anna: disappointing day china's manufacturing could slow adding over economic health. investing going to rivals. vodafone may have found a 2009.ty fraud in how much damage will that do to t tech giant? "bloomberg surveillance." you are watching from europe, asia.afternoon from

these are the markets. urope 600 trying to figure out what direction we will see. 1%, a lot of . we should worry more about china and the flip hire pboc could add more stimulus. a lot of earnings news out of the took sector which is the data check and aussie 746 about a story bout commodities and dollar strength. we will speak to the founder and citadel. hat is exclusively later on this afternoon. to get to the bloomberg we go to new york city. >> first quarter revenue missing is sparking concern

advertisers are shifting from rivalless.ther evenue rising 50% but the slowest since 2015. reported a cebook 26% jump. a resa may party holding special meeting after more than 10% of local leaders called for go. to it is nonbinding but the grassroots backlash over potentially humiliating for the p prime minist refusing to e campaign before elections. no discussion on the potential over the one scandal with the justice department that goldman sachs chief executive david solomon after recommended the plead be required to guilty. employee. a rogue

they say it is not warranted. > we have not started discussions with the justice department. e are trying to focus on getting there settled for shareholders and clients. president trump trying to deutschebank and capital releasing his records saying it is to harass the rummage through his private life. and l news 24 hours a day twitter. ore than 2,700 journalists and analysts and over 120 countries. we are getting images from japan this is an historic day the news that the apanese emperor will under his due -decade reign tuesday

to health concerns to make way or his son in the first abdication of the chrysanthemu throne. we will see a lot of pageantry. 1-year reign which is peace come to an end with a ceremony of about 300 political leaders. prime minister abe starting to deliver his speech minutes.art ed in 45 omorrow his son who is 59 will ascend the throne in ceremonies at the palace. economic data china's p.34. p.m.i. in april indicating pace is footage.

the blackstone chairman says china's economy looks solid stimulus. he spoke with bloomberg in beverly hills, california. >> china has stimulated its economy like they said. i was there four weeks ago and at the central bank were saying it worked nicely and results re seeing the of that, which is surprise, some that china's economy looks pretty solid now, the sixes. 6% growth. i think that would have people, didn't particularly surprise me. in china the ability to really force money into their create growth and they are doing it and it has been successful. you putting more money nto china at this point as

blacksto blackstone, more heavily and where? company t bought a there. i think china is a harder place outsiders.for and you always have to be thoughtful when you invest. we are looking in the real as well and it all happens and what values are. chairman and e chief executive of blackstone. > we have this p.m.i. that was disappointing. they took it two ways saying concerned butd be it don't worry. international investors look at this continue to e and

ee a gradual recovery lake -- 2016 u shape not like with the boost from the u.s. developed economies. it will be slower but enough to sentiment and er next three months feed into some data that has been in. stimulus we see more or will the trade agreement be enough? has happened ot and i think it will be gradual. we have seen strong credit and i think there is enough in the pipeline to guarantee that gradual bottoming the economy. i waepsn't expect aggressive stimulus of chinese authorities. they don't want another round of

201 201 2016-2017. a will and means to put a floor. cut where you t. had some producers bring forward inventory production to benefit the higher deductions. is a derlying picture gradual pickup. anna: if we have defaults is because they are letting air out of the system? >> we are still in a system you are not getting deleveraging. he goal is to avoid further leveraging, try to deal with -- tamped down only try totivity and we will have orderly management of debts in places that are better able manage it but too hopeful to argue deleveraging on an gate basis -- aggregate basis. does that help the chinese margin?or is it at the

>> i think the main story is not much ade talks but legacy the big stimulus in 2016-2017 concern around financial stability and tightening of credit so mainly a domestic story. the issue with the trade talks s expectation in markets and conomic expect station for positive outcome. to the up side. google's ad talk low.ue flow sending shares this is bloomberg. ♪

francine: pictures from japan em-peeler he first ab ies cation in two century s stretching back almost three millenni millennialia. is a succession of ceremony that started about 12 emperor be a he of indicating after a reign 31 years. ascends t son 59 will the -- ascend the throne play 1. extending the annual spring holiday to an unpreced t dis -- days 10 off. at whether ing uests were worried about flash crashes. abdicati recedented

abdication. we will bring you news and padgettry. learned vodafone found in equipment. up to 2009 there were found bugs could have given them access to sensitive data. deeper probe in 2011 and later found back doors its italian in access network. were aintain the issues resolved shortly after they were released. involved say ces vulnerabilities remained beyond 012 and were present in the u.k., germany, spain and portugal. our telecom reporter who has been casing the story and team that broke did. great to have you on -- broke it. run us through the time line of

vodafone's discoveries. good morning from milan. has been a long journey and after months of investigation we some ly discovered that back doors were built into the rout eers and all of 2009 when tarted in vodafone in italy started a trying to investigate back door. vulnerability that could allow a possible attacker a networke control of desk -- domestic deal.k so it is a big huawei the company asked

to remove the back doors. it did it but after a penetration test that vodafone they found again the back doors. kind of issue persisted for the a least two 2011. in but after our investigation vodafone admitted they found doors in so-called b and g, the broad band natural gateway connected with the code network which is the d.n.a. of kind of network. francine: we will have plenty bloombergis fantastic story. i know it took many responsibilities of investigation. come onurge everyone to the bloomberg terminal and read the story. both huawei and vodafone they

part of the and formal process in testing and rolling out products. hey said software vulnerabilities are an industrywide challenge and when identified we take the action.ate corrective vote phone says it is not vulnerabilities in equipment it be identified by perators and if it exists vodafone works with that supplier to resolve it quickly. tech space in the falling shares are because of concern advertisers are shifting spending to digital rival. google is usually the first place looking for new products changed with new competition from amazon. hat is not only in digital search but the additional ad market. windsor s is richard

black ert harrison from rock. they pointed first quarter disappointed. what can they do to get back on track? is not a lot and hat has happened is that advertising on the fixed space and p.c.'s has slowed down mobile has continued. the good comparison is to amazon which grew faster but if you look at year over year growth in fell from 97% in q-4 q-4 1919. so people are less keen to advertise on p.c.'s and want to and becausen mobile google has the revenue split in suffers the consequences. francine: talk about samsung. they have to deal with huawei and from

and prompting samsung to report very soft results. >> it is a bit of perfect storm for them. while they benefited from the xpansion in small phones it is exposed to smartphone through display so mory and when the market slows all three get hit. of that the main impact on the falling margins halved was falling chip last 12 months learn in into their smartphones and samsung's ability to use volume as better e to get profitability has disappeared which is why the margins are mid to high single and that won't come back soon.

francine: these were some of the companies reported today but if ou look at facebook, some of the took companies bet expect station. hat is your take -- expectation. >> there are some i hdiosyncrat the issue for google is the concentration of revenue n the advertising space one of the morse cyclicly exposed and broader results so far i think it gives us renewed onfidence that in an environment slowish but steady models hese business continue to generate incredible rowth rates with strong stand ositions and there is some divesting makes meity you look across the market it is a sector to own. ones that did the make money? stories are going to be with each earnings event, but

whole tor as a there is ly u.s. tech earning potential and standout business models compared to much the world. of i would say in some other arkets particularly europe there is more cyclical sectors confidence pport around global growth in a sluggish growth environment with contained it is still something investors will want to own. francine: do you worry about evaluations? torial meeting that -- sir can ir can 2000. google, it is not too challenging. challenging t very in terms of evaluation. some of the old names i still i look at d but if ome of the newcomers like lyft

and potentially evaluation uber will come to market with that is when i feel more nervous because investors are being asked it pay for businesses that makes noform money has no value. it has to make money at some point. without evaluation so i'm nervous about the outlook i.p.o.'s.of those two francine: richard, thank you so much. continue with rupert harrison. new tightening cycle is possible. it have any implications for the economy. ♪

francine: breaking news turkey entral bankers says the new tightening cycle is possible. 59618.ly you see if we go back to my bloomberg go back to 2012 it has een quite a ride for those invested in turkey. start a new tighten ing cycle but so far they have not. >> that chart shows you how long-standing this problem is. model that for the last five years has been unsustainable and tphrorts is shown an u

to get to grips with the issues. think a little bit of tightening short term could lead to relief but fundamentally neededed big changes in turkey and it is hard to see ow this gets resolved without some external support. francine: for a currency trader truth that ment of we need words but investors want turkey? from >> they can probably engineer a rally.term a lot depends on the broader environment. we have seen the dollar being environment where u.s. growth is resilient. if there is a benign environment be a short-term out. ♪ ♪

francine: economics, finance, politics. i'm francine lacqua in london. turning to oil after the u.s. spurred higher prices by

tightening sanctions on crude, prices are back down to where they were before the announcement. what is on the agenda this week? >> it is a busy week for earnings as well as geopolitically for the oil market. runis in its longest bull in 13 years. the latest data on where positioning is an oil market shows that hedge funds are betting almost 14 times more that prices on wti will go higher versus lower. side, we havete heard from petrochina. than expected production earnings that offset some weakness and refining. we also heard from bp today. the big takeaway was boosting the cash flow. the first quarter earnings as well as on thursday, iranian sanctions are back and play. president trump will not extend the waivers to countries currently importing crude from iran, greece, india, japan,

south korea, taiwan, and china. it will be a busy week on the corporate front and the geopolitical front. >> let's get straight to the bloomberg. it is viviana hurtado. -- here is viviana hurtado. europe's biggest phone company identified hidden backdoors as early as 2009. the company says the issues were resolved but bloomberg learned vulnerabilities remained an equivalent present in the u.k., germany, spain, and portugal. china's manufacturing gauge flipping in april. standing at 50.1 just inside expansion territory. it signaled the economic expansion seen in the first quarter that remains fragile. in the first quarter, china's growth with stronger than expected but there is no clear sign of a trade deal with the

u.s.. some policies proposed by democratic presidential candidates could slow the economy according to stephen chiefzman, the blackstone executive. they say the change in policy could be a shock to the economy. laid out criticism of the federal reserve. exit the fed is the guardian of the system. they are not the enemy of the system. if we had gilad -- if we have a lot of wage inflation or something else that seems unlikely and they start increasing interest rates, it's probably because it is a smart thing to do. chartered willrd buy back $1 billion of its shares. this is for more than two decades. it comes after the over $1 billion settlement of u.s. regulators. this was over repeated violation of iran sanctions.

we speak to the cfo of standard chartered. you don't want to miss that interview at 10:00 a.m. london time. 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. i'm viviana hurtado. this is bloomberg. francine? francine: let's focus on the u.s. chief executive of goldman sachs says jay powell is doing a very good job. don't expect a lot of policy activity as we had to the rest of 2019. >> throughout the quarter, activity levels improved. a little bit of a speed bump. the government shutdown. but the economy in the u.s. has continued to deflate. i think you saw a little bit

more of a move back into risk assets. as you get around the world, the stimulus in china has helped see a little bit of improvement a couple of weeks ago. the overall package, especially with the pivot that central , it has been quite constructive for risk assets. it is certainly at a pretty nice level at this point. the pivotyou think and they resulted had in financial markets is going to affect or influence the way central bankers think about policy going forward to the rest of the year and 2020? >> policymakers have been really clear on their communication as policy looks -- >> you could make the case back in october jay powell might have screwed up a little. >> i think the chairman is doing a very good job.

i think it's a difficult job. it does not look like there will be a lot of policy activity as we had to the rest of the year into 2020. the economist predicting one increase late in the year. i think he is very cautious that you could see a cut. right now, the economy is chugging along. the policy will be relatively stable. >> one of the places you see the isact of stable policy credit market. >> credit markets are pretty constructive. money is easy. banks,u look at the big their participation in the big scale credit markets, i don't think there has been movement in credit standards. when you get out of regulated institutions, there is not a lot of capital moving in that direction. there is transparency around

that activity. that is an area to watch. >> a problem? >> i don't think it is systemic at the moment. but it is an area to watch. when you think about that space, some of the capital is longer dated capital. those shadow credit markets grow, i think it will be and monitor.watch the regulatory environment has pushed more credit lending in that direction. that is something that i think will be a focus. >> what is the better alternative? that regulators pay closer attention to the shadow banking market or they change the rules to allow them to regulating yours?tes like years -- it is a balance. maintaining a balance and transparency will be important for the markets. business leaders are part of the

business. and regulators are, too. that was david solomon speaking to erik schatzker. it's keep the conversation on the fed. we had a gdp figure. it is unclear what the likelihood of a fed rate cut really is. are we suddenly going to see more information? >> the fed were hoping is here to talk about -- hoping this facing the talking about credit. and now there is a short-term collapse that they were not expecting. there is an insurance cut in rates? i am dubious about that at the moment. the underlying strength of the u.s. economy makes it difficult for the fed to cut rates. but i think it does lower the bar for any week data -- weak

data being enough to justify a rate cut. look at the usually u.s. financial conditions, but we have amalgamated the average u.s., eurozone, and asia. what do financial conditions around the world look like? rupert: they look ok. this is one of the reasons to be relatively reassured after global growth. a combination of growth shock and concerned that monetary policy would remain to tight. and a think both of those things have reversed. the central bankers around the world healthy inflation .nvironment really pivoting i think that is giving economic conditions in markets enough confidence. when they come under attack

from president trump, should we worry about independence? where is it earnings? rupert: the biggest problem is that they need to generate some inflation. shouldn't worry too much. the institutions for the federal reserve and the people already there, i think we have seen the difficulty that president trump is going to have appointing people to do his bidding. is central bank was supposed to be targeting inflation. that has long been the problem in europe. it is increasingly a short-term problem in the u.s. they are scratching their heads about what to do about it. francine: but they have been scratching their heads for 24 months, right? rupert: i think the fed saw what was going on, which is why we see this talk about inflation averaging and justifying a bit

with overshoot. and suddenly, it is not coming through. as long as the economy remains .obust had some breaking news from standard & poor's, the s&p raising credit to triple b plus. stay with surveillance. plenty coming up including a look at european bank earnings. we have seen market value shrank after disappointing results. and we will talk hsbc. this is bloomberg. ♪

this is bloomberg surveillance. i'm francine lacqua in london. some missed estimates due to money laundering scandals, but they offer some pretty encouraging news for investors. standard chartered announced a $1 billion buyback to put troubles behind it. senior banking analyst at bloomberg intelligence joins us. it rupert is still with us. we thought last week was busy but today is also pretty busy. what is the standout from standard chartered? they are buying back, but is the strategy working? >> it is a decent set of numbers across the board. there has been a restructuring play for a couple of years. if you are doing buybacks, you say you don't need to find that much growth. how do you rate restructuring capital return play?

it is positive. -- up-stake 7% surprise to me a little bit. it does mean we need to be more cautious on the top line. how would you break it down? we had swiss bank last week. are they doing better than the rest? europe is a horrible place to be. topline revenues are still kicking down. at least you have the currency working over the euro. hsbc, the focus will be on the and they'll struggle with revenues as well. in the past, we talked about italian banks. what will be the catalyst for valuations and central-bank policy?

is it consolidation or are we looking at earnings? need some solid consolidation and changes to business models. you can see the support bottoming growth. this concerns over the next few months, it can support banks. but in europe, these models are fundamentally challenging. it can be a tactical play over the short term. .rancine: but they look cheap jonathan: it will get more expensive and they still made the funding. restructuring. i would not say they are cheap. francine: when do we consolidate? the commerzbank deutsche bank merger is no longer happening. it is unlisted.

in spain, there is room for a little bit more. the bank of bpm is an interesting one. there are plenty of still reasonably distressed plays that were cleaner than they were. i think they are still cleaning house. francine: how much with these banks and the banking sector be mario draghicb -- saying that we can go more negative. what does that mean? >> investors have been downplaying. the fact that they are having to talk about ways of getting rates lower is a bigger negative. you still have this very subdued inflation picture, that is structurally a very difficult environment for banks. that will not change. tiering will not change that.

francine: thank you both for being here. stay with us. theresa may faces a new challenge over her handling of the brexit from the eu. we get all the details next. this is bloomberg. ♪

francine: economics, finance, politics. this is bloomberg surveillance. let's get straight to the bloomberg business flash in new york city with viviana hurtado. chipna: a rebound in prices is a cautious prediction from samsung. they got it outlook from the tech giant posted a first-quarter profit that missed estimates. for thee latest setback company dealing with issues with their foldable smartphone. telling bloomberg he is buying nonperforming loans in the country. they are hitting multiyear highs. this increases the risk to chinese banks as the government pushes them to lend more. knowing says it did not

intentionally deactivated sensor alert linked to two fatal accidents, but the company acknowledges it did not work as represented. it only functioned when operators purchased a separate optional indicator. as part of a planned update, boeing will activate dealer on all new models. it will also retrofit planes for no additional charge. that is your bloomberg business flash. francine: after a short break, brexit back in focus in the u.k. theresa may facing challenge from activists. vote onts tories will her future at the emergency meeting of the national convention. the labor faces brexit divisions of its own. lawmakers are calling for a place to support a second referendum and jeremy corbyn is hoping to keep that as an option rather than a commitment. the chief of staff knows a thing

or two about politics and how the markets view politics. where are we? we have the extension until october 31 and it is not really talked about. his theresa may going to be toppled? is the main issue. the underlying brexit process has been put on hold with the pushback of the deadline. the things that happened are things that need to bear in mind. and when push comes to shove, the european group will probably agree to another extension. but all the action in the conservative party, thinking about the maneuvering of when theresa may is going to go and who is going to succeed her. the live people that can really decide to get rid of theresa may are the 19 to 22 executive committees that rejected a proposal to change the rules so that she can be challenged again.

but if the result of the election is really terrible. we could be into leadership election over the summer. francine: this would be before brexit is done. who is a likely contender and does it make a difference if she is ousted after or before? is crucial. all the signs are that we are going to have a leadership election before brexit. that means a leadership election will be all about brexit. it definitely favors a pre-brexit candidate. boris johnson is the favorite at this stage but there are candidates like dominic rob. i think the main thing that happens is an election risk rises because you have a prime minister that could potentially set no deal is official government policy that would run straight into conflict with parliament and trigger an impasse. if boris johnson

becomes prime minister, you're putting the chances of a general election at 50-50? rupert: right. it is unlikely that any new prime minister will be able to pass a deal. we can always get a massive surprise but it is going to be a positive. the deal is still stuck and the issue is that the prime minister in that situation will say that we're going to go for no deal and there could be another piece of legislation saying that you could do no deal. if the policy is in direct conflict, we have to have a general election. francine: can we be sure that a prime minister that is pre-brexit could not to say that let's get out? we know there is a majority of against that. so you have policy running up

against pollack -- parliament it is more than willing to pass legislation. you have a real constitutional issue that could lead to election. i think the other way you get an election is you elect 10 or 15 conservative members of parliament that are against no deal and potentially willing to bring down the government and trigger an election rather than run the risk. francine: if we have a general election before december of 2019 , do the polls stand? rupert: that is an impossible prediction to make. he is a much more divisive figure. and we have this much more complicated political landscape. we have at least two new parties. will be anow if they force in the general election as well as european elections.

the u.k. group could challenge the labor vote a little bit. if they call themselves the european party, will that make a difference? rupert: you have this split on the remaining side where you have liberal democrats and the labour party trying to straddle both sides of the debate. it is making it much harder for the remaining parties. francine: they key so much, rupert harrison, blackrock multi-asset strategies portfolio manager. the continue in the next hour, tom keene joining me from new york. chiefl be talking to the investment officer of standard chartered. this is bloomberg. ♪

francine: disappointing data.

chinese manufacturing pmi is lower over concerns and investors she killed her. of the bed comes up short. investors worry that spending will shift. and vulnerabilities going back here. it do todamage will china's tech giant? this is bloomberg surveillance. if you're watching from asia, tom keene in new york. of data.bit tom expanding the 0.4% for the euro area. of datais a little bit that goes back to this remarkable thing that we saw in u.s. gdp last week. economy and a separate external economy. it looks like the european economies are actually doing ok. will focus on trade and china. we will look at the gdp figures.

but let's get straight to the bloomberg first word news in new york city with viviana hurtado. viviana: we begin with a bloomberg scoop. china's hallway -- while technology is denying rumors a china spy on u.s.. vodafone says flaws could have huawei access. weressues they say resolved but the information may damage their reputation. trade to wrap up a agreement. steven mnuchin telling reporters that he is looking forward to having inductive discussions. leading a chinese trade elegation to the u.s. prime minister theresa may facing another child from her

own conservative party. members signed a petition opposing her leadership to force an emergency vote on her future. she will face judgment of local party leaders and senior grassroots members. the vote would be nonbinding but potentially humiliating. of off the bat falling. it is leading to concerned that advertises are shifting some of their spending to digital rivals. climbing at the slowest pace since 2015. 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. under the honor hurtado. this is bloomberg. equities, bonds, currencies, commodities. futures come in really quiet. the euro 112.08. careful launching with a nice uplift.

next screen, please. the vix with a 13.1. the dow 26,000 554. the yield, 2.29%. , looking for aup rate cut. i threw turkey in there with some movement. european stocks are struggling to find a little bit of a direction. the world's biggest phone maker and google parent off of that both of the point of investors, treasuries arising with the dollar before the fed policy decision. it will be the market thing that everybody will be looking at. the two-year yield goes up to the fed meeting. this is back 20 years.

this was actually a real-year-old. a little more here and briefly here. of a negativeime real yield. we come out of it with a crisis and a little bit of a rollover to get everyone's attention into the fed meeting. look at: i decided to chinese pmi. this is interesting because they were at play with asian markets earlier on. there was worse than expected pmi figures. you can see the nonmanufacturing pmi in blue. isically, what it shows us that domestic demand seems to be resilient. there is some resistance when it comes to trade. standard chartered is buying back ordinary shares.

the purchase plan comes weeks after a settlement between the bank and u.s. regulators over repeated violations. we are delighted to be joined by a chief financial officer that says we're back on returning capital. so much for joining us. is this turning a corner? have significant is this? -- how significant is this? that what you set out to do has been done largely. is a reallyt important step along the journey. just over three years ago, we had a rights issue. we spent the last three years getting the group on a better footing and this is the last time we have been able to say that we have enough capital. i think it is already a significant step forward. is it the end of the i'm noturing phase? >>

sure any business really finishes any particular journey. but what we have done is made huge strides forward. toting the business back growth. the financial returns are not yet where they need to be. and we are making good progress down that road. >> how do you grow the business? >> we gave the next plan which was basically to take the returns up to double digits. over the next two years, the focus is on getting to temperatures and returns. us from aill take negative to a 10% positive. not that the job is done, but it will be a significant landmark for us. with the asian focus, you and bill winters were handed a train wreck of legal issues.

what is in play so that standard chartered won't have the legal challenges of the past? we have sorted, as you are aware, some legal issues that were there for a number of years. it is really good that that is now behind us. think the business is fundamentally changed. over the last several years, we have put in place so much more focus on anti-mentoring -- anti-money laundering. we are in a much different position. people know it is really important. we are on can tell, different footing as we go forward. the journey might be great, but the journey is technology. how do you compete with big american banks in asia for technology investment? or is it management to have the

bank taken out by a giant? >> it is not the latter. a are a unique business with unique franchise and we have been spending a lot of money recently on technology. that will continue. there is no need to be keeping up with the biggest in the market. fundamentally changing the bank, opening up new digital operations. the business is moving forward and we are doing fantastic on our own. virtual bank in hong kong, how much market share is that getting? how much is it disrupting retail banking markets, local banking markets? >> where one of three players. we will be targeting markets

that we don't address at the moment. is a pretty strong business in that country. how much do we spend on digital products and digital disruption? >> in hong kong specifically it would be billions but we have increasingly doing things in other countries. it will be another four at the end of this quarter. tom: the great asian bank has really been a difficult journey from 1997. up we go.

how do you break out of the ? wntrend european banks of had so much trouble making the back. what is the path to getting back to decent shareholder return? >> the path is exactly the one we are on at the moment. making the most of the natural growth. of the fastest operating countries in the world, having a safe balance sheet. we can actually make returns. if we can get the business to double-digit returns, we will have a fantastic bank. i love the description you

are giving but it sounds like you are setting the three-year path line from journey to merger. .ou guys have true em expertise no one else has your asian em african abilities. you have to the ripe for a major bank to acquire their expertise. >> we will get it to where it needs to. what is your outlook for business this year? >> i think on the back end of last year, there was a lot of nervousness about where we were going. people were slowing down waiting to see what would happen. it is more of the sense that a sensible solution will be reached. people are starting to react a little bit more.

francine: what kind of position will you be for m&a and consolidation across the world? position to beer and when the bank is profitable and returning capital. it is a step at a time. francine: thank you for joining us. coming up, a conversation with -- look for the interview at 11:30 a.m. in new york, 4:30 p.m. in london. we will talk about treasuries and we will ask about the world economy. this is bloomberg. ♪

tom: dana morris is with us right now. there is no other topic right .ow except the two-year yield it grinds down, there is a market that. part of the markets waging in or calculating rates. discuss that. is it feasible that we get a rate cut down the road from mr. powell? >> absolutely. i think it will depend on what the rationale is. if we need a rate cut because we are worried about growth and we need to support the economy, it is a typical business cycle. i think we know that particular playbook. what might be more interesting and optimistic this time is that if the fed gets to the point that they are contemplating a cut, they are doing it because they realize inflation isn't

coming back despite really good growth in america. and so it is going to be a way for them to really support or get inflation back towards the target level as opposed to cutting rates. tom: the you have a more cautious and tempered view? negative realr yield? and a continuation of negative rates on the european continent? daniel: we have been getting used to this, lower for longer. is it lower forever? developed markets, inflation certainly seems to have disappeared. we need to take into account the structural impact of technology on inflation.

the cpi metrics of inflation are falling. advantage. real overall, do you look at earnings by sector? do you look at earnings by region? you have not had a bad quarter at all but forward guidance has been difficult to suss out. a littlet has made us bit cautious. it really started in december. despite what seems to be not such a bad environment, companies are not raising their outlook. withis what makes us feel earnings season to be good that it will be much better. is that? but why is it lack of visibility, global growth, or something else? daniel: you wonder to what degree it is psychological. quarter, we were talking about the risk of a

recession in the u.s. it seems quite silly after this gdp print, but it is still on the back burner. good.lly can't be this many times have we heard that we are at the end of the cycle the last couple of years? it is probably making people less optimistic but it is not a bad position to be in. ceos to become too exuberant and make investments that turn out to be powerful. tom: extraordinary pricing by the market. extraordinary polarity. it is truly remarkable. esther morris with us from bnp paribas. i want to tell you -- mr. morris with us from bnp paribas. i want to tell you about anadarko, occidental, chevron -- we would never be that rude. morning. this this is bloomberg. ♪

viviana: this is bloomberg surveillance. let's get the bloomberg business flash. earnings surging in the first quarter for airbus. the european playmaker -- plane production.d up it is a rival to the boeing 737 max. almost 40 fold. bp boosting cash flow and hitting the target our profit estimates in the first quarter. rising oil and gas production offset the impact of lower prices.

the british energy company said results were boosted by a strong trading performance. tesla reportedly will/prices -- prices according to the new york times. tesla will announce it is selling solar panels and related equipment for up to 38% off. be required to buy online. it shows tesla has not neglected its solar business. francine, tom? tom: we have daniel morris with us from bnp paribas on the desk in london with francine. as we look at the fed. as we look at america. but the issue is the massive outperformance of the american economy. can you model a european recovery? daniel: probably not in line with what we have seen so far in america. i think the key thing for europe will be what happens on the trade front.

if you look for europe and consumer demand, it will be solid last year -- it was solid last year. it will be solid this year. the big change from 2017 to 2018 was the decline in trade. you have to feel that it will turn around this year. a lot of it will depend on what happens in negotiations with the trumpnd china and the administration. what they decide to do with europe. that will be the variable that determines how well europe does. tom: do we need a headline across the bloomberg that says the fed won't raise rates until hell freezes over? he could. but the issue for the fed right now will be one of credibility. we had a message last autumn that we were a long ways from neutral. we were putting into hikes to three hikes this year. this year, we're talking about a cut. if it needs to start talking about credibility before making statements on policy several years in the future.

francine: and mario draghi has a tough job because he is talking rates.iering negative how do they get out of this mess? saysl: what mario draghi right now is not necessarily what the markets will be focused on. the challenge will be, almost inevitably, what will be more hawkish. you have an environment in europe where we are disappointed with growth. we are disappointed with inflation. and whatever takes monetary policy, if you have on margin policy that is tighter than it was before, you have to worry. tom: -- francine: what does that mean for stocks? they are disappointing but they are all outward looking. daniel: there is plenty of value. there are multiples in europe. what kind of earnings growth are you getting behind that? earnings season has been good.

asset #not been so bad. numbers have not been so bad. if you want to take that bet, that is the angle you want to look at. francine: thank you. stay with us. the goal shares fall after -- shares falling after reporting slower than expected revenue growth. we will look at apple, google or alphabet. all of that and much more to come. this is bloomberg. ♪

♪ day,tuesday before fed francine lacqua in london, tom keene in new york. our first word news with viviana

hurtado. viviana: president is escalating the showdown with democrats in congress investigating his finances. he sued deutsche bank and capital one to keep them with complying -- from complying with subpoenas. you hold the key to the white house in 2020, that is the message from joe biden to rustbelt workers who elected president trump. the former vice president is trying to highlight what his team sees as an edge he would have over democratic rivals. a video showing the mysterious leader of islamic state -- is not dead. he tries to rally his followers. he also makes reference to the easter sunday attacks in sri lanka. there is speculation he has been

hiding in the desert. the emperor is ending his three year reign because of health problems and making way for his son in the first abdication since 1817. tomorrow, the crown prince will become the emperor. the first toas reign under the postwar constitution that made the role of the emperor strictly symbolic. 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. tom: that was a wonderful summary of this historic moment for the people of japan. hido didback to what aka after his father, who was not scarred but so measured by the experience of world war ii that we forget what it was like for a

young man to come in and take over from another generation. francine: we are looking at live pictures coming out of japan, seeing its first imperial abdication in two centuries. these are not live pictures. we are looking at live pictures in the last hour. tomorrow, his son is taking over. extraordinary images right now that we see as well. let's switch to the earnings season, and the earnings can be the under performer. when you look at the performance of netflix, facebook, amazon, and the rest, it may be alphabet or google. here is their cfo. >> let's continue to grow at a substantial pace in the fourth quart does first quarter.

-- first quarter. 2018,s we made in early which we believe our additive to the user and advertiser experience. tom: to gain perspective on the future for google/alphabet we david kirkpatrick. let me cut to the chase because of time. when does this company get more mature and start buying things like twitter? david: what a great question is start out. they probably will need to buy some substantial things in the not distant future if they are going to continue to retain the enthusiasm and excitement that has characterized their history. i would say soon, great question. employees, i am not

sure people are sure of the sheer size of google. david: does not seem to be doing as well as we would have expected. they disappointed on a number of counts in the earnings yesterday . the real question is why. i am not sure it is entirely clear, since facebook showed continued record growth recently, despite their problems, which surprises money. -- many. it is perhaps that google is still getting so gigantic that they cannot deliver the kind of steady, profitable growth we have seen for so much of their history that has changed the world. francine: how can google or alphabet refocus? tom, in his typical penetrating way, has suggested one way, to acquire things.

the fact that they do not really have an active ceo for the so-called alphabet company is a serious problem. larry page is nominally the ceo but we never hear from him. the company is essentially felt rated as google and i find that strange. it is clearly a company that need some leadership. they are spending money on things that have nothing to do with their business. francine: i was looking at the numbers, and we understand that the advertising from pcs are stagnating and google unlike facebook has 50% of its revenue coming from pcs. how quickly can they change that? david: that is a tough question. i don't think they can change it in the sense that they will continue to get a lot of their ads from pcs, because that is the nature of their business.

we are obviously moving toward a mobile society, but a huge number of professionals are still on pcs. the question is whether google can fundamentally take a new approach to its business, which i do not see happen unless they did a catalytic, transformative change. tom: i love your words, all of these four are and five syllable and five syllable words. they need to be like apple and start acting like an adult company. when do we get a dividend? they need to become the blue-chip stock they are. david: we have that does we should have that soon. it is a good question. we need a dividend. we need more mature leadership

and focus, and we are not getting it. tom: we are back to kirkpatrick's classic. community adjusted ebit daw, now , now kirkpatrick -- ebita david kirkpatrick on we work. david: we are in a new bubble mindset. i am very concerned about all these companies, including lyft and uber and we work and maybe slack, that are going public, no profits, and they kind of just reallybecause we are a cool central service for society and they have done great with massive funding, that we deserve to be a public company and trust in should have our long-term growth, which they have not shown they can do.

we work as a great company a lot like uber and that it is delightful to use as a customer, but they do not have a business. francine: is it a tech company? if it is not, it literally feels like 20 years ago goldman sachs calling themselves a tech company because they were goldman sachs.com. david: what is a tech company is very much in flux. every company is a tech company. the real companies -- tech companies are cisco and huawei, for better or worse. these are service companies that use apps and software to deliver their services. that is not really a tech company. they are no more a tech company than ge or forward. kirkpatrick, thank you so much.

affect, daniel morris will read every word of it. he is with bnp paribas. translate ebita. 3m will be interviewed by bloomberg and you go down the statement and there is earnings before interest and taxes and you pull the balance sheet as well. do these companies have any hope and prayer of ebita? daniel: it depends on how much faith you have and your time horizon. how much premium are you paying for future profitability, how long will you wait, and how long in the interim? if you think about other companies, industrial companies or other sectors using technology, investing in technology, we can see that in profitability.

is services companies, it more ephemeral. francine: do you like technology in general? where do you see a good opportunity? daniel: two sides to that coin. pretty much every other sector in the economy within the index is having to invest more and more in technology. that is a benefit for the technology sector itself. the out book test outlook has got to be positive. on the downside, we are seeing with amazon that decreased profitability -- increased profitability comes at the expense of someone else. as an investor, the challenge is to buy the slice that is getting bigger. morris of bnpel

paribas joining us. we will have a conversation with ken griffin. look for that interview at 11:30 a.m. in new york, 4:30 p.m. london. ♪

♪ fed is the guardian of the system, not the enemy of the system. >> i think the chairman is doing a very good job. it is a difficult job, but as you look forward, does not look like a lot of policy activity as we head into 2020. >> the fed is in a good place. valuations are high, but people need to invest. >> interest lights look like

they are gone -- rates look like they're going up but not at the current time. >> if we have a lot of wage inflation, it would seem somewhat unlikely, and may start increasing interest rates. most probably, because it is the smart thing to do. tom: at the milken institute summit in beverly hills, ceos well,economists as they opining on the fed meeting. you have got to love the ceos. i do not know whether they want higher rates or lower rates. the president wants lower rates. have you ever seen this polarity? ofiel: it is a reflection the current economic environment and what happens to inflation when you have growth as strong as it is. economic models over the last

1500 years tell us if you have unemployment under 4% and rising wages, you should see a rise in the economy. we are have inflation falling, and there is a lot of different interpretations as to what it means and the indications. tom: is this a technology overlay? productivity, capital, and all the rest, their total factor analysis, is this just technology overlay and we do not know what to do with it? daniel: fundamentally, that is a big part of it. rate we willwth not have enough drivers and we will have too much demand relative to the supply. apps and and sharing such, we are able to utilize the assets more efficiently and get

further growth without the increase in inflation. it is that paradigm shift we need to think deeply about. francine: where do you see dollar going from here? how does it underpin our business strategy? monetaryn terms of policy globally for central banks, that will happen. interest rates are flat and going down, so you will not see much of a differential driving currency so it will come down to growth. 3.2%.s., i think the growth differential will benefit the dollar. tom: daniel morris with us, and we will continue. dudley inceo robert the 9:00 hour. worldwide, this is bloomberg. ♪

viviana: this is bloomberg "surveillance." standard chartered will buy back as much as a billion dollars in shares. that will be the first

repurchase and more than two decades. the first quarter results showed a 10% rise in profit. rivals andning cautiously predicting a rebound in chip prices second half of the year, after a first quarter that missed estimates. the company is dealing with falling memory chip revenue. samsung was embarrassed by the delay of its highly touted foldable smartphone. we work is planning to go public, filing paperwork confidentially with the sec. they rent office space. it would likely be the year's biggest ipo after uber. they were valued at $47 billion but last year, they lost almost $2 billion. the prime minister,

theresa may, facing a challenge from activists in her conservative party. grassroot stories will vote on her future at an emergency meeting of the national convention. the labour party faces issues of its own, lawmakers calling for pledges for a second referendum. david merritt is and daniel morris is still with us. what is going on? the only real question is does theresa may survive or not? is there anyone apart from this 1922 committee that can get rid of her? david: that is not a question of when is she going to go. she said she will not fight for that much longer. it is a question of how soon will she depart downing street? we will have elections this week and it will be a bit of a

bloodbath. it is not unusual to lose city counselors and to go on to win general elections. we are in slightly different waters now and we are looking forward a few weeks to the european elections, which will be a headache for tories and a reminder of the government's failure to deliver brexit. farage leading- the charge. francine: does it make a difference if it happens before an agreement is signed on? david: it will make a big difference. the has got to be talks. seemingly going nowhere. all the urgency has been removed. maybe a change of leader. the tories will not pick a

lead if you look at the parliamentary party and the membership. it will be someone on the brexiteer leading side -- leaning side who will come back with a completely different approach that will change the direction of travel. tom: i am fascinated by the local elections. what happens friday morning? what happens thursday night at 10:00 p.m. when they have the bbc's super map out and they are doing labour and the tories? what would you expect happens? election, it is really back to the more traditional tory labor fights -- tory labour fights. you will see the conservative hemorrhaging seats. historically, this is par for the course of sitting

governments. late under tony blair, saw this happen. it is not rare for there to be that sort of swing. people losing their constancy are the activists, the real grassroots of the party, and they are assembling to try to dislodge the prime minister. a lot of disaffected people on friday morning. is that enough to spur them to push her out the door? grassroots ofthe mr. corbyn's party? to the left or moderate? david: the story has been he is party to theabour left. ed is farther to the left than anything in british politics, and they are calling the meeting -- calling the shots. at a meeting, they will decide

their policies for the european election and the question, do they back a second referendum? if we saw a shift -- and mr. corbyn is against that, but many activists want us to see that vote -- it changes the game because the concept of another referendum, a second vote is back on the table. francine: we have not talked brexit for the first week just for an entire week. -- for an entire week. what does that mean? daniel: in europe, generally speaking, volatility is falling back. brexit is one factor. we can have this timeout and forget about it, we know it has not gone away but we will pretend it is not there. you see that feeding into the background, with the decline of protests in france and germany,

some of the words agitating us seem to have faded in the background. tom: daniel, thank you so much. daniel morris looking at the challenges. david merritt, thank you so much. we will look for coverage on the local elections. we will move forward the conversation on the two year yield and what it signals for the path forward for chairman powell. joseph quinlan will join us. we have got much more in the next hour, martin shanker on the joys of washington. this is bloomberg. ♪

♪ tom: this morning, the u.s. two year yield grinds lower.

the divide between the fed growth optimists. a market betting on a rate cut to come. trump and trump family versus deutsche bank another's. all their attorneys call maxine waters' actions illegitimate. ando in search of community ebita.d ebit dara -- this is bloomberg "surveillance ," life from new york i am tom keene, francine lacqua in london. yesterday, andin today, the view of italy. francine: italy coming out with first quarter gdp where it has grown 0.2% quarter on quarter, emerging from a recession. when you look at the economic

breakdown of the figures today, the chinese pmi was worse than expected but overall euro area gdp better-than-expected. that is something we will have to delve deeper into. momentum exceeded expectations in spain and france. zero, in recession and out of recession, back-and-forth it goes. china's huawei technology is denying allegations it could help beijing spy on the west. europe's largest phone company is telling bloomberg at found security flaws in huawei's equipment dating back to 2009. says the issues were resolved but the revelation may damage huawei's rest that -- reputation. negotiators are in beijing

trying to wrap up an agreement, stephen mnuchin telling reporters he is looking forward to productive discussions and making progress but will not comment on specific issues. the vice premier will lead a u.s. trade delegation next week. theresa may facing another challenge from her own conservative party. a member signed a petition opposing her leadership and brexit strategy, forcing an emergency vote on her future. the vote be nonbinding but potentially humiliating. shares of alphabet falling in premarket trading. first quarter revenue s -- sing estimates, leading to concern advertisers are shifting their advertising to digital rivals. shares are climbing at the slowest pace since 2016. 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. tom: equities, bonds, currencies, commodities, this day before the fed meeting you would expect a little churn. that is what we have got. curve steepening. 13.06, showing a better than good stock market. the s&p touching record highs. the two year yield, everyone is watching. that is a big statistic for the day. francine: i am looking at european stocks struggling for direction, suffering from weak earnings in the tech sector. in the u.s., we are thinking about google and alphabet, which is why technology stocks are down 0.4%. 2.29%s. two year yield

ahead of the fed meeting tomorrow. tom: we have ge waltzing out. what is industrial america to do? they will combine with a larger ingersoll-rand in one of their segments. maybe this is a trend forward on conversations in industrial america. i am only doing this to keep francine happy. colorsing with the gucci , green italian, yellow germany. the crisis, germany still outperforming and at a late cannot get out of its way with a lot of economic slowdown over the last 15 years. francine: that is a serious chart, but if you put it in gucci colors, i am happy. pmi, they are still in expansion mode.

you see better-than-expected gdp , and china disappointed investors a touch today. tom: we need to get perspective, and we can do this across markets, across investment, and across what the fed will do tomorrow, with joseph quinlan who has seen polarity and fed calls before. you and i have seen it like before, but we have never seen this polarity of carl riccadonna telling us there will be rate increases, and modeling a rate cut. it is a wide dispersion. of sincehink september, how much we have shifted. low i get you to gdp, chris with a brilliant note on a softer personal income. which is it? joseph: the end come consumption

numbers will come back. every place i travel, every ceo i talked to, good consumption, wages are rising. skilled labor is getting a pay boost, so i think the consumer will come back and hold growth closer to 3%. francine: you are expecting inflation to come back up? how do you explain the shifting expectation? led,h: is it productivity the supply chains, or all of the above? i do not think we will see a wage push coming on prices that surprises us and has the fed move faster than they have to. inflation is very dormant. good growth, a benign backdrop for equities in the united states and global. francine: is it really only financial conditions that give you an idea we will not see

something ugly in the world economy, or something else? joseph: the oil prices were a little scared, but there is excess capacity out of saudi arabia. the emerging-market outflows look to be robust. china is doing their part to reflate. i am surprised by the european tobers, when it comes grinding out higher global growth. it could be the election. -- richardd clara da talkedked -- clari about solid growth. what is your statistic for solid growth? joseph: global growth is running around 3.7%, the average for the last three decades. beneath it, it is shifting. in the united states, i think

good growth is two point 5%, 2.8%. on a 21 trillion dollar economy, that is a lot of demand. tom: everyone is like, stop talking about the fed and ask joseph quinlan what to do about the marginal dollar. are you buying more apple? like health care, cyber security and defense, not necessarily taking the technology companies but recognizing there is still secular demand. tom: gardner denver merging with a segment of ingersoll-rand. mud make high performance pumps for drilling rigs. they came out with their earnings and have no community denverd ebita at gardner . breaking news in venezuela, i am looking at it right now.

uaido in a battle for venezuela. coming up, a conversation with ken griffith at the 11:00 a.m. our. -- hour. this is bloomberg. ♪

viviana: this is bloomberg "surveillance." earnings surging in the fourth quarter at airbus, cranking out higher numbers of the a320. that jet is the biggest rival to the boeing 737 max.

airbus' profit jumping almost 40 fold. --. hitting the prophet target estimates. companies sonergy strong trading performance boosted results. tesla reportedly will slash prices to regain status as the top roof top solar panel company in the u.s., announcing it is selling panels and equipment for up to 38% off. customers will be required to buy online. that shows tesla has not neglected its solar business. tom: thank you so much. the news flow out of venezuela is extraordinary. the senator from florida, marco rubio making comments. he says -- this is the moment for those military officers in venezuela to fulfill their

constitutional oath and defend the legitimate, interim president. he goes on to say -- liberty and freedom is never easy but is always worth it. says he is together with military forces, and reuters has a number of tweets out as well. a movable story in venezuela right now. we are looking at technology with joseph quinlan, who bought apple 47 years ago and is still holding it. he is with bank of america merrill lynch, and paul sweeney is with us. let me cut to the chase in an important theme. tim cook does not use community adjusted ebit dow. -- ebit.. -- ebitda. paul: it is always the long-term

growth company -- story. to our good conversation in the last hour on alphabet google, do they need to grow up and do a dividend? paul: at some point, that will be the natural progression but they are still in the mode of making huge investments in their core business and other businesses like youtube and waymo. they have pretty decent financial discipline. the cfo generally gets high marks from investors. the question for alphabet and google was simply, revenue growth was not as strong as the market was looking for in the question is why? is it just currencies or a competitive issue with amazon? francine: what is your answer? is there a competitive issue? paul: i think there is a little

bit of all of that. amazon is a new player in the marketplace. when you think about digital advertising, it has been facebook and google, and old-fashioned duopoly, but amazon is investing more in their advertising business, much of which is search advertising. we will have to see to what extent going forward that impacts the growth rate for google. that is weighing on the stock premarket. francine: what else are you looking for today? a sector turned on the back of google. does that mean after the earnings last week, we could be looking at ugly news? paul: overall, the earnings and revenue support for big tech and add driven big tech is very strong. if you think about nasdaq up about 23% year to date, certainly priced for a lot of

great numbers. anytime someone disappoints, we will see great stocks. tom: there is a point where you look at the percentage of a sector to the s&p 500 and go, that is what we have done. the percentage of technology is maybe six stocks. how do we deal with that from an institutional basis? joseph: it is hard, because these are big, huge companies that are global in nature. if you look carefully beneath the surface, we have the unicorns coming. south korea and maybe china, it is hard in that sense. i do not think we need to worry about breaking up these companies. tom: what is community adjusted ebitda? joseph: it is the company saying

if you look at the buildings and customers we have, this is the cash flow we generate. forget about the new buildings and new customers. tom: the question from the cfa institute is is it pro forma or pro forma format? rma?orma fo francine: is it just that it is valued like a tech company or is a tech company? joseph: it is a quasi-real estate play and a tech play. people do not have offices, on their own doing their own business and need office space, that is a growth story tied to the new economy. there is certainly a play. if you look at the business model, there is a lot of upfront expenses. you have to lease space, market and acquire members. there is a lot of cost associated with that, so if you

look at the p&l, it is tough. a lot of people will be pressing the company to show the path to profitability. they had a billion dollars in revenue with a similar amount on the dollar lot -- bottom line. joseph quinlan and paul sweeney. , the eli lilly chief executive. yorkis at 7:30 a.m. in new , 12:30 p.m. in london. this is bloomberg. ♪

♪ tom: bloomberg "surveillance," francine lacqua and tom keene. we have news in venezuela. reuters univision reporting that aido is calling on protesters to take to the street, certainly an active moment. you see rubio of florida commenting and clearly what was choreographed. francine: what we're hearing is through a tweet by juan guaido that he is joined by military services and is calling for a start of the final operations to free the country, in his own words. rosalind matheson, are we expecting this point to come so

quickly? : this is quite a surprise. what people were believing was that nicolas maduro had the military on his side, seeing no signs of breakaway support for the opposition leader juan guaido. coordinated,e because we also have immediate comments on twitter for marco rubio. we have the footage online of with a man who has been freed from military arrest. francine: when can we say with certainty that mr. go ido -- guaido has the full military behind him? rosalinda: we cannot say that now. it is far too early.

in venezuela, we are here there are -- hearing there are moves toward the base in caracas. for lopez, it is unclear what that means. a lot of people in the streets oup"aracas are shouting "c but it is unclear how true that is. whether those who still support maduro will swing into action to cut this off. tom: it is a movable piece, and this is the maduro party coming back with a headline. venezuela confronting small group of military traders, this from a government minister for the present leadership of venezuela. we are seeing images out on surrounded. guaido by military at some sort of

military base, and an active conversation with the senator from florida. marcole hard to see, but rubio goes to two individuals on cuba and says, you need to be with venezuela today or the cubans. today may be your final chance to make the right choice. i do not know if we will hear from the president, but it is remarkable that a senator from florida seems to be intimately involved in this news flow. we are getting breaking news, so we will keep an eye on venezuela, but breaking news on eli lilly. this is an important moment. we have expecting these debt have been expecting these figures to cross the bloomberg terminal -- have been expecting these figures to cross the bloomberg terminal.

the earnings-per-share better-than-expected. we will have to delve a little deeper to see what are the drugs they could rely on. tom: we will speak with the chief executive officer of eli lilly today. price anduestion of some of the other challenges in the pharmaceutical business. we are speaking with executives of 3m today as well, that is a heated story for the old blue-chip. daybreak, general motors' cfo. we are watching venezuela. stay with us. ♪

♪ good morning, everyone, bloomberg "surveillance." two major stories right now. now,nezuela, headlines

this is the present government, the venezuela admin is -- information minister said a soldier group was planning a coup. i would assume that is mr. guaido whom we have seen speaking at a base with the military. now we move to industrial america. general electric, what they nicely placed at the top of the release is organic growth of some form at 5%, not a bad statistic. around it is noise. karen ubelhart joins us. beneathl you look for organic growth of 5%? karen: what would happen with power? at looks like it broke even earlier than expected. it is still bad, but that is

good news. the cash flow was negative and there was fear that it would be greater. gardner denver taken out by ingersoll-rand. ge for takeaging out? karen: i think he is stabilizing right now and that will take a number of years. tom: he doesn't have a number of years, does he? karen: for power, it will take a couple years. people are wary about the cash. he has to generate some -- people are worried about the cash. he has to generate some from other businesses. francine: when you look at what analysts are looking for from ge, how has this company changed in your eyes in the last three years? karen: they have to vested a number of businesses, no large

ones yet, but they will be out of oil and gas and potentially be out of health care. that will keep the power businesses, even if they are may eventually be aerospace -- aerospace and power separate companies. francine: how are they affected by the u.s.-china trade dispute? karen: that is so small compared to the problems they have, it is hardly mentioned in the conversation. aerospace will be great. i have not looked at the numbers. health care should be good. power looks like it may have stabilized and that will be good news. well and theed as statistics on ge financial. karen: there are still cash flow issues and the company thought they would have to give to billion to fund it, then it was

3 billion than it was 4 billion, so there are problems in that business. that is still something people care about. tom: is the street buy -hold-sell? what is the mood? karen: it has turned better, but has an impact on the stock and turns it negative. tom: you are expert. i do not by the plan of a mckinsey time land -- timeline. karen: years to work out power, but he has moved quicker than expected on oil and gas. , $21d the biofarma deal billion, and got paid well for it. he is in a rush to generate cash. tom: i know karen ubelhart will

take notes on the interview of the day, michael roman. there are some questions that need to be asked and will be

♪ viviana: welcome to bloomberg "surveillance."

a breaking update on venezuela. the news that has broken about the opposition leader juan guaido, who has: for a military uprising and a video shot at caracas airbase. he is surrounded by a significant figure, leopoldo lopez who has been tainted -- detained under house arrest. marco rubio to woody and what appears to be some kind of a coordinated effort. the tweet from marco rubio saying -- after years of suffering, freedom is waiting for the people of venezuela. do not let them take this opportunity from you. now is the time to take to the street in support of your legitimate constitutional government. do not allow this moment to slip -- slip away. it may not come again. this has been a fast-moving crisis that has developed very quickly. the minister of communication from the state of venezuela jorege rodriguez has tweeted -- we informed the people of

venezuela we are confronting and attacking a small group of military traders. tors.ai tom: something we have been focusing on out of caracas. marty schenker looking at the relationship from washington to south america. you get ever more likely to conant,cky to have alex who has modest experience with the senator from florida. he was the campaign head of communications. we are thrilled to have you. explain to our worldwide audience. alex: the news coming out of venezuela seems to be encouraging, but we need to take it slow. rubio withn marco

the triangulation from cuba to venezuela. there there is -- alex: is a lot of venezuelans in florida and a lot of people he knows have fled the madura regime. when donald trump was elected president, and his first meeting he brought in lopez's wife, who had been under house arrest. apparently freed from house arrest. military is now leaving maduro, that is probably the beginning of the end for him. tom: whether it is a coup or the state -- beginning of the end, there has to be a projection by the united states. marco rubio and the president no it has been a fractured and difficult path between the united states.

what is the proper american projection? pressurehave putting on the maduro regime because they have been starving their people. what marco rubio has been trying to do from his vantage point. francine: marco rubio calling defenditary officers to juan guaido in his effort to restore democracy. whetherkly will we know the military has succeeded in doing so? question, is a great and i am not an expert on the military in venezuela, but i think when these things start to happen, they tend to happen quickly. , if notafter months years of escalating pressure from the united states thanks to

president trump and marco rubio, and the ecb region rallying around the opposition and venezuela. hopefully it goes quickly. francine: let's bring in marty schenker. president trump was one of the first to recognize juan guaido. i think this is an interesting moment for the trump presidency. we all talked about what would happen in a crisis. it is one, and how he reacts and he has stopped, short of military action and it will be interesting what level of support the u.s. government provides. to pine washington's view of the modern monroe doctrine. washington's view of the modern monroe doctrine. marty: it is interesting the russians and chinese have all had interests in venezuela.

ands a delicate balance venice ration has to show -- the administration has to show. tom: and the calculus of florida politics, you cannot win in florida to go against the cuba vote. mr.here a venezuela vote rubio has to worry of -- worry about? alex: i do not think he is worried. i think he is the one senator who cares. tom: where is everybody else? alex: great question. marco rubio said he would not run for reelection and a big part of why he changed his mind is because there is a lack of senators who care about the region. it is an important part of the world for the u.s. so when he was reelected, he wanted to provide leadership on venezuela and cuba that otherwise we do not see.

francine: let's bring in justin carrigan. we have talked about venezuela in the past. the last couple of minutes we saw this video message by juan guaido calling for military uprising. we have any indications he has the full military behind him? the government says this is a small group of people in the military. justin: which would suggest that if it is going to turn into something more significant, it is in the very early stages. what is crucial is the fact that some figures within the military , according to what juan guaido him,lling us, are behind may encourage others to fall in behind. we have a tense standoff, i would guess, with the information manager saying they are trying to face down this small group standing behind

guaido. it has been quiet in venezuela for the past few weeks and this seems to be coming to a head again. whether we will see a change depends a lot upon how much support president maduro can shore up behind him to face down guaido. francine: who supports president maduro? do we have any indication, intelligence, or insight on whether he would go if enough of the military would be rising against him? justin: if you are running a country where the economy is in meltdown and ed is very difficult to find staples in the shops, if you are looking after your military you will at least hold some sway. the question is whether there is enough popular support behind guaido to send a clear signal

that it is time for the army to shift its stance. tom: let me open up a question to our three guests. guaido at physical risk? if it is final phase, talking about a coup, i have the headline from ap putting down coup bid. there is a risk. marty: there is definitely physical risk and political risk. if it turns violent and guaido is turned -- harmed, what is the next step for the united states? if the leader of venezuela is feeling threatened, that is the first place he will go. tom: i want to ask more question and then we will come back. what would you expect to see from the republicans? mr. rubio must feel lonely now.

what do you want from republican leadership in florida, bipartisan leadership in washington? strong statement in support of the opposition. tom: could that be military? alex: all options are on the table, and if something were to happen to juan guaido's safety, there would be an escalation. ofncine: where is the rest the international community on this? how will the u.n. react? justin: they will probably want to see how this develops. as far as the loyalties are u.s.rned, we have seen the and european union on one side along with much of latin america, whereas on the others you have, i suppose the usual suspects in terms of russia and interestingly, turkey has thrown its weight

yound maduro, which tells where the loyalties are going, and interesting from the point of view that turkey is a member of nato. , andine: justin carrigan thank you to marty schenker and alex conant. plenty more from venezuela in the next couple minutes. this is bloomberg. ♪

♪ bloomberg "surveillance," tom and francine from london and new york. talking a lot about venezuela. they are confronting soldiers after juan guaido called for an uprising. have you been speaking to juan guaido the last few days and do you have any indication on how big this uprising is? >> this type of information is obviously secret. is aare a democracy, so it delicate issue to talk about the

information i could have received from the president. what we know is that there will number ofrtant military officers joining this call and military officers. said is president has the military is joining the constitution and democratic call of the venezuelan people for a regime change. tom: thank you so much for joining us. what would you suggest mr. guaido needs from the united states of america? this is a question going back more than 120 years. what does mr. quite own need from the military and need froms -- guaido

the military and politicians of washington? maryhen: it is important going forward for a peaceful transition as much as possible, we need to not polarize the situation. if the united states want to support the call, i think the most important part is to inform the population about what is going on accordingly to what is happening in venezuela and to not polarize. this is a national effort and has been for two decades now. it should be really on venezuelans to pursue their democratic change. francine: thank you so much for joining us. we will get her back on the phone very soon. we have a little bit of pharma news, eli lilly in the last couple of minutes, and pfizer. this has to do with the generic

drugs they have been selling. pfizer reaffirming its final guidance for 2019 for revenue. earnings-per-share four-on-two $.83 to 2.93. it seems to be pretty much in line with expectations. tom: i am going to go to joe quinlan on this. we have this and yet we have the politics of spain yesterday and the politics of venezuela right now. inant you investors to fold what this cacophony of politics means when you try to make thoughts about what to do with investments. joseph: earnings are good, economic growth is picking up. tom: there is stability but there is not. joseph: there is discontent to be dealt with at home, in venezuela, germany, and asia.

.nvestors have to be careful what do you do? buy goodod devin -- dividend paying companies. tom: we have a report out of adp that teargas was fired in that teargas was fired in caracas. when you look at lou chips and the desire -- blue chips and the desire for safety -- ofeph: we are still in favor the small-cap story because the economy is robust in the united states. the consumer will come back and we have the oil renaissance, so we like small gap and large gap -- cap and mark cap. noisese: why do we hear

about the fed and a rate cut? joseph: we would have to see a significant drop in inflation. the growth is there. the market is figuring out where we are going with the economy. we have been whipsawed. it is right in the middle. the fed is on hold for most of this year and the bias could be toward a rate hike deeper into 2019, but right now we are in the sweet spot. good growth, reflation efforts taking hold globally. one final point. you worried about the lack of visibility for companies? they are reporting good earnings but forward guidance is jittery. joseph: that does not surprise me, and the street has got to dig deeper and look at the numbers because we will worry

about the 2020 elections. we do not have the trade deals done yet. companies are putting their money to work to hire investing and we are set up for a successful rest of the year. tom: i have been watching the feed of the president and he has yet to comment on what we have seen from the associated press headline, calling it a coup. the last headline i have is of teargas in caracas. we will cover this on bloomberg "surveillance," and all bloomberg platforms throughout the day. this is bloomberg. ♪

♪ -- breakable china.

pmi's close to even. earnings not so bad, but alphabet disappoints. we talk with 3m's ceo about what went wrong. and is a cut on the table? fomc meets today. welcome to "bloomberg daybreak." i'm david westin, here with lisa abramowicz. boy, do we have earnings. lisa: they are flooding in. we are getting conocophillips. first quarter earnings-per-share beat the highest estimate. that is a beat, joining the likes of merck and pfizer, also beating this morning. david: general electric had a very big beat. about on for like charter communications. revenue