is stock market performance rather than anything based on fundamentals? >> it seems to me a bit of a sugar high. america is still fueled by this andrmal's fiscal spending the insistence of a central bank that is proactive in being stimulative. fundamentals,ying we still think we're looking at a slowdown this week in valuations, for me, are very high. francine: some kind of slowdown

that would be dangerous? is there a worried the fed looks at the stock market and tries to cool it off? erik: yeah, you never know these days. there's so much discussion about political influence. but i still think they will keep heads cool. the fed, side is that or any central bank, cannot drive the stock market, percent -- per se. fundamentally, they cannot underwrite the stock market and cannot prevent a fundamental downturn. not a crisis, but a cyclical downturn. if it comes to that stage, we economists and central-bank have come to a stage where it is not real. francine: i know you are an

economist, not a markets person, but we saw these record highs in the u.s. it seems europe is much more uncertain about market strength. does that also reflect some fundamental concerns in the european economy? erik: yeah, i'm sure that is true. is that thereory have been a number of fundamental problems. is thatkey problem there has been a significant slowdown in global trade in the second half of last year. it is now starting to look like it is a bottoming out. that started clearly in china. we know today that the chinese saw this, were worried about it, and worried about the trade restrictions, and they stimulated substantially a host of different things, and it is working. so now you are seeing the stimulus starting to push trade

up again in europe is benefiting. europe is much more open thomas so we got hit harder, and will come back better. so this stimulus taking hold will protect the world no matter what happens? no, it cannot protect it completely. with trust trade policies -- trumps trade policies and sanctions, i'm worried how this plays out. that everything works with a lack of two quarters. europe is a quarter or two out, and then we will see how it plays out. for the next couple of quarters, my money will clearly be on better numbers in europe.

we are waiting for what i think will be a showdown -- slowdown, but that remains to be seen. francine: thank you so much. nielsen from unicredit stays with us. cars, ande talk trade the weakness in the german economy. this is bloomberg. ♪

francine: economics, finance, politics, this is "bloomberg: surveillance." with a big beat across the board for credit suisse, topping analyst estimates, shares get a

boost in today's trade. we speak to the chief executive here and i started by asking him how he sees markets developing. strong, the very second-highest month in revenue and 39 months. -- in 39 months. in april, we see trend is continuing. low inflation, high consumer confidence, there is a slight slowdown because the stimulus is fading, but it is still positive. a positive environment and we will take advantage of that. asia is doing better, china is doing better and we see that in our numbers. 18, theill below q2

stimulation was very strong. still below that, but healthy. in europe is always a pressure zone. francine: because of what? the eurozone, germany, the car industry struggling, driving the whole economy into a difficult place. but we have the good fortune of being a swiss bank, so what matters to us is switzerland, where everything is very good and we are doing extremely well. differentiate -- thatrentiate is switzerland does not share the challenges of other economies. swissne: i always ask a banks are taking the europeans lunch, do you think you can take on u.s. banks? we are the first to announce, so cap -- i cannot talk about

the others as much. but we are pleased with our performance, pleased for others also. we have been under intense criticism and pressure. i'm sure we will have difficult quarters in the future, but what we wanted to show is that this is a viable business has its place. it is really now delivering i working closely with wealth management, which is what we have always wanted. it is now 22%, 19 over 18, and becoming material. francine: in europe, there is so much merger and acquisition speculation. is there any part of your bank that would benefit from m&a? >> we are very focused on growth. we haveve these results produced are from relying on our own strategy. m&a is not something we find attractive at this point in time and we had very high hurdles for evan that in terms of -- four

m&a in terms of risk return. we can grow at four or 5% per annum, when we have 35 billion in assets in a quarter, have to weigh any acquisition versus that. francine: that was the credit suisse chief executive. ballots focus on germany's -- europe's biggest economy, consumer confidence in germany has fallen to 99.2 in april. joining us from skype in munich is the ifo president. as always, thank you for giving us a little bit of your busy schedule. are you disappointed in the figures are you think the trend is upwards? clemens: it is a disappointing result.

[inaudible] francine: mr.fuest, i'm going to cut you off because we are having trouble understanding what you are saying. i will get back to you. k, we were speaking to the leader of credit suisse who said germany will be disappointing. how much do you worry about the german economy? erik: i do not worry a whole lot. today wase from ifo that it was disappointing but it was all on the manufacturing and trade side. while manufacturing confidence is at an all-time high. so this division between the

internal and extra. it -- external. it comes back to what we have talked about before, the main thing keeping germany down is the slowdown in global trade. that looks like it is picking up , it is picked up in the numbers out of china. and typically, a month or two later, it moves to germany. so i'm not fundamentally worried. erik, do you think the economy can't get much better in the next couple of quarters or will it take longer? it will come back, we were down in a hole. , showingstructural way where we are, it is a little bit like the american economy. you have full employment, taking along nicely, but this case, they are doing with much, much better balance sheet then america -- than in america.

economy which an is much more exposed to global trade. and when you get a shock like we got last year, you get to the impact. and the auto sector is shoring themselves out, hopefully. francine: i am looking at some of the eco- -- ifo breakdown, it is clear some of the manufacturing sector remains in a slump. is this a structural concern? is a no, i think it reflection of the manufacturing sectors exposure to foreign trade. outside of the eurozone, more than a structural thing. in and around the industry, in the aftermath of dieselgate and all of these issues and stuff.

this is a very important process we are coming through. but i am reasonably optimistic. pensn automakers have more than anybody else in the electrification side. they will be ok, but that is a little more unknown. cleme -- clemens, let me get back to you on what the manufacturing sector needs today. problems inre are exports. the economy is relatively weak, export demand is weak, but there are also domestic issues. was weeke investment in germany, which is that companies are hesitant to invest. this is uncertainty regarding asset prices and the absence of

tax reform. cutr countries have corporate taxes, germany has not which makes them less attractive as a business patient. does the monetary policy from the ecb actually help germany significantly? what does germany need from the ecb today? clemens: they have postponed interest rate hikes. and in light of the current slowdown, this is understandable. this is not a major factor for the german economic situation. so what germany would need would be structural policies for its manufacturing sector. to uncertainty about the future of the car industry, to remove uncertainty around energy prices , and of course, a strong trade exposure. the looming trade war, brexit uncertainty has not gone away and these are factors that way on manufacturing. there is little the government can do about that.

when you look at future expectations that people are worried about a trade war between the u.s. and germany, is that overdone? clemens: they are certainly worried. trump has recently made comments about tariffs on harley davidson , these were retaliatory tariffs. there is a possibility it comes back. on the other hand, trump wants to win his elections next year and he knows that if he taxes cars, there will be retaliation. , hee is halfway rational will avoid a full-scale trade war with the eu, so that is the hope. clemine: thanks so much, ens fuest, president of ifo. coming up, plenty more on the eu and brexit and our interview

with the chief executive of credit suisse. this is bloomberg. ♪

francine: economics, finance, politics, this is "bloomberg: surveillance." seven months after it all began, the s&p 500 has completed one of the fastest roundtrips in market history. rose nearlyk gauge 1%, surpassing the previous

closing high. for more on where u.s. market stand now is bloomberg's dani burger. dani: as you say, add another record at the concert is valuations -- concern is valuations. looking at is the lehman's version of the equity risk premium compared to interest rates, we're still attractive on valuations. measure is this actually below its long-term average, below the average we have seen for this market run. it iscurrently stands, nowhere close to what we saw at the end of last year and january, -- last january . issue, yes, this is the bright side, is volumes. volumes have been very low. past six days, we have seen two of the lowest volume days of the entire year.

so we need some pickup to show there is conviction in the body, francine -- buying, francine. francine: thank you very much. up next, oil pulls back from 2019 highs. we talk commodities next. we will also be speaking to the saudi oil minister. there was quite a bumpy ride when it came to crude oil. we will have more on commodities, on the price of oil, and on your markets. this is bloomberg. ♪

francine: economics, finance, politics. let's get straight to bloomberg first word news with viviana hurtado viviana:.

-- hurtado. viviana: by's president to set to announce his 2020 presidential nomination. biden is setdent to announce his 2020 presidential nomination. he plans to focus on the economy and his strong ties to labor. morgan stanley is shaking up the leadership of its wealth management unit. sherry o'connor will move as the company looks to expand. she previously led the wealth .ivision the u.s. trade team is set to return to beijing on tuesday. this as the world's two biggest economies are pushing to reach a draft agreement in may. it will cover intellectual property, technology transfer, and enforcement. tonese officials will head

washington for more talks on may 8. britain is set to toughen the rules under which huawei theates, but stops short of van. it could strip the company from sensitive parts of the u.k. telecom network. it is addressing concerns that chinese intelligence could use huawei to spy on other countries. have approved sweeping changes to the constitution including allowing the president to remain in power until 2030. this move drawing condemnation from rights groups and condemnation figures. linning -- winning by a half ofe, but less than eligible voters took part. global news 24 hours a day on-air and at tic toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. francine: let's talk commodities and oil pulling back from a high as report shows growing

inventories. according to sources, stockpiles may have jumped by about 7 million barrels. eric from unicredit is still here. because of the u.s. saying that they will stop waivers, are we certain that saudi arabia and the eu can make up for it? no.: i don't think that we can be sure about that. in many ways, saudi arabia is caught between its loyalty to the u.s. and its interest in curtailing iran. at the same time, they are dealing with russia. to cooperate in this class. could, and they , ibably could just about

kind of wonder if they really want to. i think they will go slow. francine: what does this all mean for the price of oil? we had news yesterday that we saw a little bit of upside swing for some of these u.s. stockpiles. mean for what we expect for the price of oil? erik: volatility, first of all. trump does orwhat what the logic is. if they can implement it. if he has court needed with anybody. assume there is a lot of volatility. equilibrium is lower. it is going back to where it came from. with how they proceed, i would get my money -- did my money on volatility -- i would bid my

money on volatility. in those four dollars or five dollars, do they make a big difference for your forecast for the world economy? erik: this is very important. that oil to conclude has set a level higher than it experiences, half of the one million barrels a day that are is responsible for, at a strong dollar, and that is bad for europe. every 10% increase in the price measured in euros, it costs about 0.1% on european growth. this is bad news for europe, unfortunately. francine: and this is the bad kind of inflation. it's not the kind of inflation that central bankers want.

possibility that it also forces the good kind of inflation, the core inflation to go up? that would be the first instinct, right? the u.s. curve -- the battle here, is it bad inflation? it is simply a cost push of it. and later down the line, we are seeing the companies spilling wages.e it would be a welcome secondary effect. but we would have a few months of the negative first. thecine: do you worry about ecb not having enough tools to deal with the next downturn? erik: yes.

they would tell you that they have enough. and they do. but the question is not what the limits are. it is political. at whattion is really they politically unavailable? when does it become available? because of those restrictions, it takes more time. they should have done qe at least a year earlier, not 18 months earlier. we can debate if it was ok or not. the same thing happens here. if we get a downturn, the press will measure with the ecb can do, which will make a material effect on the economy. best side ofhe this state we're in with the

ecb. francine: eric nelson from nielsen fromerik unicredit will stay with us. a commission's vision for the future of europe. this is bloomberg.

this is bloomberg surveillance. i'm francine lacqua in zurich. let's get straight to the bloomberg business flash with viviana hurtado. managemente asset units are in serious talks to

merge according to the financial times. one solution reportedly being discussed is that the swiss banks put off the asset management unit and fuld it into the ws. several asset managers are studying such a tie up. tesla is trying to reverse last quarter's record decline in deliveries. the carmaker is reintroducing that havee versions shorter driving ranges than other versions. it is adding another private jet in 2020 one. these are for excursions around the world. prices will vary. the current cost for travelers is just under $150,000 per person. the plane will be refitted to have room for just 48 passengers . and credit suisse's men trading

arm swinging back, saying it is cautiously optimistic about the second quarter of the year. it sees client confidence returning and positive momentum. the result relieves the biggest headache. >> particularly in global markets, it they will be under intense criticism and pressure. that is the bloomberg business flash. francine, back to you. the largest political group of european parliament says the eu and the u.s. must work together to overcome trade tensions. he launched his campaign to be leader. commission >> you have to speak to each other. howarty is ready to discuss

to take away the tariffs on the table. we hope to do this at this hour. >> german exports are already under pressure. is that something that would trigger immediate retaliation because you don't have any other option? meant when iat i said respectful corporations. we did it with the stea -- steel sector. we have the same interests. we want to have free trade.

we believe in those products. we have the market services. and then the trade relationship is not so bad for the americans. very strong, competitive products. we can combine both things and really work on a good and fair trade deal for both. that was the epp candidate for commission president .peaking to maria tadeo let's look at the top business leaders that are pledging action to do with challenges ranging from climate change to ensuring fair global trade. the european roundtable of industrialists brings together 55 ceos with combined revenue exceeding 12 trillion euros. current sandberg is the chairman

of volvo who was previously chair of bp index chief of ericsson. -- and x chief of ericsson. good day to you. this important is entitled, "strengthening europe." with the action put forward be enough for europe to deal with president trump on trade and also a strengthening china? >> let's put this in context. and we look at the world you see increased protectionism from the west and from the east, ,ou see tendencies in europe and it is important to stand up and see the progress we have made over many years.

it is more fair than almost anywhere else in the world. we have a lot of challenges ahead. that is why we are raising our voice for this. we not saying this for us. we do finance companies. we're worried about europe. dowe define as company -- we fine as companies. it we're worried about europe. we have the technology revolution as we call it with digital and artificial intelligence. morent to invest in people, jobs, and skills to lead that transformation. --ra: you say this is europe urgent. impacts ons limited the euro area from u.s. car tariffs alone.

at how much of this is driven by concern around president trump's trade policies? we in europe fundamentally believe in the roundtable, that the world is in ar off without tariffs free trade world assuming there is an effective framework in place. we can only hope the discussion leads to some form of this so we can continue to set up free trade. that is better for everyone. nejra: do you welcome the shift of intervention or would you prefer individuals to stay out of your business? that is a difficult question because we were quite involved at the european table back in the 90's when the eu was formed.

that had fallen more in the background in recent years. in today's world, we must not be naive. that weto make sure have a policy where we take some .ecisions it believe we are much better together in the eu and europe than trying to do it in a fragmented way. nejra: does the german industry need its own banking powerhouse or will german companies finance themselves with international alternatives? carl-henric: i'm not sure i have a good comment on that. u.s., europe, and different countries need their own financial system. it is not one of my specialties. erik: on the issue of european , it is sort of the

buzzword of today because of china and america. but as an economist, i think you would say that we don't have very good experience with champions because there is a connection between them and government. in a good way. articles have been written about going in america. are you a fan of european champions given the challenges we have? the are two aspects of competition policy. on one hand, we have to make sure that there are choices for citizens around whatever we do in europe. side, you have to also allow companies to gross of that they can compete successfully on a global scale. that all the aware tech giants have grown in china and in the u.s.. and we haven't grown any here. athink it is time to take

hard look at the competition policy. you can see that in any sort of policy that can occur. if we have this in any part of , we can have that in chinese solutions. how do you see that involving? have been writeups about you wanting to bring jobs back to europe. what does that mean for the relationship with china. carl-henric: it rises in the country with skills. it did not bring salaries up so it became disproportionately advantageous to be there.

world, the difference is not all that big. but in today's more tightly connected world with the supply chains, more software than hardware, you need effective short supply chains. that is why you see companies like ours start to invest in europe again. in general on china, i think that there is a sense -- you hear it more often in the u.s., but you look at china as a zero-sum game. we're more involved in china than european companies. has added toole our growth. we are as critical as anyone else that all trade relationships must be

controlled. you must be able to trust. great to have you with us today. chairman of the european roundtable of industrialists. n will stay with us. we'll bring you stocks including the german internet payment firm with shares surging after a billion-dollar investment from softbank. that is next. this is bloomberg. ♪

economics, finance, politics. this is bloomberg surveillance. it has been a big day for earnings in europe. let's get a look at what is moving markets with dani burger. of the busiest weeks for earnings in the first quarter. i know you have been covering this one in depth. credit suisse is trading at a six month high. trading profit after six years of losses. in u.s.beat its peers fixed income. it got investors excited this morning. we have more earnings are from sap now trading at or around the

highest price on record, up nearly 7%. the company really bolstered strong growth in the cloud business. here we see confirmation from the company that yes, it is working and they are continuing full steam ahead with that plan. and finally, wirecard is a company that has been dealing with allegations of fraud. today, a $1 billion investment , that is coming from a corporate bond that they will be buying. sosa and positivity after a lot of declines, francine. thank you so much. dani burger with the latest on some of these movers. bloomberg surveillance continues in the next hour as tom keene wens me out of the next hour will talk with a columbia university professor and nobel laureate in economics. he has a great new book out

called "people, power, and profit." we talk about banks and that some of the technology stocks, the banks are too big to regulate and make their own rules. in the meantime, european stocks following asian shares a little bit lower. theeuphoria that we had in u.s. is not translating across the world. treasuries are climbing and the dollar is extending its rally to a six-month high. and we have been talking quite a bit about crude oil, dipping with gold holding onto recent losses. this is bloomberg. ♪

francine: back in the black. it credit suisse's trading

business sending shares higher. the global markets unit is still viable, they say. >> we are pleased with our performance and pleas for our people. under intensee criticism and intense pressure. aancine: bulls raced to record strong corporate earnings pushing the s&p to an all-time high. but stocks in europe struggle for direction. .lus, softbank swoops in the japanese conglomerate makes a $1 billion stake in wirecard, sending shares surging. this is bloomberg surveillance. it tom and francine from zurich and new york. we will spend a little bit of time talking about banks and looking at markets in the u.s. with record highs on the nasdaq and s&p 500. tom: the stock market powering forward off of tech enthusiasm. and also note the politics of

the moment. i believe in june, president trump will go to london to clog up the traffic for you. i think on the third and the fifth of june. expect some pageantry. let's get straight to the bloomberg first word news with viviana hurtado. viviana: the u.s. and china resume trade talks next week in beijing. the goal is to reach a draft agreement by the end of may. the white house says negotiations will cover issues like intellectual property, technology transfer and enforcement. are stepping up diplomacy to try to resolve the years long dispute. resident donald trump as opposed to having current and former administration officials investigations called for by house democrats. this an interview with the washington post.

further testimony isn't needed after the release of the mueller report. treasury secretary steven mnuchin delaying the house committees demand for the president's tax returns. and toughening rules under which theei offers -- operates in country. the you cable stop short of an outright ban. the trump administration is pressuring allies to prevent away from -- hallway -- prevent guawei from building 5 networks. as executives have been seen contenders to replace james gorman in the future. one of the wealth management cohead shelley o'connor will run bank units offering loans and deposit accounts. news 24 hours a day on-air and at tic toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm viviana hurtado.

this is bloomberg. tom: let's do a data check to get set for our conversation next halfu in the hour. it's look at stock markets. futures pullback to negative four. a weaker euro. please.een showing the bull market. the dow settling nicely. not a record high, but getting up there. bid -- and for turkish lira, another difficult day. i'm really glad that you looked at pound because there is a little bit of movement on the brexit side. theresa may may get something through parliament with amendments. it is unclear she will get it through, but she's trying to find a plan b to try to get this agreement with labor through. looking at european stocks. they are following asian shares shorter.

this is a softer open despite the record highs in the u.s. treasuries climbing of the dollar extending to a six-week high. we're looking at oil because it is the story over the last couple of days. oil moving higher over inventories, tom. tom: i'm not going to say it's chart of the year but it is a candidate already with the way that equity markets are going. this goes back to 1999 and the peak in march of 20 -- 2001. 50-day, the moving day, you heard it all. maybe this is the live cross with the perfect bounce in 2012. and up we go to where we are right now. and we are nowhere near the equivalent 1999 high which would be s&p 4000. the dowonvert this to to make it more accessible. but this shows the equity market as compared to where we were at the peak of 1999 and 2001.

francine? a chunk: we will spend of time talking about those markets. credit suisse's main trading business swan to profits after two quarters of losses. swung to profits after two quarters of losses. i spoke to a chief executive that says he is pleased with the global market. >> there was a lot of pressure last year. our view was no, give them a chance. after three years of very deep cuts, it is important for them to be stable. and i think with that structuring, it may be upside for us. and equities are strategically very important for business. francine: take market share from who? >> we don't mind. we're very strong in the americas.

beginning market share. and also in the middle east and africa. but we don't want to be too bullish. it is a very cautious market, which i like. we don't want to seem too bullish but the results aren't that we are solving every problem. been a big discussion topic. we are now revenue neutral and leverages up 31%. we have really optimized our collateral to make sure that business understands. trading.quity we have recruitment. and there is a bright spot. it is really the secret ingredient. it is the joint venture between wealth management and global markets. these are the numbers that you see.

transaction revenues are 3% year on year. what they do is structured products for that kind of clientele. special equity products and services. it has worked really well. and we are now replicating, creating eight tears in asia. samee also quite a do the thing for asian clients. overall, it's a good start to the year. francine: that was part of our interview with credit suisse chief executive officer thiam. joining us now is a bloomberg opinion finance columnist and head of u.k. investment. in cuba for joining us. if you look at some of the metrics, investors will worry -- were worried about credit suisse and they seem to be getting better.

what does that mean for the rest of the european banks? >> we were waiting for european banks to show us numbers. people will take solace that european investment banks seem to be continuing to lose market share. we saw a relatively stronger numbers the city u.s. peers with fixed-income trading and income trading. that will be some good news for european banks that have been able to follow through. it was one of the worst in recent memory. we will learn more about that tomorrow. so we won't be leaning on other firms just yet. give me a sense of how much m&a will actually happen. asset managers or possibly combining. we are about commerzbank, deutsche bank, unicredit. what will we see this year? >> it seems that we are a bit of

a turning point, that deutsche bank and commerzbank have not engaged in discussions about potential combinations. and other players might be interested in commerzbank. it could be unicredit or even bnp. some concern about us they want to take the discussions further or go their separate ways. prompting, we is think, another acceleration of potential combinations. we will discuss it many times on , that there will be significant hurdles for them to try to overcome because of regulation. not a question for jeffrey. it would be inappropriate to speak to him about this with the bank of switzerland. but i just did a quick analysis of price-to-book and price to sales for a select group of banks.

credit suisse is in no man's land, stuck in the middle. solution is m&a, transactions, and combinations. do you see these executives not only at credit suisse but other banks? is their appetite to murder? -- is there appetite to merge? still not possible to move capital completely freely .cross the eu there is also the factor of profitability not being where banks set out to be. they are still short of their target for this year. rate on thell the return of equity target. that we are not there yet and investors are in a wait and see mode. tom: how do you synthesize this for people who want to invest?

i don't want to get you in trouble but is the basic idea that the european financial system has to clear its market in negative interest rates? is it too much to ask for? >> is it too much to ask for castle market union, banking union, the eu to start to sort things out? we have been saying that for the better part of a decade. probably a better outlook to the year. , whereef funding costs is the revenue growth? where is the top line? can that happen without european growth? that is the question. thank you both for being here. a coming up on bloomberg tomorrow, we will be speaking with the chief executive of ubs and the barclays chief executives. we will have a full round up of bank earnings and bank chief executives. this is bloomberg.

♪

francine: this is bloomberg surveillance. tom and francine from new york and zurich today. stocks struggling to sustain yesterday's momentum. buoyancy that took the s&p 500 to record highs appears to have faded in europe. even earnings surprises are failing to erase lingering concerns about the region's economic outlook. , globalme now is peter head of currency strategy, and jeff from ubs is still with us. how do you explain the record highs in the u.s.? why is the rest of the world not following? eff: we should look at the

context. we are coming off such a large correction. in last peak was hit september so we are pricing back in reality. the reality is that the u.s. is still driving global growth. china is turning the corner but it is not driving global growth. almost been a safe haven. i think we are getting back to that environment. francine: do you worry about valuations in the tech sector or the tech space? geoff: we are overweight technology right now, so in the context of what happened in q4 last year, we did reenter the market. we captured some of the valuation adjustment. now it is time to see whether valuations can be justified. but we can overstate that in the u.s.. it is an extraordinary moment in an extraordinarily

unloved bull market. be flow of money into tangible and less tangible assets. is chairman powell what this is all really about? to some extent, markets are counting on that. it is about the ecb and adding stimulus. we still think that markets just need to get away from this addiction. to central-bank support. so where is the top line coming from from the banks? where is the revenue growth coming from? where is demand? where his investment growth? has answered that question and that is what is frustrating at times. tom: unanswered questions. is hereom union bank with us as well. peter, i look at the dollar, the strength, ifllar you will. can we talk about a dollar

breakout confounding? question is not just a of being able to, but we have to, really. the dollar index, we are breaking towards pretty important levels. what is interesting is that the dollar really went through the roof when rates were going lower. the dollar rallied against the g10 and em currencies. we have not seen any followthrough today, but if we do get through the punchy levels of the dollar index, investors will have to jump on this. question will be one of positioning and whether or not investors really follow the dollar moves at this point. tom: check your favorite stock charts, everybody. up, up, off. -- up, up, up. this you for being with us hour. it is an extremely timely

conversation whether you are conservative or liberal. a major new book effort. on him toreal effort speak of our discontent. in the next hour, he will rile you up. this is bloomberg. ♪

is bloomberg surveillance. let's get to the bloomberg business flash. nissan is cutting preliminary profits for the year that ended last month. the carmaker cut earnings from

$4 billion to $2.8 billion. nissan car sales in the u.s. and china sputtered. after spinning off the alcon eyecare business, in 2019, this was drugmaker saw profits growing by a high single-digit percentage. first-quarter earnings came in better than expected. they have been shaking up their strategy to spur growth. in the last year, they made three crucial acquisitions. we spoke with the company's ceo. >> what i do believe is that you need a consistent m&a strategy. inyou look at companies and the industry, they sign-up for consistent m&a strategy with a roughly 5% market cap. that is the range we want to do. viviana: that is the boom -- bloomberg business flash. geoffrey ared here, francine lacqua is in zurich today. peter, i want to go to the

global litmus paper. the u.s. dollar has been remarkably range bound. what does the dollar dynamic tell us about what we have seen in the surgeon equity markets? markets? n equity peter: certainly volumes have not been all that substantial following this large move we have seen since january. i think that the correlation with equities has been relatively high. they both seem to correlate pretty well. have seen kind of a change in stance from the fed going from relatively hawkish to quite dovish. and we had richard from the fed talking about scenarios in which they can cut rates. we can manifest later in the year with a little bit of dollar weakness. but we can continue equity appreciation. but we have senior to date --

-- mayre to date maybe correlate later on. tom: procter & gamble playing around with foreign exchange like they always do, but how does that fallen to enthusiasm for u.s. equities when you fold in foreign-exchange adjustment? geoff: it is all relative. there are reasons to be less japanesetic about exports in those indices. u.s. overseas exposure, 45% to 50%. it is more marginal now. as long as the dollar and u.s. equities grow in a way that does not talk money out of emerging markets or tighten global financial conditions, then the world will be ok with that. francine: what is your dollar call from here until the year and? weak: the dollar is against sterling, euro, emerging

markets probably more a mixed bag right now. a lot will depend on where the fed goes as well. is the fedeter, what looking at? it seems the market was really worried about trade concerns with china and finally that china stimulus is taking hold. what does that mean for pet -- fed policy? worried about was external conditions and now they are not worried about inflation at all. if you look at the core in the states, it is very moderate. inflationly, you see falling quite aggressively in the eurozone. i saw the australian data overnight. for the feds, they are looking at growth. if they see any weakening in the growth trend, there were be another method to that. i am looking at pmi, the jobs data coming out. and that will be the litmus test of whether the fed will move action toward a rate cutting outlook. tom: a good conversation.

geoffrey, always great. we will move forward in the hour. coming up later, this is important. a timely conversation on the mystery of the china relationship with southeast asia. he is a former australian prime minister. kevin will, of course, turned to china as always. and on trade and the miracle of the australian economy. what more to talk about. i want to mention the joseph stigler is with us in the next hour. this is exceptionally timely given the economics and politics of washington. stay with us. it is a beautiful day in new york.

♪ "surveillance," francine lacqua in zurich, looking at swiss banking and the finances of the european banking system. i am tom keene.

viviana: the trump administration wants to wrap up a trade deal with china by next month. next week, a delegation goes to beijing for talks which returned to washington on may 8. they hope to announce a draft agreement then. intellectual property and how a deal would be enforced are sticking points still on the table. kim jong-un arriving in russia for talks on his nuclear program with vladimir putin. the kremlin says putin will try positive -- consolidate the positive begun by donald trump. joe biden expected to announce he is running for the presidential nomination. rallyl have a campaign next week in pittsburgh.

he plans to focus on his economic message and strong ties to labor unions. theresa may is considering a new tactic in her attempt to deliver alreadyparliament rejecting her deal with the e.u. three times. she is going to try her luck with a piece of legislation that would enshrine her deal. if they do not get a brexit deal in a month, they will have to deal with european elections that could be punishing for her conservative party. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. francine: thank you so much. for more of brexit, we welcome rob hutton. kinsella. us is peter great to have you on the program. theresa may wants to try a new

tactic and at the same time she is coming under increased pressure from the conservative party. will she do everything she cannot to go through the elections because they will lose badly? rob: exactly. they really don't want to fight the european elections. but conservatives do not have a european policy they agree on. they will be mauled from the right by niall farah's and the faraj andty -- nigel the brexit party. on the left with parties like change u.k. that do not want brexit to happen, and in the metal -- middle will be theresa may's conservatives who do not know what kind of brexit they want. if they don't want it to happen, they have to pass a whole lot of legislation before the end of may. what we will see, they are still

arguing about whether or not to do this, but instead of trying to get a meaningful vote through, they may try to get legislation through. francine: i don't know if you can quantify it in percentage, but what is the likelihood of this going through? we were hoping for a breakthrough between theresa may and jeremy corbyn. why would labour mps vote for this? rob: it is a mistake to look at this and think, why would they do this thinking it would work. we are at a desperate throw of the dice, nothing left to lose territory. pass't see why this would as things stand. the tories who would not vote for the meaningful vote will not vote for this. the labour party says they will not vote for this. in theory, because it is

legislation rather than a single sentence, which is what the meaningful vote is, you could use the bill to hang the things , like says it wants workers rights guarantees and environmental guarantees, even potentially a customs union. you could put them into the bill and that might make it attractive to the labour party. talks involved in the seems to think the talks are close to a resolution. questions, about 18 but let me go to the question of the moment. 4,, me, and francine on june the president will be in town. will prime minister may greet the president? will she be around? rob: that is a good question, isn't it? i think she will still be prime minister in june.

it probably takes two months, even if they started tomorrow, to find a new conservative leader. there is a move in the conservative party to throw her overboard and and a counter move, they need to fix the presenting problem. i think probably they will not throw her overboard but are talking about it. tom: you are going to have the shepherds pie and i will have the suet stuff i cannot even taste. we will be having dinner and nigel farage will be running the country. can he get any kind of traction versus a diversions of the polling? definitely get traction for the european elections. even the name of his party, the brexit party, that is the name you want to have someone people

go into the polling booth, they will put their x next to the brexit party whereas the other parties have slightly less good names. theeems to have eclipsed u.k. independent party and there seems to be some question as to whether they can slug it out. ukip was successful because itel farage was the head of and now that he is not, it is not successful. we will see if they can translate that into something harder. francine: what does this mean for pound? peter: certainly, the increased uncertainty does not help in this case. at this stage, most of the good news is sterling in the sense that we got the extension of article 50 until october 31, which is halloween, quite

fitting, the day of the living dead. it seems that theresa may is a dead woman walking. for starling, most of the good news has been priced in -- sterling, most of the good news has been priced in. if you have a leadership basically have an election between jeremy corbyn and boris johnson. sterling will not like that. futures gains are contingent on what happens in the next week or two with whether we can get the fourth iteration of the withdrawal agreement past. francine: overall, if the u.k. had to put these european elections together, can the pound move on that? farage does well and

parliament, does it translate at home? peter: you will see the brexit party do reasonably well. i would be surprised if the conservatives put forth any candidates et al.. -- at all. the risk is you get a large brexit caucus going towards the e.u. it will not be good from an optics point of view. sterling could trade lower, but we have to see how it goes. francine: you had a great explanation on what will happen and what theresa may is trying to do. what are the chances of her surviving until october 31? october 31 is a really long time away. you have the tory conference in october before then.

her commitment is to go at the point and which brexit is delivered and it is quite likely that as it stands, october, brexit will not have been delivered. everyone else seems to think if she gets to the summer and has not done it, but somebody else have a shot. there is a row. people who want a hard brexit in charge want her to go now before brexit has been delivered so a hard brexit can deliver brexit. the people who don't want that to happen want her to hang on, get britain out, and then hand over so the debate can be about the future of the conservative party which they think would benefit their candidates. the e.u. has given the u.k. this time so the u.k. can change something and at some point you have to say one of the things

that u.k. has to try changing is the leader. there is an argument that the leader is part of the problem. francine: nicely explained, rob hutton from bloomberg with peter kinsella. from thewe will hear leader of the largest political group in european parliament. he spoke exclusively to maria tadeo. this is bloomberg. ♪

♪ francine: this is bloomberg "surveillance," tom and francine from zurich and new york. manfred weber who leads the largest political group and the

european parliament, says the e.u. and u.s. must work together to overcome trade tensions. he spoke to maria tadeo in athens. partner,europe is a not somebody you can give in order. you have to speak to each other. myself and my party are ready to discuss about taking away all the tariffs on the table. trade in favor of free and we believe our products in europe are good products, but it must be discussed in a respectful way and we hope we can do this with our friends in america, as we discuss about a new trade agreement. onia: if we see the tariffs in particular german carmakers and the exports are under pressure because of the global uncertainty, when that trigger

immediate retaliation because you have no other option? that is what i meant when i said respectful cooperation. in the steel sector, there was not immediate action afterwards and europe must act. we have the same interests. we want free trade. -- if we seee together the market on industrial goods and services, then the trade relationships are not so bad for the americans, when you combine both things. the services look to facebook and google, they are very strong and competitive, very good products. combine both things, you can work on a good and fair trade deal for both sides. francine: that was manfred weber, the epp candidate for

president speaking to maria tadeo. .e are back with peter kinsella when you look at the european elections, some of the underlying week this in the german economy, the weakness in france, how concerned are you of euro area growth? peter: i am concerned and i think last year, we saw the big slowdown in europe. this time last year we were printing a growth of 2%, 2.5%, and now edison slowdown. factors likese of a supply slowdown in germany and labor issues, but it came apparent they were falling external demands, the chinese slowdown was having an effect on the arizona. the risk we have now -- the euro zone. the risk we have now, it will

hit europe at the worst possible time with low growth and brexit tensions, parliamentary elections, and the host of problems we have. i am concerned from the growth perspective. we have not seen improvement in european data despite an improvement in chinese data. we are waiting to see some green shoots, but we are waiting a while. i am concerned on the growth, and what you see is we will likely see the ecb continued to be rather concerned regarding the euro zone both outlook. -- growth outlook. francine: the main problem is whether the ecb has enough to deal with the next downturn. do they? peter: i don't think they do. short of printing money and delivering it in helicopters, there is not much they can do. has moreean government fiscal space than they realize,

so there is a case for increasing fiscal stimulus in the euro zone and germany, and industrialized countries in the oecd, germany is the only one that had a decline in the gdp ratio over the last 10 years. they have cheap debt metrics and there is a strong case to be made for a large german fiscal stimulus. saying that and doing that are different things and things would have to get worse before the politicians are compelled to go down the fiscal stimulus route. tom: peter kinsella, thank you so much. coming up, an interesting conversation on boeing and the airline wars, putting bodies in seats. muniz, look for him in the 1:00 hour. this is bloomberg. ♪

♪ this is bloomberg "surveillance." german software maker

sap surging after raising their profit outlook, reporting a 26% increase viviana: in new bookings. they are pushing ahead with a major restructuring. elliott management disclosed a 1.3 billion dollars stake in s.a.p., saying they have been consistently undervalued. thea trying to reverse decline in deliveries and introducing lower-priced versions of several models. there will be versions of the model s and x that will have shorter driving. qualcomm plans to invest $160 billion in the business of making its processors. samsung leads the market for the memory chips used in devices. tom: peter kinsella with us.

a question to him before we set up a discussion on europe -- how much of the e.u., european automobile business is distorted by the euro and the valuation of the euro? peter: i don't think an awful lot. if you look at the real effect of the exchange rate over the past 15 years, it has been pretty solid. rather what you find is european and german exports additionally, the biggest determinant of their export component is the growth metrics of their exporting partners. if you look at the states and china, when there gdp growth is doing well the exports do well. have muchone does not of an impact on overall profitability. it should not be an enormous level or effect.

looking at euro-dollar the last year, it has not been that volatile. we are not -- have not really been that volatile so you will export that in the numbers of the auto industry. francine: peter kinsella, thank you so much. on to the southern -- sudden ofth last year on the 25th march, the company came to a standstill. the man who oversaw everything -- weesign to for aris chased his charismatic leader across the world and in his new book, he tells the story of the man who fixed italy's biggest car brand. congratulations on the book where you have released excerpts. it is a fantastic read.

he was an instant -- indispensable leader and the pride and joy of it away because he did so much for the car business. what will his legacy be? >> thanks a lot. was able tochionne chrysler.nd it is quite incredible that for a period of 10 years, he had more enemies than friends because he was seen as somehow stealing fiat from italy. this is something sergio never understood and something that really made him mad. now thecy is clearly word of the biggest carmaker and from what his successors, his ceo and cfo told me, his legacy

is essentially the way he was managing the business. what marchionne used to say, he was trying to make the difference every single day. your account is very personal. you go through lots of meetings you had with him. was there a particular moment you remember fondly when you saw how he was extremely hands-on? opportunityad the to make his last ever sit-down interview at his home in michigan the night before his last detroit car show. for that story that we ran for bloomberg overnight, he somehow gave me his confessions on the future of the auto industry. that night, when we spoke essentially all night long,

marchionne told me that for him, it was time to leave fiat leaveer but he wanted to the carmaker in the right place to be able to survive the tech destruction that was going to come. somehow this is happening. tom: thank you so much, and congratulations on such an important book. much more coming up. we are thrilled to bring you -- whatever your political affiliation, joe stiglitz will join us, a new book, a required read for liberals and conservatives. ♪

♪ all as wellrning,

as money flows into tangible and less tangible assets. the summer of 2018 seems so distant. .ummer is coming in washington, separation of powers is all the rage as president trump rages on the democratic machine. they want his tax returns. america and our discontent. can we call for liberals, joe stiglitz is not afraid of being called a liberal. this is bloomberg "surveillance." withconservative tom keene francine lacqua, we do not know. credit suisse is alive and well. francine: it is francine in neutral switzerland. credit suisse beat on the global markets and on equities, so it was given a little bit of a lift

to the share price. tom: let's get to first word news, quite a day. viviana: the trump administration wants to wrap up the trade deal with china by next month. next week, a high-level u.s. delegation goes to beijing for talks, which returned to washington in may. they have to announce a draft agreement. intellectual property, forced technology transfer, and how i deal would be enforced are sticking points. kim jong-un is arriving in russia for talks about his nuclear program with vladimir putin, who will try to consolidate the positive trends stemming from president trump's meeting with kim. former vice president joe biden is set to announce he is running for the democratic presidential nomination, bloomberg learning he will announce tomorrow by a video and will follow that up

with a campaign rally next week in pittsburgh. he will be the early frontrunner in a crowded field and plans to focus on his economic message and strong ties to labor. credit suisse's main trading business posted a bigger than expected profit after two quarters. tijane thiam is pivoting credit suisse away from more volatile business. >> we are pleased with this poor performance -- performance. the markets have been under intense criticism and pressure. viviana: global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. withevercore reporting stability and a lift to their earnings as well.

equities, bonds, currencies, commodities. futures that negative for, euro weaker. vix, 12.36, a bull market down, not at record highs. 1.2942 tries to find stability. francine: we did have a worsening mood in germany and france which is hurting euro area rebound hopes. the stocks are struggling despite record highs in the u.s. , the dollar extending its rally to a six-week high. crude oil no longer rallying, down 0.3%. tom: lots going on. continues for mr. conte.rome with giuseppe this is something we saw out of china as well.

the trip to europe is very important and timely, given china-u.s. and euro-u.s. trade discussions. i want to bring up a chart which speaks to the bull market we are in, the boom market, all the good in capitalism. this is the dow back to 1999. where are we compared to the idiocy of 1999? here is 99 on a log basis. is dow equivalent 40,000. we are nowhere near the irrational exuberance. no irrational exuberance like in 1999. there is a bloomberg of where we are in this great old market. i will throw that out on twitter in a bit.

the book is so important that i thought we would lead off with it. is a columbiaz university lori at and he light -- laureate, and he writes books that are thinner and others that are more adult and serious. it is a required read for liberals and conservatives. 87 people running for president and the democratic party, has anybody read this? joseph: at just came out yesterday. say toat do you want to the democratic candidates? joseph: one of the things i want to say is that we can shift the market economy that has not been working for most americans, and with a set of new investments in our people and with new regulations, we can shift it to serve most americans.

it has not been doing that. wages at the bottom adjusted for inflation are the same as 60 years ago. the typical income of a full-time male worker adjusted for inflation, guys are the lucky ones, is at the same level than more than 40 years ago. life expectancy is in decline. obviously, there is a lot of power in markets and we need to redirect that to serve american citizens. tom: i want to keep going on this. in the back of the book, you have mr. trump from the washington post has lied 3400 times or whatever. i want to move away from trump go to the heart of the book, your take on american pressure. so to under eisenhower we beginning a --

massive program of advancement in science and technology. where did those republicans go? joseph: that is a good question. one of the reasons i mentioned that was that was a bipartisan bill. the high tax rate was 90% and it was the period of our most rampant growth. back and try to capture the spirit of cohesion that we had then, and recognize that the country cannot work -- tom: let's bring in francine lacqua in zurich. francine: i have been reading this, i was almost up all night, but i have not finished it. you go through the concerns on capitalism and there are these too big to fail sectors, not

companies. how do you create a new progressive capitalism that you talk about? joseph: there are many elements, one of which to recognize the problems, the concentration of market power. policy,to have renewed renewed antitrust. over the last 50, 60 years, we came under the influence of the chicago doctrines that markets are largely competitive, do not look at the conglomeration of power. we got more conglomeration of power, higher profit margins. the other thing i emphasize is even after we succeed in doing hard foris going to be many americans to get to the kind of middle-class lifestyle that was taken for granted in the 1950's.

we will have to reinvent some of our programs. tom: nobody is on the same page with you. you have a fabulous paragraph about this kid from gary, indiana, who went up against james meade, giant frank khan and others in cambridge a million years ago. that word is good -- world is gone. how do you sell the message in 2020? joseph: the meshing's we can serves a society which most citizens, not eliminating inequality but extreme inequality we have today. that is a message that will have a lot of resonance. my younger students get it. are soderstand that we much a richer country than in world war ii and the period of eisenhower.

if we could afford things like the g.i. bill which gave his much education to everyone who fought in the war, just about every male and a lot of women, as long as they could qualify to the best schools, we could afford it today. muchine: going back to too of the banks and the tech companies, would you break up the tech companies? what that help? joseph: it would help but it would not necessarily solve all of our problems. we broke up standard oil and got a more competitive oil sector. there is no reason we should have allowed face great -- facebook to buy instagram and whatsapp. that created more market power in the realm of social media. today with these network economies, the problems are even greater. we are going to need stronger

regulation to protect our privacy, to protect data from being used to exploit us. --are going to have to take we are in the 21st century and the solutions that worked then will not work today. the problem is we have not adapted our antitrust laws or competition laws to the 21st century, but we can do it. europe has been doing a better job than the united states. francine: we will come back to these possible new laws, joseph stiglitz, thank you. he stays with us. back in the black, credit suisse is trading business swings back to profit, sending shares higher. they say the global market is still viable. >> we are pleased with this performance and pleased with our people, particularly the global markets which have been under

intense criticism and pressure. ♪

♪ this is bloomberg "surveillance." its profit, but japanese carmaker cutting earnings to 2.8 billion dollars. nissan's car sales in the u.s. and china sputtered. a shakeup at morgan stanley's wealth management position affecting two executives widely seen as contenders to replace ceo james gorman. shelley o'connor will run a bank unit offering loans and deposit accounts and -- will be the sole head of health amended -- wealth management. alconis spinning off its

eyecare business, seeing profits growing by a single digit percentage. first quarter earnings coming in better than expected. novartis hasear, made three crucial acquisitions. we spoke to their ceo. >> what i do believe is you need a consistent m&a strategy. industry,anies in any they find a consistent m&a strategy in any market cap and that is what we want to do. viviana: that is the bloomberg business flash. tom: we are thrilled to have joe stiglitz with us. first, we need to go to a washington briefing with kevin cirilli. the headline today without question is separation of powers. is there an understanding in washington, whether it is mr. cummings or mr. trump that all

this will be sorted out by the judiciary? kevin: yes and no. to be honest, yesterday i was speaking with senior staffers in the republican party to house members. they were say -- they believe essentially this was already settled and if democrats want to pursue articles of impeachment, that it would backfire on them. i was also speaking yesterday with several senior staffers to house democrats, two members in favor of and preaching president trump -- impeaching president trump and those who are not. regardless of their opinion on the articles of impeachment -- tom: what about what i was talking about with mr. cummings and the tax returns? the headlines are on separation of powers. by thee an understanding

members of the house democrats and white house republicans that this will get sorted out within the judiciary? kevin: no, because the white house is not going to be providing the president's tax returns to the judiciary. they feel they have successfully blocked this virtually during the campaign. they have been anticipating these types of subpoenas and whatnot for very long time. you sovin cirilli, thank much, from washington. we will continue our discussion on washington balance of power with ray lahood on boeing and transportation. this is bloomberg. ♪

♪ bloomberg "surveillance," francine lacqua in zurich, tom keene in new york, and we are thrilled to have with those joseph stiglitz with a timely book, whether you are republican or conservative. it is conversation starting at the least. -- is joeen a liberal biden a liberal?

joseph: i think he is, in the american sense not the european sense. europeans use liberal as someone who does not want regulation. tom: now we have migrated over to social democrats or socialism or whatever. when will the social democrats over to joe biden and other moderates? joseph: there is a dialogue going on. a key part of that is to recognize the nature of the problem we are facing. raw consensus is that there is a problem, excessive market concentration and excessive market power is one of the key issues, and another is how do we make sure that all americans can have access to what used to be called the middle-class lifestyle? that is getting out of reach for a lot of americans, worried

about paying for their education, secured retirement, access to health care. it used to be called the bread and butter but it is more than that, it is survival issues. that middle-class is growing out of reach of an increasing fraction and will likely be so that no matter what happens to our gdp over the next 10 years. there will not be happiness and content with our economic plight unless we succeed in doing that. in the book, i try to show how we could do it once again. francine: we have the u.s. presidential election in 2020. what will people vote for? what do the american voters want? joseph: i think they want more of what you call shared prosperity, security. a lot of it is bread and butter issues, but they want more than that.

money inn in politics, politics, money and politics is becoming a big issue. in fairness, opportunity not only for themselves but within our society, because they see the kind of divides opening up in our society. a lot of very well off people look at what is happening and say, this is not the direction the country should be going. those will all be important issues. standard economic issues, issues washington, the swamp has never been muddier, and the issue of opportunity for all americans. francine: will democrats swing to the left? is it only a more radical democrat that has a chance of winning this? joseph: i would put it a little different. years know after 30, 40 of new liberal doctrines,

financial market regulation, globalization rep, that those policies have not served the vast majority of americans. tweaks, morelittle education here and there will not work. there will be stronger actions. there will be a call for laws,er anti-monopoly competition policy. there will be a call for doing something about health care for all. tom: how do you get it through a senate at a time when the electoral college is not going to everyone in the world? how do you get these hopes and dreams through? joseph: i think there is a hope that in 2020 the senate will also shift, may not happen. that is what will be necessary. i think people will realize that

if you were going to get a congress that reflects a vast majority of americans, because of gerrymandering in the house, because of the peculiar way we had two senators from a little of senatorsnumber as from california and new york, that we do not have electoral democracy. americans realize unless they come out to vote -- tom: joe stiglitz of columbia university, stay with us. tomorrow, francine lacqua. this is bloomberg. ♪

comcast business built the nation's largest gig-speed network. then went beyond. beyond chasing down network problems. to knowing when and where there's an issue. beyond network complexity. to a zero-touch, one-box world. optimizing performance and budget. beyond having questions. to getting answers.

"activecore, how's my network?" "all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast. ♪ tom: bloomberg "surveillance," francine lacqua in zurich with a better than good interview with credit suisse.

we are joined by andrew kessner. pieceshad to pick up the on one of america's great blue chips which has struggled out of see otto -- seattle, bowing. -- boeing. what is the goal of a delicate conference call for boeing leadership? andrew: i think the focus here on the investor side is not really going to be on the numbers from last quarter, or even going forward. we think management is likely to suspend its prior full-year guidance in's the updated guidance would require more clarity about the 737 max 8 timeline. they may not be able to answer many key questions given the ongoing investigation and

overall uncertainty about the timeline. they will want to convey confidence that their customers are sticking with them, that they do not expect to see cancellations in the future. everybody is just kind of looking for them to come out with an honest and open stance. know, $100 billion income. 20% operating this company is join or miss. -- ginormous. how big are the troubled aircraft divisions? andrew: it was set to be around 30% of revenues. at this point, it is looking like it will be about a six-month month delay on deliveries of those, so one way to look at it is this is a timing issue in those will be

pushed forward. they have a seven to eight year backlog on these planes. will there be longer-term reputational damage and are they going to lose future orders? point, allhis is the anybody wants to know is how quickly boeing can recover. if they cannot divulge details, how can they address what happens afterwards? it seems like a big mess. andrew: i think we could hear , if theysomething like could not give a specific date but say once the planes are back in the air, once everything is recertified, this is how long we think it will take to ramp up to full capacity, this is what will happen after that point. they will not be able to give a specific point in time. tom: andrew kessner with william

o'neill, thank you. right now, we will see ourselves to a first word news with vienna hurtado. and chinahe u.s. resumed trade talks next week in beijing with the goal of reaching a draft agreement in may. negotiation's will cover intellectual property, forced technology transfer, and enforcement. they have been stepping up diplomacy to resolve their dispute. kim jong-un arriving in russia for talks with vladimir putin. the crime and -- kremlin says consolidatery to the meetings with president trump. the leading conservative candidate in next month's elections has launched his campaign. the frontber is

runner to replace jean claude juncker. he spoke to bloomberg about one of his priorities. define whatope must we see is our key markets and defend them, and create a global agenda. viviana: global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. francine: thank you so much. let's stick with the future of europe and brexit. theresa may is considering a new tactic in her attempt to deliver brexit. parliament rejected her deal with the e.u. three times so she will try her luck with a piece of legislation that would and trying her deal in law. the clock is ticking and she will have to deal with european elections she does not get this through in time, and that could

be punishing to her conservative party. still with us is joseph stiglitz. , don't know what's going on because theresa may needs to find another way of getting this through parliament but not putting it through a meaningful vote. who would you watch out for to see if she can get it through, is it still labour? >> i think it is, but there is a challenge to her leadership playing out in this backbench committee of tory mps called the 1922 committee. they are split in half on whether to change the rules to allow another challenge to may, a no-confidence vote. as always, she is racing against the clock. the talks with the labour party seem largely performative.

there is little reason for jeremy corbyn to give ground because this is looking increasingly like a conservative party fiasco. to reach agreement, theresa may has to meet some of the labour demands, perhaps moving toward a customs union, but does not have the political clout to do that. that is deadlocked. she is trying to may be break things by bringing this to another vote, through another mechanism by implementing legislation next week. at the moment we have a situation where things are very much the way they were before easter, and it is obvious the tory party cannot accept a stalemate to continue where they have done nothing to replace her or find a solution to the brexit impasse. tom: thank you so much, greatly appreciated. cannot say enough about her wisdom on brexit.

with us is joseph stiglitz, out with a new book, relatively brexit free. , you mentionedok margaret thatcher, which all came out of unionism and trying timeeak the unions and the of the non-forward up to thatcher. it is not like that now. back bys flat on its any stretch of the imagination, and society does not seem bothered by that. why are we not bothered that we labourhave an organized given the diminished share? joseph: that is exactly the point. we have a share of labour that has gone down in the united states to exclude the top 1% of bankers. calls labor in statistics, it

has gone from something like 75% of gdp to 65% in a relatively short time. that is a huge change and one of the factors feeding into this growth of inequality that made the united states the country with the highest level of inequality in the world. unions played an important role in curbing these successes -- excesses, but they were making sure that companies were reinvesting the profits so that there would be jobs in the future. without the unions, what has had $1d, last year we trillion in share buybacks, money that could have gone into investment ranks. we have the irony today of high profit rates, returns on equity, and low investment levels. that does not bode well for the

future of the country, for economic dynamism. francine: you wrote a book euro." that sent waves across the euro area. given the difficulty that the euro cannot extricate itself from the e.u., is the euro dead or will it solidify it? joseph: the problems of the euro i wrote about then are very much with europe. you are seeing it even more strongly than the u.k., which is not part of europe, and italy, which has not had growth for two decades. the mechanism that normally would have enabled italy to restore growth would be a lowball -- lower real exchange rate. they cannot do that.

what we are seeing in politics as more and more anger at the euro and europe. the way this is manifesting itself is the growth in the extreme right parties, and parties which are anti-europe. the risk to me, over the longer-term, is the real risk to the euro and e.u. tom: i want you to sell these ideas not to paul krugman or senator warren, sell this to conservatives who are scared, and there are a lot of them out there. they do not like you but they like a lot of what you're talking about. how do conservatives trust you and other liberals to take us away from a gilded age? it, by realizing

we cannot continue to go on this course. you see the kind of anger you have in parts of america where the industrialized part of america that is not doing very well, where life expectancy is in sharp incline for what are ,alled deaths of despair overdoses, alcoholism. this is not a healthy economy in any way, so realizing the problems of trump is just the beginning. we could have a demagogue that is far worse than trump unless we address the problems. what all americans should realize is that trump has not solved these underlying problems. because he hasn't, the problems will get worse and they will get worse also because of privatization, ai. tom: technology.

joseph: you think we have problems today? they could get a lot worse. up, the former prime minister of australia, kevin in the 1:00 hour. this is bloomberg. ♪

♪ >> we are pleased with this performance. we are pleased with our people also, particularly in global markets, have been under intense criticism, intense pressure. we wanted to show this is a viable business that has its place in the economy, and it is working more closely, which we

always wanted. it is up 23% and is becoming better. part of ourat was interview with the credit suisse chief executive tidjane thiem. , saying it good mood was the first time he could smile about the prophets in global markets over one of the biggest concerns that analysts had, and also about the equity division. conundrum a great taught in the classrooms of columbia university, and our single best chart today. whether it is ned phelps or joe stiglitz or the former fed governor, they are all talking about the same thing, the failure of the european banking system. here, j.p. morgan normalized

back to 2016, the u.k. in mediocrity and deutsche bank, and outright failure. you have to clear markets. .hat is what america does best we clear markets, unlike their ability to clear markets in europe. joseph: deutsche bank has some serious problems. tom: fair. joseph: it did not figure out what kind of bank it wanted to be, whether it would be a money laundering bank dealing with people like donald trump. tom: allegations, to say the least, joseph: or whether it would be a real bank serving the needs of society. francine: how would you deal with the european banks? we talked about negative rates and tiering. if you think banks across the

world have too much power, i don't know if that also touches wall street, how does that reform the banking sector? ofeph: after the crisis 2008, a general consensus that we needed to do a better job of regulating the banks. there was also a recognition that not only regulating them not to engage in excessive risk-taking, but after the 2008 crisis we became aware we were engaged in lots of other nefarious activities -- market manipulation, excessive market power, excessive rents. the focus was all on preventing the banks from doing harm to the rest of society, not on ensuring that the banks actually served the rest of society. providing capital for new firms, providing capital for firms to

expand, the evidence is overwhelming, not only in europe but in the united states, the banks traditionally were called intermediation, taking money from the households and bringing to the corporate sector for more investment. modern banking takes money out of firms and into the households , limiting the ability to do investment. last year, we had $1 trillion of share buybacks in the united states. that is money that could've gone into investment to make our economy stronger. tom: every banker listening to this is going, this is a guy in an ivory tower. i have 4000 warm bodies at deutsche bank right now and they are behind. 20,000 or 30,000 will go out the door. are you saying we need to take care of those people as a liberal society?

don't we need to clear markets where those people through the system will find other employment? joseph: we have a dynamic economy. tom: we do that in america but they do not in germany. more broadlyrope, they have active labor policies that help people who lose their jobs find new jobs. bankers typically do not have much of a problem finding new jobs and the people who do are industrial workers. in the united states, northern england, lots of other places, those who lost their jobs in manufacturing did not find other jobs. they have become part of the discontent that has been so visible. tom: 10 seconds, we have to make some news. for you announced support one of the specific democratic party candidates? joseph: no, i will not.

i will try to articulate what all the candidates are putting forward. tom: i tried. i failed. francine: we will get professor stiglitz back on, joseph stiglitz. we will be speaking with more banking chief executives, the chief executives of barclays and ubs, coming up this week. this is bloomberg. ♪

♪ morning, everyone, bloomberg "surveillance." tom keene in london, francine the --g way back from zurich francine lacqua making her way back from zurich. their fabulous research program, one of the greatest things out there. joseph stiglitz, the nobel laureate who knows the only way to do macro economics is microeconomic foundations.

winner of the research challenge last year, which means he sits at the right hand of god. youris different about research now given the financial crisis and how you look at an income statement? >> that is a great question. thechallenge we all face is auditing profession has fallen hind the way that finances -- finance is conducted and practiced. useof the information they is non-gap financial reporting statements so there is a challenge, a research challenge to move without. it is still the core of what we do. tom: what you do is add incense to all of this and shake it around and hope you come up with an answer. is it harder now to a research

challenge when i see this extrapolation in technology, these valuations with no free cash flow? i don't want to pick on netflix, but is it harder to do a challenge? sam: it depends on your company. if you have a pure play company that does not do anything else, but you could be unlucky and have to do some of the analysis. what is nice is the tools have also evolved. the cfa institute is providing books and knowledge over time. tom: we have to stop the show. let me tell you the books and knowledge, the number one cfa that as well. is help us with the shadow economy. sam and the other students who get challenged do not know what is on the balance sheet.

it is no different now than 2007. joseph: that's right, and one has to understand part of the problem is the way ceos get compensated. when you have pay that is disproportionately due to stock options, they have an incentive to figure out how to get the stock prices up. tom: i agree. joseph: the incentives to obfuscate what is on the balance sheet is -- time.e ran out of sam wegner, a research challenge winner, and joseph stiglitz. they need a bloomberg terminal. ♪

comcast business built the nation's largest gig-speed network. then went beyond. beyond chasing down network problems. to knowing when and where there's an issue. beyond network complexity. to a zero-touch, one-box world. optimizing performance and budget. beyond having questions. to getting answers.

"activecore, how's my network?" "all sites are green." all of which helps you do more than your customers thought possible. comcast business. beyond fast. ♪ alix: credit suisse cautiously optimistic.

the european bank diverging from ubs on revenue. s&p and nasdaq hit fresh records and poke holes in the rally. is it fundamental or fear of missing out? and tech giant names drive the rally. what the market needs to see from google to amazon to apple as growth trumps value. david: welcome to "bloomberg daybreak." it is earnings week, and we've got them out right now. at&t came out a short time ago. in terms of revenue, they missed a little bit. the real story, i think, will be what happened with directv, with net ads to their service and things like that. they are really going down in subscribers. alix: basically the whole time warner thing. that is why they need the content, right? david: they need to content both further wireless and premium. that hasn't fully clicked