francine: blaming beijing, stocks slumped after president trump says china has breached the trade deal. the 10 year treasury sales sees the weakest demand in 10 years. -- says aan sees recession could lead to major losses. softbank profit jumps thanks to a billion dollar gain on its uber investment. the ride-hailing giant is said to price its ipo today. ♪ francine: welcome to "bloomberg: surveillance."

we are getting a little bit of breaking news from the norwegian central bank, of course, maintaining the key rate at 1% will have much more on what fed policy actually means for other central banks. first, to your markets, these of the stocks down. a lot of pressure and concern on where the trade conversation go next. vice premier liu he is in washington. because of the back-and-forth saying it was china's fault they had breached the deal, we see movement on the renminbi and on the 10 year yield. we cast ourselves back to what jamie dimon said. fed and,alk about the of course, the impact on treasuries. speak to the leader of the liberal democrats here in the u k. we talk brexit and u.k.

elections. first, let's get straight to first word news. u.s. corporate debt market will suffer massive losses if the economy falls into recession according to steve eisman. he is one of the money managers who famously predicted the collapse of subprime mortgages. i think the financial system of the united states is safe. that does not mean we won't have a recession. in a recession, i think there will be massive losses at the bond market cause of the lack of liquidity. but is a problem for people who invest in the bond market. pompeo has a stinging rebuke against the u.k., demanding they take a far tougher approach when it comes to china and iran. this comes at a sensitive time for the prime minister, who is struggling to deliver brexit under almost daily pressure to resign. uber is said to process its ipo

today. it is unlikely to be as big as initially thought. the company is reportedly considering pricing shares at the midpoint range or slightly below. they would debut with a value around $79 billion, a far cry from the 120 billion some were touting last year south africa has started counting the votes from the election. they suggest outright victory for the national congress, but the scale will be crucial for the president. the final result is expected this weekend. 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: thank you so much. let's get straight to our top story. president trump has upped rhetoric, claiming china has broken the deal. the talks were already clouded by imminent tariff increases and

threats of retaliation. >> by the way, see the tariffs we are doing? they broke the deal! so they are flying in the vice premier, good demand. -- good man. francine: there is quite a lot of news going on with trade at the same time. we heard from the fed what they want to do, which could be either a cut or a rise. the philippines central-bank cutting its key rate to 4.5%. we will have a full roundup of em and dollar moves. ,oining us is rob marshall lee and from copenhagen, peter, head of equity strategy at saxo bank. thank you for coming on. let me start with you, robert. are we going to see a lot more cutting from central banks around the world given what we heard on global growth and trade?

robert: last year, we saw banks moving up the -- move up. defending themselves against the rising dollar and u.s. rates. clearly, the situation has eased off, so it is taken the pressure off. the philippines had a credit slowdown, so i think it makes perfect sense to ease off. you look peter, when at global markets, how concerned are they about trade? if we have a deal, the markets go up? where are we in a wait and see situation? now, i think we are in a wait and see decision. the most likely scenario is a delay before any deal, which we think will be a week deal. short-term.ery if you look at global trade, we

have only had two major down periods. the slowdown we are seeing in the past four years is sort of an outlier when you think about how we are not in a war situation. i think it will be wrong to bet against global trade. this is a lot of noise. for markets, it is much more important to get some version of -- of m&t. of i think it is far more important magistrate. -- than this trade. i do not think it will be a catalyst for major declines. ray dalio was talking about m and t saying it was coming closer much sooner than expected. peter: i think we are headed down that road.

we have been on that bandwagon here for the past year and a half. the reason is quite simple. we have maxed out in terms of bid capacity, at least in many sectors. the monetary policy is maxed out as well. so the next downturn in the economy will have to be from the fiscal side when you are at these debt levels, the only sensible conclusion is that there will be a much tighter integration between fiscal and monetary policy. the only way to get out of this debt mountain is by accelerating nominal growth. the big question is the inflation component. that is what i'm saying is far more important if we get to m and t because it will have far more implications. it could really shift the inflation component. mean,ne: what does that robert, for the way you see it?

what is the chance of m and t actually being put in place? robert: for now, is very much a western phenomenon. that is where the concentration of debt is drivers remain slow. i think it is a misguided policy. there are some release valves around this currencies, for example. experiment,a big there are some consequences. bubbles? robert: absolutely, potentially. and big recessions are another potential as well when you have got an asset price and they get driven economy. that can spiral very rapidly. francine: terms of unintended consequences, where would we see bubbles first? peter: right now now, we have

bubbles in financial assets. that has been the effect of quantitative easing. the likely spike in inflation will be in real goods. inflation that is the biggest worry here, because i think inflation is not something that has a linear effect. m antique to work up to a certain point, but how good our policy at guessing when we get to that conditionality point? that would be the biggest worry about unleashing m and t. from a political point of view, we are added -- headed toward some kind of m and t. it is already the longest expansion since we began tracking. of increasest

stimulus. i think they will strike a deal in trade and will be a lot more .timulus coming francine: thank you very much. our guests stay with us. theng up, we speak to leader of a liberal democrats in the u.k.. we talk brexit, election's, and this is bloomberg.

francine: economics, finance, politics this is bloomberg: surveillance.

relief for theresa may as lawmakers decide against making it easier to remove her. meanwhile, statements have been put out indicating progress in talks to find a compromise. joining us is the leader of the u.k. liberal democrats. thinkof all, do you jeremy corbyn and theresa may will push the deal over the line? vince: no, i do not. i think the one field -- the one thing that will is if they agree there should be what we call a referendum on the result. certainly, my party and the other remainders would vote for the deal weren't subject to referendum. it is the only way out of the i'm going to see the deputy prime minister in a few minutes time and making that case to them. francine: what do you think is

the chain -- chance of a second referendum? 50-50? vince: it is about that level. the prime minister is deeply opposed and that is the current blockage. but i really don't see these talks with the labour party going anywhere. negative, butuly i don't see how they can possibly sign up to it unless there is a referendum attached. how would they then -- how would it then be deliverable if they had a referendum? i cannot imagine the labour party and its members would accept a deal without a referendum. francine: but do you worry your strategy will alienate the 52% who voted for brexit? vince: we have been clear from the outset, there are people who

take a very strong, passionate view we are unambiguous. -- passionate view. we are unambiguous, not apologetic about it. some may not like it, but i think others admired the clarity of our position. in the local election, we did well in leave and remain areas. francine: you have said he will stand down soon, the local election results make you think again? vince: i don't think you can operate like that if you are a leader. you have got to be decisive. i have been clear for some time we needed to have an orderly succession. i want to the next generation to take over and lead us into the next election. you know, there are people flatteringly telling me i should stay forever, but i do not think that is an intelligent way of doing it.

i have made a commitment, we are now planning the succession process. francine: are you preparing for a general election this year? there is quite a high probability. the scenario people have been described is that there is a change in tory leadership in june. the new leader will want a political mandate and we then get a general election in september/october. that is plausible. i do not think it solves the problem because we may finish with a parliament much like the one we have got. probably less emphasis on reliance on the democratic union and a shuffling of the pack. but the fact is, the country is badly divided on brexit and virtually the only way to resolve it now is through a referendum. a general election will not do that. francine: are you just a protest

party, or would you be willing to enter a government coalition again? vince: we are not entering into a coalition with this present conservative party or with the corbyn led labour party. but as a matter of history and tradition, we are working with other people. we did work in the coalition in the u.k., it was a very good government. were punished politically, but it was a successful government. week ison from last that people reported the liberal democrats because we are good at local government. we run a lot councils, we do it well, and people like that. we are very much a party of doing things and working with others to make it happen, but we're certainly not talking about coalition with the current leadership. francine: have you think the european elections will go? -- how do you think the european elections will go? vince: hard to say.

many are unhappy because they are happening at all. it is clear a lot of support is behind the brexit party. but the question is what happens on the remain side. there are several different parties. i would be happier if we had been working together. i'm currently trying to mobilize people behind the liberal democrats. i expect us to do well and i hope that will be one of the main messages. francine: this is the concern. given the remain votes likely to be three ways, can you realistically change and affect the debate on brexit? vince: we would hope to. what we are sending is a clear, unambiguous message. i think we are the best people to deliver that because we have been campaigning longest.

we have been a european party for half a century. we are the best organize on the ground and we hope people get behind us. but the european elections are not going to be a referendum on brent. that will have to happen subsequently when the arguments will be put on both sides. opportunity to get a substantial number of live id. -- of lib-dem mep's. we hope they will remain to defend britain. we have a clear europe about what we can achieve. issues about climate change, competition policy, trying to have some stability in a world with pugin -- putin and trump. we want strong representation and that will be the main objective of the elections. francine: thank you very much,

vince cable, current leader of the liberal democratic party in the you get. -- in the u.k . these figures illustrate the lack of appetite from investors for current yield. exceeded,ng has been the lowest since 2009 speaking with bloomberg exclusively from beijing yesterday, jamie dimon warned of yields a current levels. 2.4 isink the 10 year at whenordinarily low government has bought $12 trillion of sovereign debt, it has had a habit of affecting the 10 year. i think that 4%, when you're having good growth, is not a bad number. francine: still with us is robert marshall lee and peter from saxo bank.

thank you for being patient. peter, let me start with you. what do you see the yield being at your end? it all depends on the fiscal's from the u.s. and china -- fiscals from the u.s. and china. they need a stable curve, that would be positive in general. a lot of studies and research show they will have to do actual yield control like the bank of japan. maybe a bump up on the long end. the steepness of the if it does not, the markets pricing the yield, i think the fed will be forced to cut the short end. more steepness is needed, i

think, for the overall confidence in the market. francine: and for everyone watching at home and on trading floors, this is a great chart covering the yield, the weakest in a decade. is there an ideal price for where treasuries should be? robert: it is not my area of expertise. there are a lot of disinflationary forces. the year on year oil price remains disinflationary. that may well change, so i would not bank against the bond yields moving up, but for now, it is quite disinflationary. francine: this is the question we are asking all of our guests. how concerned are you buy yesterday's weakest treasury tenure auction. i am not really that nervous. it is one data point, and

luckily, an auction can never fail due to the primary dealer all of the deals are enforced to take whatever is offered. it will eventually be mitigated through the fed. i am not that worried, it is one data point. for me, we got very close to yield inversion. it has previously been a pretty strong signal the bond market is signaling some stress or worries. that is why i'm coming back to the steepness of the yield curve. the market forcing up long ended yields or the fed will be forced to cut the short end. i think the probability is much higher for that scenario then if we just went back three or six months ago. peter, if you look at sectors affected by trade concerns, looking at the terminal and biggest dealmakers,

are there any sectors that you like? peter: sure. where we are in the business cycle, according to the oecd leading indicators, the economy is growing below trend and contracting. , we could beonment into a recession depending on a response from the policymaker. and that type of environment, some of the most defensive characteristics within quantum factors, it is quality, minimum volatility, they will continue to do quite well. but if we get a fallout, we could see a short-term correction. it would come and hit the hardest of amongst some of conductors, automobile wheels -- automobiles, basically every industry that has a deep, long global supply chain.

i think the car industry is a very good example of that it has really been under pressure for more than a year. also with tariffs, but again the slowdown in demand in key markets. francine: what does that mean for emerging markets? would you make a difference between ones with structural reform and the ones that have not? there are some big differences in growth drivers. the likes of brazil, south africa remain more abundant and there is little and insight to the honest there are others with far stronger growth drivers. somewhere like china is multidimensional. if that parts that continue to slow down, bad for long-term , but actually,in the service sector is growing rapidly. the middle class is getting

wealthier and they are stimulating through tax cuts. with think the service sector in china will become much more of a noter going forward do analyze it the way you would have done five or 10 years ago. francine: i will ask you more about consumer inflation coming up. they for joining us peter and robert -- thank you for joining us, peter and robert. next, the new nuclear deal in iran steal the limelight. bloomberg. ♪

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francine: blaming beijing. we are 24 hours away from higher u.s. terrace. tariffs. softbank jumps to a gain on the uber investment. the ride-hailing company is set to price the ipo today. let's see what is happening in your markets. >> leonardo to the upside this morning. italy's biggest aerospace company. and on the downside, down more than 4% this morning. they had the smallest correlate profits -- quarterly profits. ajax plunging 17%.

this was their first chance to get to a champions league final. i have been schooled all morning about this game and i know june 1 is in all british match between liverpool and tottenham. francine: there you go. let's talk europe. eu leaders gathering today for the first time since the brexit deadline was extended. discussions will focus on plans following this month european elections. how much talk over eu jobs will dominate? summit where the jobs will become available at the end of the year.

and of course the european central bank. the two kind of move together. what was really clear by the end of the day is that it was not about exit. it's really about who wants what and when. in the effort between european nations to come up with big jobs by the end of the year. francine: what is the stance on iran? accept this not ticket or leave it offer -- take it or leave it offer. squeezedthat they are between the u.s., china, and russia. ultimately, the choices very difficult.

walk away from the deal that the eu negotiated or impose sanctions on iran which, in a way would validate president trump. >> let's focus on emerging markets. .2 outrights victory for the national congress. the scale of the wind will be crucial to president ramiphosa. with us is robert marshall he from newton investment management. ? hedo you view south africa needs a big majority to make sure the reforms go through. needs thertainly you support and is playing a delicate balancing act. and he is still trying to pander to them at the same time.

he is burned by some really terrible government the last 10 or 15 years. it is really hard to run a business when you have rolling blackouts happening all the time. we brought it back to basically the last 12 months. are you a buyer of this currency? robert: structurally, no. the strain and the south african export situation is not great. it is amazing how little they benefited from the commodity boom. down to the investment environment being quite toxic to a lot of companies over the last 10 years to 15 years. that said, it will swing the country in the short term. you have a stake in the emerging market? i don't know if you break it

down in region. robert: we are stock advance -- investors so take quite concentrated positions. you have very strong population dynamics, low credit penetration. excellent economic reforms from the government there. and you have entrepreneurial companies. what happens in china? we have pboc stimulating quite a lot. robert: they have trouble winning the economy off of credit growth. they will open the taps and stimulate fixed asset investment. when we have seen over the last five or 10 years is that the money supply growth has been coming down.

they are trying to restrain that and make it more sustainable going forward. we fully expect that to continue, but it doesn't happen in a straight line. francine: what is your take on the emerging markets in south africa, for example? robert: he's in a fairly weak political situation. he's talking a good game but the reality is you have very low underlying growth drivers. is very little room to get that win. it will become more and more problematic. it will get the strain on the currency. that they areans not very competitive. around the market in

60 seconds. robert: we have more than a quarter of our fund invested in india. the rate focused on consumers. cars are a bit weaker in the short run, but still, the car penetration in summer like india is 10,000 -- is 10 for every 15,000 people. it is a huge opportunity growth -- it is a huge growth opportunity. company --or a >> it is more domestic. there are subsidiaries of , but a lot ofnies them are domestic companies. corporate governance is pretty good.

robert: possibly. it depends. it is ais -- francine: trade story. >> the currency offsets that. offsetrency immediately and you chief very little. caseect that to remain the in the near term. francine: let's get straight to bloomberg first word news. >> president trump has upped the rhetoric when it comes to trade saying china broker-deal that they were negotiating. it was already clouded by him in tariff increases and retaliation. the president says able work out. it always does. president trump: you see the tariffs we are doing? they broke the deal. the vice premier is flying in tomorrow. good man.

but they broke the deal. is banningt trump aluminum, steal, and copper. it may begin enriching uranium a grin -- uranium again. plans to cease all oil orders for customers that used to buy from iran. this follows the u.s. failing to extend waivers. it is expected to remain below the kingdoms dealing. has tracked about $6,000 again. the currency has been on a wild ride the last few years. it is now back to the highest level in six months. we spoke to chief executive mike novigrad.-- >> we will struggle around 6000,

then we will take out 6000 and be much higher. i feel better about bitcoin than any point in my career. >> global news 24 hours a day on-air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. world's largest ride-hailing company is pricing the ipo later today to bring the latest on that story coming up next. this is bloomberg. ♪

francine: this is bloomberg surveillance. i'm francine lacqua in london. it let's get straight to the bloomberg business flash. agreed to pay $3.5 billion takedaets from

pharmaceuticals. the japanese drugmaker is making the sale after the $62 billion acquisition earlier this year. the main product is a prescription i drop for adults with diseases. the bank is expanding by 4% in the first quarter and set aside less money for bad loans. that helped the lender beat estimates even as low interest rates and we could tell you the economy weighed on revenue. bps new boss is forecasting a .ecline took the reinsn on february 1 and is under pressure to protect dividends. bt kept the-- payout unchanged. is set to price shares today after market and the listing is set to be the largest. byestors are hardly bothered

a high vix index and the tumbling shares. uber will not necessarily trade in lockstep. a price war between the rivals is important to uber. shares at80 million 40 to $50 each. as $9ould raise as much billion. uber could end up with a market valuation of $79 billion ft's $25 to list -- ly million. not everyone is convinced by the valuation. >> i am not valued on traditional valuation metrics. trying to short them is a little bit like shorting the ghost. the fundamentals will deteriorate. joining us is the founder of managing partner of felix capital venture fund that focuses on technology.

robert marshall lee is still with us. givingys, think you for us a little bit of your time. today you announced a little bit into a ride-hailing company. other parts that uber hasn't reached yet? >> it is not because they're not markets.erging revenue francine: why are you going into something why -- where you already have two big players, the critical market share going after each other. >> each is a different company.

movement than a business. extending from the french basis quite significant. they are in france. it is the message shift. and consumers are voting that this is what they want. francine: we have it on the mega isl as we do when there something really important. when you look at cooper and -- lyft, do you think that the investment is good or are you worried that they are overvalued? >> it is hard to comment on that scale. they are hoping to be much larger. it is a game of scale.

they are building a global platform. and they are writing a massive wave of transformation. trend is looking to stop. do they have market positivity? absolutely. in the end, it's a local market play. what is your take on technology and the emerging markets? >> we have investments all around emerging markets and have been for a very longtime. i agree that this is where it takes most markets. the internet platforms can be food delivery, trading, cars, social networks. winner takes most. the key is to generate scale. francine: but how do you find

the winner? robert: people spend a lot of money developing that supremacy. as long as you defend it don't drop the execution baton, demonetization can be vast. thecine: you were one of investors groups. ortransport the next thing is it just part of the huge transformation we are seeing about how tech affects us everyday? >> technology is enabling us to change our lives. we are investing in an electric scooter company. there is a need to have that cleanup energy. recently in the mental health space.

we take care of the mental well-being, which is very positive. is there anything that has not been disrupted yet that you would like to see news?tive? francine: are you telling me i'm about to lose my job? health, access to information. been easily disrupted. we are less worried about creativity from entrepreneurs. francine: is it basically what has been disrupted in more developed economies? >> mobile penetration is earlier.

the adoption is very rapid. it is well ahead of what is happening in the western world. they kind of look at you funny if you lose cash. the willingness to adopt, being watched and everything you do. -- in everything you do. we are getting managed by algorithms in many aspects of our lives. and we should also worry about backlashes to them. francine: think you for joining us. thank you for- joining us. anadarko is reportedly looking at a chevron bid that matches rival occidental. we will get the latest, next. this is bloomberg. ♪

francine: now to a closely watched him in a story, anadarko seeking a revised bid from chevron.

the texas-based company has called occidental's offer superior. we're joined by bloomberg's anne-marie. still with us is robert. i love this story. there is a flight tracker that .e can track a private jet what does it tell us? >> start at the beginning. we sought at omaha. -- we saw it at omaha. -- we saw a flight to paris and we saw it fly to paris. now it is in rotterdam. we just know the jet was in the hague. it left rotterdam. we know that is where shall is based. we know shall anadarko has this joint venture. we don't even know that they met at this point.

but it is a fun way of tracking where the ceo is up to next and where she's going. we know that shale has an interest in the premium with anadarko. francine: will chevron revise their bid upward? >> that's what everyone is waiting for. away, revise upward, or ask for an extension. if they revise upward, it will be between $70 and $72. they have the cash flow to do it. go too high, does it look like they really want to get this deal done? they can do this deal and be at occidental. francine: bloomberg surveillance continues in the next hour. tom keene joins me to talk to

the author of black swan at new york university. and we look every 15 minutes at your markets. stocks actually dropping globally. they were trading to what they were just a couple of minutes ago. the goal to climb, investors seeking havens. china is falling to the weakest since january. this is because the clock is running down for tariffs to between the world's largest economies. this is bloomberg. ♪

francine: blaming beijing.

the stock slump after president trump said china breached the trade deal less than 24 hours u.s. tariffs.er and we could demand in 10 years, the steve eisman says a recession could see massive losses in u.s. corporate debt. and softbank profit jumps an extra $4 billion on the uber investment. the ride-hailing company is set to price the ipo today. morning, everyone. good afternoon if you are watching from asia. tom, we look at markets and brexit. of course, we look at euro politics and with the eu will do with iran. there is a lot going on. the pitfalls and you are down 3%, then down a little more. yen strength, a global proxy for the tensions that are up there right now. we will put yen and

cold in my data check. but history to the bloomberg first word news. >> for the second time in a week, north korea has conducted a weapons test. the north fired at least one unidentified projectile today. borderlaunched from the near south korea. is believed to have been a short range ballistic missile. the negotiations are overshadowed by president trump's threat to raise tariffs. president put the blame on china. president trump: you see the tariffs we are doing? they broke the deal. so they are flying in the vice premier. good man. but they broke the deal.

meet theent trump will vice premier only if the two sides can make progress. president trump is that in more pressure on iran. the latest u.s. order discouraged companies from doing business with iran. but if prime minister theresa may has won a reprieve from the conservative party. they kept the rules on leadership challenge unchanged. meanwhile, talks with the opposition party seem to have been revised. 24 hours a day on-air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. currencieses, bonds,

, commodities right now. this is after 21 points. on the edge of correction territory, but we are getting there faster. won off of korean projectiles. a weaker korea by a solid-state. in the german two-year is the european benchmark, francine. francine: i am liking the way you're looking at stocks declining and treasuries advancing. this is on the back of tariffs really moving. you are. this is the global benchmark. investors are really seeking havens. tom: we are three basis points .ower

a guest says something that is job dropping every once in a while. you can always get that from david rosenberg. this is a stunning chart. this is a less employed america and how the president got elected. this is the labor pool of the united states of america back to eisenhower adjusted for population growth. all you need to know is that we are in unprecedented decline and labor pool and we are back to the late 70's. it is a stunning observation by david rosenberg. i am looking at two things. first, i'm looking at romania. we just saw pictures of the and they arer, stuck between the u.s. and iran. i am looking at the italian premier speaking to reporters.

and they will talks about -- talk about brexit. and actually what it means for europe. hearing how to deal with libya. let's get to the bloomberg terminal. i changed it at the last minute. we looked at the weakest levels since january. we looked at the fragility of the economy. and what we tracked thanks to hillary clark is volatility. let's get straight to the top story. president trump updating the rhetoric. clouded by are retaliation by beijing. theident trump: you see

tariffs, they broke the deal. but they broke the deal. joining us is our economics correspondent. we talk about china breaching .he deal what is he talking about? >> they both made the point that the u.s. and china can work together on this. china is bracing for a fight even if talks continue. so clearly we are in rock year territory. clearly talks will go ahead. we will keep an eye out for if the vice premier gets a naughty

and in the global office. i guess all the speculation would be that talks are not making much progress. and who tells the trade delegation what to do? who gives them their marching orders as they wander from dulles and to washington -- into washington? you have to consider the consolidated power that president xi jinping would be the man who is the master behind the scenes here. that is not to say that the delegation are necessarily having the full authority, but you have to say that going to washington with his blessing, they are negotiating on behalf of wider government strategy. there is a feeling that this delegation would not be going if

they did not have something in their briefcase to make an offer about. francine: vicki so much. thanknk you so much -- you so much. joining us now is from head of fixed income strategies. let me kick off with you. should we be worried? is this the art of the deal, or that wille tariffs last a number of months? >> it is a little of both. have this crunch point where we see the decision tomorrow. 25%.uld see

the tone coming out of these negotiations, i believe that this is one point in time for what will be a set of negotiations. francine: the vice mayor is showing up in washington. it must count for something. >> it counts for something but i would not assume that a deal will be done in june. i believe this has been a big step back. think trump would come out with a stake a strong is that. i would not be surprised by some of the tone of the chinese administration. i assume that they speak with one voice but perhaps that is not the case. tom: maybe there are seven other reasons as well. what do you observe within the

derivative market? ?hat do you observe >> that is hardly surprising since we have been in such a law. i have been a little bit disappointed by the lack of action. professionally, it is a disaster. are you setting this up as an and to mediate or this intermediate bear market? or is this an opportunity to acquire shares, not so much this morning, but within all this agony? be withnk that it could equities.

expected.n i think given the fed is on hold, the u.s. economy continues to do very well. also in china, gdp growth came in better than expected. some of theg positive impact of stimulus as well. goodnk this is a opportunity and we would want to be in the market. tom: this will be a good hour. markets on the move and we will give you more data checks amid all these correlations. all you need to know is that the yen is that the yen a stronger and equities give way. deutsche bank a little fragile. bloomberg, let's advance the story on china. she is outstanding. our -- in the:00 8:00 hour.

this is bloomberg. good morning. ♪ ♪

tom: francine lacqua in london on queen victoria street. i'm tom keene. at -20 one there. a little more negative earlier, but we're certainly watching coordinated change. watson of blackrock. how do we get to the point where we are down 3%, 4%, and everyone is hysterical. where a little bit of a pullback ? >> we seeeadlines

so little volatility and a stable environment. when we sawge shift the effectively change tactics. underlying data has been pretty strong and pretty stable. the markets overall has been very stable. everyone has sort of positioned that they are hopeful that they might come through or have an increase in tariffs. it is a surprise to see these headlines.

it is interesting, because if you look at the treasury auction yesterday, it was a much weaker uptake then had been expected. it could be a little bit to do with fatigue or it could be a sign that investors are also happy with the yields they are getting. we also see a huge amount of issuance from here in the u.s.. we do see a little bit less in terms of international buyers picking it up as well. we are seeing a few signs that maybe investors are not quite so happy with the yields they are getting now. this is the weakest demand for the 10 year note you worry about that? >> i don't. it tells me people are being rational.

. don't want anymore if the dollar turns south, it will be officially compensated. >> where should the treasuries be right now? >> that is the million-dollar question. i certainly think that within a range, we see this headline news. given the issuance from the u.s. and the demand for foreign investors as well, you would not expect them to be a little bit higher. what a wonderful debate yesterday, a conversation of economic debate. us, economicin

research. thrilled to have dr. hooper with us. on washington, china, and the world. this is bloomberg. ♪

is bloomberg surveillance. let's get the bloomberg business flash. bluebird has learned that anadarko is looking for a revised takeover offer from chevron that matches or beats 38 billion dollars proposal. chevron will have to hurry. they have until tomorrow to come

up with a new bid. the price is $3.4 billion. and disney is reassuring investors that becoming a digital streaming giant won't break the bank. the company launches disney plus in november. the biggest strategy shift in decades. the platform will compete with netflix is a direct to consumer product. meanwhile, second-quarter profits and sales will beat estimates. as the bloomberg business flash. tom and francine? francine: president has issued an executive order, a day after the islamic republic declared it may begin enriching uranium and again in two months time. they said this would prevent tehran from developing a nuclear

weapon. a bloomberg reporter joins us from tehran. our people worried about what we heard the last couple of days from president trump? >> the people i think are very worried. let get worse? what will happen? i don't know if it will breach another low. reacts how the europeans over the next 60 days. this financial channel and the purchase be huckle -- vehicle, days unfold.

iaea,ement saying the they have to decide the final of the nuclear program. so that can be very important. sanctions, there is huge deal. francine: how crippling is that? >> we know iran is a big oil producer. it is a founding opec state. there is a huge amount of oil reserve. historically, it has been a big producer of construction material.

biggest, one of the biggest steal producers. we may.inal question if how does tehran to the u.s.? is it america? bolton?observe mr. >> is a very good question. many of them have some kind of connection to the united states. they will have children in the u.s. many of them have been cards. very -- there has been appointed distinction.

personally, i have only been in iran for six years but i can't remember witnessing a time where i've seen so much kind of anger and frustration at the american government. thank you so much, our bloomberg reporter in tehran. make a decision on iran is angela merkel who has just arrived at the eu leaders summit. she is speaking to reporters on the ground. europe is stuck between the u.s. and iran. they are running out of options. ♪

♪ tom: bloomberg "surveillance surveillance," stronger

japanese yen and yields lower. there is two important clocks right now. it is not like the clock to the fed meeting. a valuable clock in america, there is so much going on that you do not realize it is there. washington tariffs, 18 hours, 13 minutes away. the liverpool-tottenham clock. francine: a different clock, but important nonetheless when you look at resilience and football. on tariffs, the markets are anxious. and wethink about it, were trying to talk about it, the fact that the vice president is arriving in washington and is there, they would not send someone if they were going to get a slap in the face. tom: i think the mystery is

tangible. you need a first word news. trump turneddent up the rhetoric before trade talks resume with china. he accused chinese leaders of breaking the agreement they negotiated, but said things will work out. foreign investors are dumping chinese stocks before u.s. tariffs are imposed. ofy have sold a net average $558 million of mainland shares, the most since the shenzhen exchange opened. warns the u.s. is at a constitutional crisis and voted to hold attorney general william barr in contempt. the vote came after president exertederted's --

executive privilege over the mueller report. the worst airport in the u.s., newark liberty airport in new jersey is the bottom. it comes from an organization that specializes in air traveler rights. in survey ranks airports tokyo and athens as the best in the world. 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 kailey leinz. this is bloomberg. francine: thank you so much. leaders areht -- gathering for the first time since brexit was extended. protect tradeto with iran. joining us is maria tadeo. forget about brexit. what will be number one on their agenda today? maria: today was supposed to be

a celebration -- i am not sure many people know this -- but today is europe day. table, a iran on the nuclear headache for the e.u. they negotiated this deal and iran is threatening to pull away from it, and they also want to talk jobs. many positions will become available by the end of the year. you will see the power struggle between the french and germans to decide who gets what. tom: you are pushing people out of your way, good to see you with the contact sport of european meeting. you are buried in the heart of transylvania in one of the most gorgeous villages. a unit five-year up, how -- unified europe, how unified are

these meetings? maria: that is a good question, and you see the tension play out in particular because key jobs will become available. the french have their eye on the european commission and central-bank. they want to get a key position they have never had before, so they would like to say they are united but behind the scenes is the tension. tom: how are the british doing at these meetings? they must be a complete destruction. told: very much, and i was by one official they did not want to talk brexit. they are skeptical about the prime minister and whether she can get the deal done. secretary, who many regard as not being and for winchell, and they think the real test influential, and they

think the real deadline is october. the e.u. wants to focus on other things. francine: maria tadeo on the ground as e.u. leaders arrive. we will let maria go so she can catch these leaders. still with us our edmund shing and marilyn watson. you were right on the money when you talked about the u.k., you wonder whether u.k. will be after the european elections, who will win, and that will change the composition. tom: i think i need to go to london to be with francine on may 22. francine: claridge's is waiting. tom: may 23 is a huge date. francine: the europeans are nervous, especially on the french side. it is likely that in the u.k., the parties that are pro brexit

will gain way. if you have a presentation of people who are there to decimate the european union and european parliament, it may be a problem for emmanuel macron. tom: it is gorgeous. it is beautiful. francine: you are right. all hell breaks loose when the lib dems take over. how do you view brexit? i don't know if you even want to talk about it. will they talk about brexit or focusing on iran? edmund: they must be heartily fed up with the whole story. they were just like a decision and move on, as we all would. if we could talk about something other than brexit, it was

bitcoin and now brexit. the subjects go on too long. we need to get some certainty in life and move on. francine: but we are not getting any kind of certainty anytime soon. , theyn: in terms of gilt bank of england last week, mark carney, not enough is priced in, in terms of a rate hike. data has been better than expected. deals come to pass in terms of brexit, the chances of a hard brexit are diminished with voting in the european parliament. it is not necessarily a guarantee that the e.u. would extend it any further. the tories and labour are in negotiations.

the economy is doing better than expected. the prospect of a no deal exit has diminished significantly. francine: overall, the european elections with the new composition of parliament, what does it change? will we have less taxes in some countries? does it change policies and therefore change the market? edmund: we will get lower taxes. macron has cut taxes once and well a second time. you will get that irrespective of the elections. when we look on a wider scale, i suggest fiscal policy is coming slightly closer to europe. the german government is very trans agent and are looking for the money, clearly unwilling to spend that money. with -- itay continues to be eroded, as is

europe. they have been losing votes less right-center. tom: i am going to ask a market question. are you managing for the coupon now, or is blackrock in search of total return? marilyn: it is actually a little bit of both. we want total return for sure, and most of our funds -- in most of our funds. the coupon is important in this environment, particularly specific to u.s. assets, whether it is treasuries or investment grade credit, but emerging markets as well. if you have high-quality liquid carry, that is important to portfolios at the moment. it is a little bit of both, but the coupons are important and pose a big factor in the overall total return. tom: marilyn watson and edmund

shing. this is from the heart of transylvania, outside bucharest. it is one of the most europe, on cities in everybody's list of most gorgeous cities of continental europe. er making an appearance. we have some pigeons as well. worldwide, this is bloomberg. ♪

♪ kailey: this is bloomberg "surveillance." facebook cofounder chris hughes

says it is time to break up the company. he writes that he is angry mark himerberg's growth has led sacrifice stability for clicks. andaid it is unprecedented un-american and it is not enough to impose a fine. bitcoin has risen above $6,000 for the first time since november. it has been on a wild ride. bitcoins long-term technical profiles point to a new up cycle. that is the bloomberg business flash. now,transylvania right maria tadeo is there listening to the comments of the president of the republic of france, mr. macron. a terrible tragedy at motrin game -- notre dame, dealing with protests in france, and across

the channel in the united kingdom. inwill see where this goes -- on may 23. it is the article the airline business fears the most, in a magazine called "monocle." i have a subscription on the coffee table at home, and it is le, who nails it every year with an eclectic observation on how we live in airlines and airline lounges. congratulations again on intelligence. i will not waste your time, but i want to know how finnair does it. when i went to helsinki, you saved me on my flight back. how do they do it? tyler: they have won a couple of

awards. they do a couple things well. they nailed this northern bridge spanning europe into asia. , so got 19 destinations they have exploited this top of the world hub to get from helsinki to other places. this is where i saved you. they are running a350 wide-body planes within europe and you rather like that. effect ofhas been the the growing disaster, the tragedies of the airline crashes? is it becoming an airbus world? tyler: we saw yesterday, even icelandair, they are signed up to take the maxes. they have a model not unlike veryir, so they are a

loyal boeing customer. order and theyon said they might move to airbus a 321 fleetwide. francine: i am so happy to have you on tv, but next time i need it to be in london. will we see much more consolidation in the airline space? tyler: we have to look at what we have heard from lufthansa, probably will not last two days. the answer is yes. francine: how will that play out with travelers? how disrupted will the travel sector become? tyler: i think a couple of things are happening. companies are looking at how their staff are getting from a to b in europe, and probably more pressure for people to go to rail.

, but theyikes lcc's are under pressure. look at lufthansa. they are talking about snatching up part of the thomas cook portfolio. they are interested probably in the charter carrier, condor that used to be part of the lufthansa group. i think it is probably their euro is not the lcc working out and condor is the more loved brand. francine: we have to go back to the top traveler awards. they are great fun. you have the classics, the leading european hubs, but the best uniforms for greeting, and you have a hotel in paris. how did you pick these questions? tyler: we do not want to use the normal metrics. brands that spend so much on digital and how they will

engage, and the first experience is absolutely key. reon, with a high profile ,cquisition, they nailed it going from a standard uniform company. first impressions, and the hotel business more than ever are absolutely essential. tom: one final question. you will not like it. where is british airways? british airways i think is in a bit of a model. here is an airline, the world's favorite airline. people are certainly going other places. finnair as a good example. people will choose to go to north the haircut -- north america so they can fly through helsinki because they want a better experience. thank you soule,

much. theve a prescription for magazine but tyler does not tell me what to do because francine has my vacation days. i do not know which loans to go to. -- lounge to go to. francine: you do now. tom: the cathay pacific lounge in hong kong. vacation ing my over. uber comes today. lyft is going like this. , even paul sweeney used an uber today to get to work. this is bloomberg. ♪

♪ uber and left are not valid -- lyft are not valued on traditional metrics so trying to short them is like shorting a ghost. if you short them, the fundamentals will deteriorate. tom: you know he will get his 10,000 shares.

newberger berman, steven eisman on uber and lyft. balld shing of emp perry will do everything to -- bnp paribas will do everything to avoid that. i have got to go right to the news, the bid yesterday on lyft. that was ugly. paul: i think people were trading out of lyft. they have been doing that -- tom: institutions that need cash, sell this dog, let the duopoly go to the winner. paul: and you the u.s., dutch in the u.s., it is clearly a duopoly. lyft is focused on north america but uber is everywhere, a global platform, that is what they are trying to sell. tom: it is a great selling

point, but the bid will sink just like lyft if they do not nail the extrapolation. the vector of their path to process -- profit, is it the same as lyft? same,it is generally the but they have other businesses. they have a food delivery business and they are trying to say they are a platform, not just ridesharing. investors look at this ridesharing business and do not see a path to profitability like with facebook and google and others. francine: what is your take on these valuations? the tech sector has potential but feels expensive. edmund: it is all about narrative, not at all about valuation. lyft and uber both lose money. people, when they listen to i think to ber,

fair is a good customer experience and people extrapolate. a good company does not necessarily make a good investment. people are in love with the narrative, this is a global brand, and they seem to pay whatever price they want. francine: is that not what we said about amazon 10 years ago? edmund: i think amazon is a different story. you look at the business model of amazon, they could have made money whenever they wanted but they chose to invest heavily. i am not so sure with uber that is the case today. that was true of amazon for a did not postnd it profits because they were invested so heavily in web services which proved to be a genius stroke. tom: i will give you a genius stroke. we are talking about frozen in

transylvania, bring up this chart on walt disney. iger enters the door. is he the smartest guy on the planet at disney? paul: he has been one of the most successful media ceos over the last 15 to 20 years, and he has bet his legacy on this pivot to streaming. this is a big bet for bob iger, the company, and shareholders, but the early feedback is if anybody can compete against the isflixes and amazons, it disney. tom: this is bloomberg. ♪

♪ tom: this morning, a set of fears increase as washington

awaits the arrival of the chinese delegation. the street awaits the arrival of uber. lyft is big, uber is not. the president confronts house democrats. the gop await the arrival of donald trump, jr. they have questions. follow the gulf stream. they await the arrival of a new bid from chevron. this is bloomberg "surveillance." i am tom keene, francine lacqua with me. she should be on assignment in transylvania but is not. francine: when you look at the brexitations, let's park . a lot of people in charge at the commission will no longer be in charge of the commission when

brexit happens, unless it happens in seven days. they are there to talk about tariffs, trade, and iran. europe is stuck in the middle between the u.s. and iran. whatarchie or archibald, should it have been? francine: i think it is archie. tom: jonathan ferro had me up all night. francine: that, and football. tom: here is kailey leinz. kailey: the u.s. and china resumed trade talks but the negotiations are overshadowed by the threat to raise tariffs. last night in florida, the president put the blame on china. >> you see the tariffs we are doing? they broke the deal. they broke the deal. so they are flying in the vice premier tomorrow, a good man,

but they broke the deal. kailey: the president will meet with the vice minister only if they make progress. president trump is putting more money on iran to keep them from developing nuclear weapons, banning the purchase of iranian iron and steel. the latest u.s. order aims to discourage foreign countries and companies from doing business with iran. theresa may has a one-day reprieve from her conservative party. may agreed to discuss her future next week. --ks of the opposition party both sides indicate progress. north korea has conducted a weapons test for the second time in a week. they fired at least one identified projectile from a base about 130 miles north of

the border with south korea. one of those is believed to have been a short range ballistic missile. 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 kailey leinz. this is bloomberg. tom: let me go to a chart right now to show the korean move, and it has widened out with the headline on two missiles identified. this is a weaker korean won. clearly, there has been in effect on the korean won. let me get to the data check. turkey's central banks are spending one week options. the turkish lira is dutch has weakened dramatically in the last -- has weakened dramatically in the last 20 minutes. the vix, 21.5.

the german two-year, like deutsche bank, cannot get out of its way. francine: i am looking at the same thing, stocks globally as the deadline is approaching and we have a count loan -- countdown clock. it is the deadline approaching for u.s. and china to raise gold andl tariffs, so treasuries are climbing as people are looking for havens. tom: this is from the brilliance of david rosenberg yesterday, cautious on the american economy. labor pool population adjusted in the united states, a stunning move back to the 1970's of fewer employed americans. too much to talk about. francine: we are looking at china's renminbi sliding to the weakest level since january.

one,ility for the yuan -- volatility spread spikes again. tom: we have two wonderful started, martin schenker, andrty peter hooper from deutsche bank. dr. hooper does not speak on deutsche bank policy and executive positions. we need to get that out of the way. how does a grizzled imf pro like you follow u.s.-china trade talks and the arrival of the chinese delegation? peter: the lines have hardened a bit this week. we looked at things after the news over the weekend, we had a piece on monday saying we

thought we would see a step up in tariffs. i do not see things backing off. that will be costly. the big issue of this is what happens after that. things start to get worse, or is it the beginning of getting to the deal they both want? tom: the council on foreign relations on park avenue, there are grizzled moments on the wall . yesterday, we observed the president of the united states at a political rally bashing the chinese before trying to get to a deal. this is unprecedented, isn't it? marty: totally, and this president has made dealing with china one of the hallmarks of his presidency. people like steve bannon and peter navarro, so to your point, it does not look like if this does not result in a positive

development today, it may be a long time before they get together again. francine: does the president want a deal? does he will think -- does he think that being tough on china plays well with his base? marty: it plays well to his base, but to the extent that donald trump has principles, this is a core one. he does not want any deal, he wants a great deal. he casts it as if it should be great for both sides, but there are fundamental issues he wants china to address that will be difficult for them to do. francine: if we had china doing reciprocal things, if they basically pulled -- what the tariffs on the u.s. -- put tariffs on the u.s. goods, that hurts the economy, the thing president is most attached to. peter: near term, if there is

retaliation, something like a tenth or two on gdp, what is more have -- important is what happens in the coming months. the cost could be considerably greater. if this salvo is enough to get the two parties together and a lot of pressure politically will happen, this could blow over. the markets have been taking this with relative equanimity. there was an assumption this would blow over after that last salvo. time, i will not go to noah feldman's great essays. we have to go to the distinction of this great battle of executive legislation and judicial. hast the republican senate finally acted in a bipartisan

manner to bring donald trump, jr. before the intelligence committee? what is the moment of that? bipartisans the loan effort to get to the bottom of -- tom: it is watergate-ish. marty: this talk of impeachment, impeachment is not possible without republican support. it came as a big surprise when donald trump and all the people around him say, let's go pass this mueller report to see the republicans in the senate in the form of the intelligence committee issue a subpoena for don, jr. they are angry because it goes counter to the narrative they want. francine: what unites the republicans and democrats at this point, iran or trade? marty: i think trade more than iran.

on the democratic side, a lot of people saying that donald trump's tough stance on china is welcome. on iran, there is real danger there. iran is a bad act -- bad actor. they wanted addressed and whether they do it this way or through diplomacy is the issue for democrats. tom: i have got to bring up this chart right now. this is too important. john from coventry emails in. i am going to pronounce it wrong, it is ajax except it is -ix or something. this is a dutch stock. they will kill the talks. thank you, john from coventry for emailing in. a lot of discussions through the morning across the bloomberg.

wendy cutler, former trade negotiator, in the 8:00 hour. ♪

♪ "surveillance," francine lacqua in london, tom keene in new york. futures and the yen, 109.78, a weaker japanese yen. cautious on the economy and priya misra pushing back against the gloom. peter hooper of deutsche bank

has been outstanding in his economics and in developing extraordinary research capability at deutsche bank. the easy media question -- who is right? david rosenberg caution, priya sra, who is right? peter: the fed is about in the right place. we do not see a reason for a cut or raise. tom: you are very draghi-ish. peter: the 3% growth we have seen in the last year, the mid twos next year. this is a goldilocks scenario for the fed. the labor market has over tightened. they will bring it back into a

nice landing. growth has to slow. we cannot continue with 3% growth because potential growth -- this might have gotten up to 2% potential. you cannot continue to grow 3% without overheating. tom: you have a great group of people who looked at the aggregate and tried to partition the american economy. economy,a goldilocks who is it a goldilocks economy for? peter: we are making progress. steve landfilled in their group and the group are predicting a median income measure. we are looking at what is happening to the distribution of wealth. here, median up versus average aggregate, and the median can shift. as it --

peter: we have been moving towards greater skew in income. concentrator of wealth is more at the top and this is having political ramifications. there is increasing talks of wealth tax. something has to be done to redistribute. the increasingly chosen few at the upper income level are benefiting tremendously from our capitalism system. it is a productive enterprise we have. we just need to make sure that more share in the benefits. francine: is this because of central banks, and do we need mmt? peter: do we need mmt? mmt, modern monetary theory if you will, is very attractive sounding. all i central bank and

government needs to do is print more money and we can spend as much as we want fiscally. with low inflation pressures and a highly credible fed, it that could go for a ways. eventually, you will end up like many small countries that have tried this, with great inflation problems. the problem with the mmt theory as it can control inflation but only by raising taxes. taxesx authority, getting raised in washington if necessary is probably the hardest thing ever. ultimately, you will be looking at a centralized central bank, administrative executive combined with a legislature making these decisions. tom: good luck. peter: this is pie in the sky. tom: peter hooper looking for a new amazon show to come out.

dr. hooper is talking about the average and median. tonya emails in london and says, he should have done the a la mode as well. scream --it is -- i cream, it is a joke. manila. -- vanilla. francine: it is not working. jeremy corbyn is launching his brexit manifesto in kent. when you look at brexit, it is unlikely that labour and the conservatives will find a deal so they are going to european elections. if you are someone in the u.k. that wants to stay in the european union, you either vote for labour -- although it is unclear what the position is for a second referendum or not --

and that is what the probe remain parties will have to decide -- pro remain parties will have to decide, whether they are splitting the vote. ♪

♪ this is bloomberg "surveillance." let's get the bloomberg business flash. hughesk cofounder chris says it is time to break up the angryy, writing he is mark's focus on growth allowed

he says it is-- not enough for the government to impose a fine on facebook. buy tos has agreed to keita. they will -- takeda. treatmentsired eye and a $62 billion acquisition. francine: now to a closely story, anadarko seeking a revised bid from chevron to beat the 38 billion dollar offer from occidental. chevron has until friday to respond. for the latest developments, we are joined by annmarie hordern. ,e are tracking gulfstream

which is probably the best story ever. this is used by the leadership of occidental. annmarie: they have a corporate jet. butas flying over ireland it was in rotterdam at the hague. we do not know who was there, but shell is based in rotterdam. we have been tricky -- tracking vicki holland all over the world. paris. in chicago, in this has been a way of seeing where she has been, and maybe we will get some news but they spoke about. this is speculative. tom: do we know what anadarko wants from chevron? they badly want chevron to acquire them. occidental is culturally beneath them. what does anadarko want --

-- anadarko want from occidental? annmarie: they want to meet or exceed $38 billion. chevron's stock is a better currency than occidental's stock, so that was the heavyweight on chevron that they were able to do this deal. the cfo of chevron was saying how anadarko said they wanted more chevron stock, less cash. they might have to boost the cash holding, but they have the cash to do it. the question is -- do they have the appetite? tom: this is one of the best screens on the bloomberg, weighted average cost of capital. what you want to notice is the slope of their cost of capital over a decade. chevron has been hugely responsible, et cetera.

after the in touch ibm deal yesterday, why don't they just buy these guys and put occidental out of their misery? annmarie: the ceo has made a reputation of being financially fiscally disciplined. it is not like the old days where they are spending money and consolidation. awayn walk away -- walk with his reputation intact, gain a billion dollars, and they definitely have the cash to do this. tom: thank you so much for the tracking of the gulfstream. coming up, ron williams, a new book on leadership. ♪

at comcast, we didn't build the nation's largest gig-speed network just to make businesses run faster. we built it to help them go beyond. because beyond risk... welcome to the neighborhood, guys. there is reward. ♪ ♪ beyond work and life... who else could he be? there is the moment. beyond technology... there is human ingenuity. ♪ ♪

every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. take your business beyond. ♪ francine: this is bloomberg "surveillance." it started raining and hailing

about five minutes ago and now it is sunny. theresa may winning a little bit of retreat -- reprieve from her tory rivals, sometimes friends, sometimes frenemies. look at that dark cloud. it is sunny one minute, ready to rain the next. huber says the cost of defending drivers suits could be material. uber becauseg at softbank said they benefited quite a lot because of their investment in uber. we are expecting huber to put to put- huber to -- uber their ipo price today. tom: we have tried to be as tentative with the language as we can. the markets are not cratering or crushed, but there is the grind

as we saw in october. we see futures down -22 and the yen comes in stronger. that is a good time to speak with marcus ashworth. he follows a lot of research. october-are we -- october-y are we? gocus: not much worse could in the world, with iran, the trade talks looking terrible, the bad news forecast on europe, brexit, and some missiles being lobbed in south korea. it is not a lot of good in the markets. the turkish central bank suspends the one week repo auctions, which is disastrous. turkey is heading into another test.

tom: turkish lira, 6.23. it was weak and now it is ever weaker. smarts the positioning of guys? everyone knows it is not long, short. algorithms,ack box, people moving the markets. what is their position now and what would you expect today and tomorrow? marcus: i do not think anyone would be ashamed of sitting on the sidelines. unless you have a conviction trade, the dollar will do well. haven. is a classic safe we are seeing that trend. it is out of emerging markets, short-term certainly, and retreating to something as safe as you can. the equities still remain only long-term conviction trade

which makes sense. francine: what is your take on treasuries? marcus: treasuries had a bit of a wobble last night after a 10 year auction. a little bit of a fear with china talks not going well, maybe china would not turn up. they probably did. if you look at the direct net buyers, that is perhaps where you would see china have some influence, it was average. the potential of them not turning up caused a wobble and an unpleasant auction. tom: greatly appreciated, mr. ashworth writing for bloomberg opinion. now your first word news. kailey: we are getting more details on the north korean weapons test, the second in less than a week. the north appears to have fired two short range missiles

launched from a missile base 130 miles north of the border with south korea. one of the projectiles was believed to have a short range ballistic missile. president trump turned up the rhetoric before trade talks continue with china, accusing chinese leaders of breaking the agreement they negotiated, but says things will work out. he is threatening to raise 200 billion dollars of tariffs on chinese goods tomorrow. dumping chinese stocks before tariffs are imposed. that is the most delinquent since the shenzhen exchange opened. jerrold nadler warns the u.s. is in a constitutional crisis. his panel voted to hold william barr in contempt of congress for

not turning over robert mueller's unredacted report, after president trump exerted executive privilege. the full house will take up the contempt resolution. 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 kailey leinz. this is bloomberg. tom: peter hooper with us from deutsche bank, and we are thrilled he is with us, all the news flow. we will carve out the time for an important book, "learning to with carl weber, ron williams. you know him from aetna, health care and government -- governance leadership. you can think of the jim croce song, south of chicago. ron williams joins us today. there is that tip point where

things get better. you are striving on the south side of chicago. what was the tip point to advance in the business and education world? ron: for me, a starting point was recognizing i had to refrain who i was and what i -- reframe who i was and what i could do. you have to reject the stereotypes people have of limitations of your potential. , i will be 15% better . you cannot do that into perpetuity, but for me, that was a starting point. tom: providing leadership and saying we have x number of staff that are underpaid, on benefited. we will give them a jump. why don't we see more of that in america? above theget them

minimum wage debate? ron: it is all about leadership, and i have to commend my successor. tom: you set the foundation. ron: i always like to give proper attribute. to recognize they have stakeholders and not just shareholders, and employees are one of the most important constituencies. when you invest in employees, they engage in investing in the business. around are all running certain that we have an eco-thing going. how does collecting the facts buttress up against a believed eco-of management? ron: you have to start with the fact that people believe what they believe because it makes sense to them. what you have to do is not interrogate them, but have a

conversation and ask them to make accessible what they believe and share their point of view. you often find there is more commonality and some common ground -- he will not always agree on everything -- but you can disagree and not be disagreeable. that provides a foundation for finding solutions that work. francine: has the way people speak to each other in politics and business changed in the last 10 years? has diplomacy changed? ron: i think the world has changed, and i would say the most important thing is i start out trying to assume positive intent, in terms of what people are saying and doing. ,hen someone is repetitively makes it difficult to assume positive intent, then i go into how do you manage difficulty. the world has changed.

people have a difficult time listening to each other, and assuming positive intent says the other person is not evil, they have a different point of view and you may not agree, but it is a much more civil dialogue. francine: how is america changing, economically, or in what the citizens want and believe in? ron: there is a lot of debate about income inequality, the differences between the coast of the country and the heart of the country in terms of experiences people have. one thing we have to do is bring people back together. health care is a great area to focus on. armstrong, he is always talking about health care. this is cvs. what a glorious stock for so many years, and off a cliff as

everybody is trying to merge this, merge that. is this going to work out, this oneness of health care? no one believes in this except health care management. ron: health care is a system that controls lots of individual components. all of these mergers are about new models being explored to try to look at the health system does health care system from and to end. companiesa lot of the , the strategy is right, but it is all in the execution. francine: what do you think cvs should do now that they own and ensure? know ae people at cvs lot more about their circumstances than i do, but you never go wrong in health care trying to make it more affordable, create more value, and focus on putting position --

physicians back in the center of health care, making sure they are giving their patients preventive care for issues before they become serious. book on ailliams, a certitude and trying to get something done. we will come back with peter hooper of deutsche bank, and also bring your attention, another chief executive officer, union pacific at 8:00. this is bloomberg. ♪

♪ romania,he heart of away from the black sea, european leaders meeting.

it is a gorgeous city, one of the truly magnificent cities. it looks like the set of "frozen." macron, andmr. other e.u. leaders with the romanians hosting with a photo opportunity. we have a photo opportunity today with peter hooper. he cannot comment on deutsche bank matters. the single best chart, the two-year in the 10 year yield of germany. and i want to know is the portability of negative yields, the 10 year space, the two year yield roles over a little bit, how do negative yields transfer to chairman powell and the u.s. financial system? peter: we are wrestling with this, and one of the big uncertainties about why the fed

has not gone down that road, they want to know how it is working abroad. we put out a research piece this year, how to save the european banking system, and one of the drags is the fact that about eight billion euros is being paid to the ecb on those ,eserves that are being held those government securities being held at negative interest rates. it is a drag on the economy from that channel. overall, other pluses, our sense is this is not the way the fed will go. tom: this is important, the median and the mode. not only can you have negative interest rates, but there is the amplitude or depth of belief and policy. some are saying we need to do -- to be braver. do you believe it is ok to be braver with negative interest

rates, or is it an experiment that is still unknown? peter: i think it is an experiment and in an economy that is more bank dependent like europe, they are feeling the pain because of the pressure on the banking system. if there were ample demand out extra creation of reserves and paying negative interest rates got the banks to push the fans out through the economy -- funds out through the economy, that would be good, but the demand is not sufficient to get it going. marvin goodfriend, outstanding researcher, i beg to differ. the cost because of the impact on the banking system is considerable. francine: what is your biggest concern away from the banking sector in europe? what is your biggest concern for the european economy?

is it demographics or something else? is it the union? are we becoming more like japan? peter: there is the long-term issue, yes, demographics, yes, questions on productivity and the long jevity of the euro, et longa -- long jevity -- evity of the euro, et cetera. , around tradey and brexit, not just in the u.k. but in the rest of europe, these are uncertainties that are still pretty intense in the background , intensifying more recently. to showxpecting europe a pretty slow growth rate this year and gradually pick up on the assumption these uncertainties dissipate over time. that is the big issue.

francine: peter hooper stays with us. withg up, a conversation schoolschool of -- nyu's of engineering professor. we will talk about markets and black swans. this is bloomberg. ♪

francine: this as bloomberg "surveillance," tom and francine from london and new york. the ride-hailing giant uber said to price shares today after the listing. investors are hardly bothered by a high vix index and the tumbling shares of lyft. uber is offering 180 million of -- hubera market could end up with market value of $70 billion, compared -- uber could end up with market value of $70 billion, compared to

lyft. tom: let's listen to mr. eiseman in asia. valued and left are not -- lyft are not valued on traditional fundamentals so shorting them is like shorting a ghost. it is difficult to do. segram is with the stern school for business and bringing venue -- valuation. he actually reads red herrings. what is the distinction about uber? haran: i think this is a liquidity event for early investors. tom: what on god's name is that? haran: cashing out early. they are taking advantage of, this is a pricing game rather

than a valuation game for uber. you tell a compelling story and fetch the highest price possible. that is what is happening here. tom: do they play by a different rulebook than a specialty chemical company in iowa? haran: 100%. because this is a technology company, people find it difficult to value and it will be difficult to nail down a value, so they can price whatever they want to with this company. francine: how different is this from amazon 10 years ago? could amazon have made money at the time if they wanted to? steve: amazon goes through something known as investing cycle and harvesting cycle. when they go through and investing cycle, they do not make money, a harvesting cycle they make money. i do not think it is prudent to

compare this to amazon or facebook. amazon started with a retailing business, not a cloud. they were very patient with the retail business until they diversified. uber is trying to do too many things at the same time. , do not them to end up like ge pricing high and selling low. if this is going to an overseas market, they can influence. loss, not at at a prophet, that is my biggest concern with uber. francine: when do we know when this great experiment will work? haran: i have a runway of four to five years before the company breaks even. pastor -- uber's

pathtability as longer -- to profitability is longer than lyft. they will hold back profitability in the short to medium-term. played andy pure focused on what they are doing. i feel that lyft will turn profit before uber. out the freering cash flow for home depot a million years ago, 1990 six, free cash flow negative, negative, negative. langone in 2002, ken gets the cash flow. how can you do that in an industry that is a duopoly with no profit proof ever? nown: they are right focusing on the top line.

if topline growth is the primary focus, once they settle on the top line growth they will turn to profitability, but it has to be an agreement between lyft and uber. if they go against each other all the time, they will never be profitable. twomight compare them to airlines like american airlines and british airlines -- airways. they have an agreement that one dominates a certain market. they will have to be placated to be profitable. tom: we will do this on bloomberg radio in a bit. stay with us, a huge news flow. this is bloomberg. ♪

♪ pres. trump: by the way, you see

the tariffs were doing? because they broke the deal. alix: president trump says china will pay as the clock ticks towards higher tariffs. investors move into safe havens. equities sink. the market tries to define a trade deal that may never happen. shunning the 10 year, the worst demand for a 10 year auction in a decade. have investors reached a breaking point? david: welcome to "bloomberg daybreak." part of the news this morning, "the new york times" as an article from the cofounder of facebook that says it is time for the market to start regulating. alix: it was a really wonderful read. facebook at harvard, so he knew -- so he's known mark zuckerberg for a